General
Generally, the standard incorporation process is immediate after our Know-Your-Client (KYC) process (unless approval from other government authorities is required). A hard copy of the Certificate of Incorporation is usually available within 7 working days after the incorporation date.
Name Check and Reservation of Name
A proposed name (and 2 alternatives) should be provided to us to conduct a check for the availability of a company name with the Registry. The name will be reserved for two months upon (usually same day) approval. Please note that the Registry rejects names that resemble names of existing companies, undesirable and/or politically sensitive names.
Principal Activities
Information on the principal activities must be provided to the Registry (i.e. management consultancy, investment holding company).
Capital
There is no authorized capital requirement for Singapore companies and the minimum issued share capital is S$1.00. The preferred currency for the capital – in USD or SGD – must be provided to the Registry.
There is no limit or restriction on the maximum amount of share capital for both types. Share capital can be expressed in any major currency and is not restricted to the Singapore Dollar alone. Shares can be freely transferred, subject to a stamp duty fee. Singapore company formation law does not permit bearer shares. The minimum issued capital is one share
Additional Information Needed
Typically, the Singapore resident director of VALON will act as first director and shareholder, and VALON will provide the resident company secretary to ensure a smooth and swift incorporation process.
Resident Director
A minimum of one director who must be a Singapore resident individual, typically a Singapore Citizen or a Singapore Permanent Resident. The names of the director(s) are on public record with the Company Registry.
VALON can provide this service.
Shareholder
Minimum of one, either an individual or a corporate shareholder. The names of the shareholder(s) are on public record with the Company Registry. VALON can provide this service.
Resident Company Secretary
Minimum of one company secretary who must be a Singapore resident individual, typically a Singapore citizen or a Singapore Permanent Resident. A sole director may not be the secretary of the company. This must be a natural person, a service which can be provided by VALON. The names of the secretary(s) are on public record with the Company Registry.
Registered Office
The company must have a registered office in Singapore. The registered address must be a physical address and cannot be a PO Box.
Overview of Audit Exemption
The following companies are exempted from audit:
- EPC with revenue not more than S$5 million for a financial year starting before 1 Jul 2015; or
- EPC with revenue not more than S$2.5 million for a financial year starting on or after 15 May 2003 but before 1 Jul 2015; or
- Companies that meet the “small company” criteria for a financial year starting on or after 1 Jul 2015; For a company which is part of a group: • company must qualify as a small company; and
• entire group must be a “small group”.
• Any company, including an EPC, that is dormant for the financial year starting on or after 15 May 2003
The audit exemption with respect to financial statements for a financial year commencing on or after 1 July 2015.
For a company which is part of a group:
(a) the company must qualify as a small company; and
(b) entire group must be a “small group”
to qualify for the audit exemption.
Please refer to the table below to find out if a company or a group is a small company or a small group:
| Criteria for Qualifying | Disqualification | |
| Small Company | • Private company
• Meet at least 2 of 3 quantitative criteria for immediate past two financial years: total annual revenue ≤ $10m total assets ≤ $10m no. of employees ≤ 50 |
“Small company” status will continue once obtained until disqualified i.e.:
ceases to be a private company at any time during the financial year; or does not meet at least 2 of the 3 quantitative criteria for the immediate past two consecutive financial years. |
| Small Group | • Meet at least 2 of 3 quantitative criteria for immediate past two financial years:
Consolidated group revenue ≤ $10m Consolidated total assets ≤ $10m Aggregate no. of employees ≤ 50 |
“Small group” status will continue once obtained until it does not meet at least 2 of the 3 quantitative criteria for the immediate past two consecutive financial years. |
A new company incorporated on or after 1 Jul 2015 can qualify as a “small company” if it is a private company and meets the quantitative criteria in its first or second FY after incorporation.
The illustration for this scenario is similar to that for the transitional provisions for existing companies above.
To determine if a company qualifies as a small company in its first 2 financial years after its incorporation, the company must assess if it fulfils the requirements in each of the years. E.g. if a company is incorporated after Jul 2015, in order to determine whether a company would qualify in its first financial year, the company should look at whether it is a private company and whether it meets the 2 out of 3 quantitative criteria in than year. If it does not qualify in that year, it will still get a chance to qualify in its second financial year, if it is a private company and meets the 2 out of 3 quantitative criteria in its second financial year.
More information can be found on: https://www.acra.gov.sg/components/wireframes/legislationDetails.aspx?pageid=2818
The small company audit exemption only applies to Singapore incorporated companies. However, for the purposes of determining whether the group to which a company belongs is a small group, all entities within that group are taken into account, including foreign entities, in determining whether the consolidated total revenue and consolidated total assets of the group meet the thresholds.
Even where the holding company is a foreign company, a Singapore subsidiary will need to determine whether the group to which it belongs qualifies as a small group, to determine if it can qualify for the small company audit exemption. Where the holding company has prepared consolidated financial statements, the “consolidated total assets” and “consolidated revenue” of the group shall be determined in accordance with the accounting standards applicable to the group. Where the holding company does not prepare consolidated financial statements, the consolidated total assets should be determined by the aggregation of the total assets of all the members of the group, and the consolidated revenue should be determined by the aggregated revenue of all the members of the group.
The obligations for filing financial statements are determined by whether the company is a solvent exempt private company.
Requirement to hold AGM and file annual return
All locally-incorporated companies are required to hold their Annual General Meeting (AGM) and file their Annual Returns under S175, S197 and S201 of the Companies Act. At the AGM, directors shall present a true and fair view of the company’s accounts to their shareholders.
| Requirements | Companies Act | |
| Annual General Meeting (AGM) | A company is required to hold its first AGM within 18 months after its incorporation.
Subsequent AGMs must be held every calendar year and the interval between AGMs should not be more than 15 months. |
Section 175 |
| Filing Annual Return | The Annual Return must be filed with the Registrar within 30 days after the AGM. | Section 197 |
| Audited / Unaudited Accounts | For a public company listed or quoted on a securities exchange in Singapore:
Accounts presented at the AGM shall be made up to a date not more than 4 months before the AGM. In the case of any other company: Accounts presented at the AGM shall be made up to a date not more than 6 months before the AGM |
Section 201 |
Annual Return must be filed with the Registrar within one month from the AGM date.
The Registrar may require the company to submit audited accounts and the auditor’s report, to the Authority, if:
- he believes that there has been a breach of section 199 (relating to accounting records and system of control) and section 201 (relating to the accounts) of the Companies Act; or
- it is otherwise in the public interest to do so.
Dispensation of AGM
Under section 175(A) of the Companies Act, if your company is a private limited company, the company can choose not to hold AGMs if all the shareholders and members passed a resolution. Once such a decision has been made, all matters which are to be dealt with at the AGM can be settled through the passing of written resolutions. The resolutions can be circulated by paper-form or through other legible form agreed upon by the company and the shareholders such as e-mails. However, a company that has dispensed with the holding of its AGM will still have to attend to matters that are dealt with at AGMS, such as preparing the company’s financial statements at the end of each financial year end, sending the financial statements and other documents (such as the Directors’ Report and Statement) to the shareholders, circulating the AGM-related resolutions which shareholders have to pass by written means.
During Annual General Meeting
A minimum number of people must be present at the meeting for it to form a quorum and be considered legally valid. Your company’s Articles may specify the quorum. If the quorum is not stated, any 2 members (holding not less than 10% of the total number of issued shares) or proxies present at the meeting would be sufficient to form the quorum.
AGMs are conducted under the direction of the chairman of the meeting, who is usually the chairman of the board of directors. The chairman regulates the conduct of the meeting to ensure that it is properly run.
Requirements for companies to file accounts with ARs
| Filing Requirements | Definition | Solvent (The company is able to meet its debts when they fall due) |
Insolvent (The company is not able to meet its debts when they fall due) |
| Small EPC | EPC with annual revenue up to S$5 million or less for financial years with effect from 1 June 2004 (S$2.5 million or less for financial years between 15 May 2003 and before 1 June 2004) | • need not audit accounts
• need not attach accounts; to complete an online declaration of solvency instead |
• need not audit accounts
• must file accounts |
| Normal EPC | EPC with annual revenue more than S$5 million for financial years with effect from 1 June 2004 (or more than S$2.5 million for financial years with effect from 15 May 2003 but before 1 June 2004) | • must audit accounts
• need not attach accounts; to complete an online declaration of solvency instead |
• must audit accounts
• must file accounts |
| Dormant EPC | EPC that do not have any accounting transactions* (no business activities) for the financial year concerned or have not commenced business since incorporation.
* Please refer to sections 205B(3) and 199(1) of the Companies Act for more information. |
• need not audit accounts
• need not attach accounts; to complete an online declaration of solvency instead |
• need not audit accounts
• must file accounts |
| Private Company (Non EPC) | A company limited by shares with at most 50 shareholders | Active
must audit accounts must file accounts Dormant * need not audit accounts must file accounts * Please refer to sections 205B(1), (3) and 199(1) of the Companies Act for more information. |
Same as for solvent. |
| Public Company | A company limited by shares where the number of shareholders can be more than 50
A company limited by guarantee Listed company on SGX |
Active
must audit accounts must file accounts Dormant * need not audit accounts must file accounts * Please refer to sections 205B(1), (3) and 199(1) of the Companies Act for more information. |
Same as for solvent. |
Bank Account Opening
In general, the following are the standard due diligence documents for new account opening in Singapore:
- Notarised corporate documents of the company
- Notarised due diligence documents of Directors, shareholders, ultimate beneficial owner and
- cheque signatories
- Notarised Passport copies (with signature pages)
- Notarised Residency/Address proof (not more than 3 months old)
- Information on Source of funds & estimated turnover
- Board Resolution for account opening
- Specimen signature for all authorized signatories – to be signed before the bank officer
- Bank reference letter and / or professional reference letter for the ultimate beneficial owners/ directors/ shareholders/ authorized signatories.
Some banks will require face to face interview with the authorized signatories & ultimate beneficial owner.
VALON can be your resource and business partner in Asia. Should you wish to receive more detailed information on VALON, please do not hesitate to contact us at enquiry@valoncorp.com.
Disclaimer: This publication does not provide financial, legal or tax or advice of any kind, and VALON cannot guarantee that the information is accurate, complete or up-to-date. While we intend to make every attempt to keep the information in this publication current, VALON make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained herein. Nothing on this publication should be used as a substitute for the advice of a third party. VALON assumes no responsibility to any person who relies on information contained herein and disclaim all liability in respect to such information. You should not act upon information in this publication without seeking professional advice.