Weigh up the pros and cons of a Singapore entity set up versus using a global PEO partner when expanding your business internationally.
To carry out business in Singapore you will need to register your company and set up a legal entity. This can be a daunting task not to mention incredibly time-consuming and costly. Using a PEO can be a cheaper, more effective way of expanding into Singapore as well as a method that ensures compliance. Here we look at who needs to set up an entity, how to set up a legal subsidiary and how a PEO can help you expand into Singapore without a legal entity.
Who needs to set up a Singapore entity?
While you can do business in Singapore without a legal entity this has its limitations. For one, you will be registered as a sole proprietor and your business activities will be taken to be that of a sole proprietorship. Therefore, to reap the full benefits of Singapore's economy and business market, it is best to register your company in Singapore. This will entitle you to more benefits such as credibility, legal protection and branding all of which you will need to grow a successful business in Singapore.
All businesses wishing to operate in Singapore must register with Accounting and Corporate Regulatory Authority (ACRA) regardless of whether they are a sole proprietor, private or public limited company.
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How do I set up a subsidiary in Singapore?
The answer to this will vary from business to business and depending on what type of entity you require. But as a general rule to set up a private limited company in Singapore you will need to have:
- At least one shareholder and no more than 50 shareholders
- An approved company name application
- At least one director who is a resident in Singapore
- A company secretary who is appointed within six months of incorporation. This person must reside in Singapore and cannot be the sole director.
- An auditor who is appointed within three months of incorporation.
- Submitted a company constitution to ACRA.
If you are a foreigner setting a up business in Singapore then you must still appoint a director who resides in Singapore. If you wish to set up the company and manage it from Singapore then you must seek approval from the Ministry of Manpower before you apply for a legal entity. Likewise, you must also employ a Registered Filing Agent to submit the online incorporation application on your behalf.
There is more information on setting up a local company on the Singapore government website.
Singapore entity laws
The Accounting and Corporate Regulatory Authority (ACRA) is the regulator of business entities, public accountants and corporate service providers in Singapore. Their aim is to ensure compliant business operations across Singapore and make the country a fair and prosperous place for businesses.
As well as initially registering with ACRA, businesses must submit annual returns, financial statements and the date of the company's annual general meeting (if applicable) as well as keeping all business up to date with ACRA. Failure to do so can result in enforcement action. This is outlined in great detail in the Companies Act and on ACRA's website.
The benefits of setting up an entity in Singapore
Singapore has one of the strongest economies in the world, extensive global connectivity, supportive business infrastructure and rapid economic growth. Setting up an entity in Singapore establishes your company as a credible, long-term business; this in turn can help with recruitment and client onboarding.
Meanwhile, with a registered legal entity your company can benefit from reduced liability, legal protection and lower corporate tax rates to name but a few perks.
Why use a PEO partner instead of setting up a legal entity?
As you can see setting up a legal entity in Singapore is a detailed process. With numerous documents to source and file at initial set up and in the years following your registration, setting up an entity is a costly, time-consuming and risk-laden process that can drain your company's resources. Meanwhile, failure to set up a subsidiary compliantly can hinder your company's start in Singapore and leave you with unpleasant legal disputes.
By outsourcing your Singapore business expansion to a PEO or EOR, you can start reaping the benefits of one of Asia's fastest growing markets without the burden of a legal entity. This provides more flexibility for your business as well as saving you much-needed time and resources. Likewise, opting for a PEO over a legal entity lets you focus on the key aspects of business growth knowing that the legalities of tax, national insurance, onboarding employees, work permits and employment contracts are handled compliantly.
At Leap29, our Singapore PEO team have in-depth knowledge of the Asian business market meaning that they can be fully relied upon to navigate your expansion in Singapore complying with ACRA and the Companies Act.
If you want to find out more about how our PEO Services in Singapore can support your global expansion, call our experts today on +65 3129 8575 or email [email protected].
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"For the last few years, we have worked very closely with Simon and the team at Leap29 on a number of different projects in multiple countries across the globe. Leap29 have been a fantastic partner for us and are always willing to think with us to find the best solution. The communication with the team at Leap29 has always been excellent and Simon, in particular, is great to work with! They come highly recommended from us!"
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