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Singapore Company Incorporation FAQs

Frequently Asked Questions about Singapore Company Formation

TOP FAQs

  • What are Private Companies?

    Maximum number of shareholders is limited to 50 and the memorandum and articles of association restricts the right of its members to transfer their shares in the company.

     

    A private company limited by shares can be classified as a exempt private company.

    The key characteristics of an exempt private company is:

    • No more than 20 shareholders; and
    • All the shareholders are individuals.
    • Exempt private companies with an annual revenue of less than S$5 Million are exempted from audit requirements and are not required to file financial statements with the ACRA.

    It is also exempted from prohibitions against loans to its directors or to companies related to its directors.

  • What is a company?

    A company is a business entity registered under the Companies Act, Chapter 50. Most companies in Singapore are private companies limited by shares and are recognized by the suffix “Pte Ltd”.

  • Does a Singapore subsidiary require a registered address in Singapore?

    Yes, all Singapore companies and subsidiaries need to have a registered address in Singapore.

  • What is the difference between a director and a shareholder?

    Shareholders
    own the company and are entitled to the profits of the company.

    Directors
    managing and overseeing the company operations, dealing with the everyday responsibilities.

  • Who is ordinarily resident in Singapore?

    A Singapore citizen, Singapore Permanent Resident or EP holder who is residing in Singapore.


Company Directors

We would like to incorporate a company in Singapore but we do not meet the local director requirements


There are several options you may consider.

 

  • If you plan to relocate to Singapore, you can act as the local director subject to approval of your Entrepreneur Pass or Employment Pass.
  • Alternatively, you can use nominee director service from a professional services company in order to satisfy the local director requirement.
  • You may also chose to appoint a local employee or someone you know in Singapore and who is willing to act as the local director.

Can a director also be the company secretary?


A director can also hold the position of company secretary only if company has more than two directors and the director is qualified to do so. 

Who is eligible to be a company director?


Qualifications of a Company Director
 

  1. A director must be a natural person. This means that a corporate entity/enterprise cannot act as a director of another company.
  2. A director must have legal capacity and attained the age of majority (at least 18 years old).
  3. A director must be of sound mind, mentally and physically fit to render statutory duties.
  4. A director must not be subject to disqualification. Among those considered unfit to become a company director under Section 148 of the Companies Act are as follows:
  • Those who are undischarged bankrupts or those who have been declared bankrupt by a local or foreign tribunal
  • Felons convicted of criminal offences like fraud or dishonesty
  • Those who are disqualified pursuant to court order
  • Those convicted for at least 3 years or more for an offence punishable under the Companies Act (like failure in filing returns, accounts or submitting other documents) within a period of 5 years

How many directors are required?


Every Singapore company must have at least one director who is ordinarily resident in Singapore.

Who is ordinarily resident in Singapore?


A Singapore citizen, Singapore Permanent Resident or EP holder who is residing in Singapore.

Is a resident director required for incorporation in Singapore?


Yes, each company must appoint at least one director who is ordinarily resident in Singapore.

Do I need to be living in Singapore to be a director?


No, however there needs to be at least one director who is ordinarily resident in Singapore.

Can another company be appointed as a director?


No. A director must be a natural person.

What are they typical terms for providing a nominee director service?


The responsibilities of a company director are rather onerous and therefore we usually require that certain conditions are met before we offer this service, such as:

  • Credibility of company beneficiaries
  • Sign a nominee director indemnity letter
  • Provide a refundable security deposit

Does a director have to be a shareholder and vice versa?


No, directors are not required to own shares in the company but they are permitted to. Similarly, a shareholder does not have to be a director but is permitted to be appointed as such.

What are the main responsibilities of a director?


Directors are responsible for the decision-making and running of the business and ensuring the company is in compliance with its statutory obligations.

Is a director an officer of the company?


Yes, the Companies Act classifies all appointed directors as officers of the company.

Can I remove a director from my company?


Yes. Directors may be removed in the manner as prescribed in the company’s articles of association.

Can I appoint a new director after the company has been incorporated?


Yes. Directors must be appointed in the manner as prescribed in the company’s articles of association.

How many directors does a subsidiary company require?


The company must have at least one director who must be ordinary resident in Singapore.

As a foreign company looking to register a subsidiary company in Singapore, what are our options if we do not have a local director?

There are several options you may consider:

  • If you plan to relocate one of your senior employees to Singapore, you can apply for an employment pass for this individual who can act as the local director once the EP is approved.
  • Alternatively, you can use our nominee director services.
  • You could appoint a local person you know or a local employee who is willing to act as the local director.
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