Incorporation of a Singapore Pte Ltd company

It is very common for aspiring business owners to incorporate a Pte Ltd company for their maiden foray into the business world. Unfortunately, we have seen many cases of people who set up Pte Ltd companies without really understanding how they would actually benefit from using a Pte Ltd company. Therefore, it is certainly worthwhile to step back to consider whether is this the right and only business vehicle for you.


Apart from the limited liability that it offers to its shareholders, a Singapore Pte Ltd company is beneficial in terms of enhanced tax exemption on the first $100,000 of chargeable income for the first three years after incorporation.


There are certain industries in Singapore and elsewhere that may require only a Pte Ltd company to be able to conduct business. Furthermore, a Pte Ltd entity is also easier to raise funds through bank borrowings, private investors, or government grants. Third parties also have more confidence in a business that operates as a Pte Ltd company and therefore operating as one might be beneficial simply for sales and marketing purposes.

However, on the other side of the coin, the important question that you may want to ask yourself is am I prepared to handle the compliance requirements that come with the benefit of a Pte Ltd company?


With the benefit of limited liability, the Companies Act requires a Pte Ltd company and its directors to be subjected to more regulation. A Pte Ltd company needs to prepare financial statements each year which are compliant with Singapore’s accounting standards. The financial statements are then used to prepare the AGM minutes and file the Annual Return with ACRA. The last annual filing obligation is to file the company’s income tax return to IRAS, which is due every mid-December. Heavy penalties and fines will be imposed by the authorities if a Pte Ltd company fails to submit these on time.


It is also important to know that the Pte Ltd company is a separate legal entity to the shareholders/ directors and that they can’t draw company funds for their personal use unless it is specifically classified as salaries, loans, or expense reimbursements. All this need to be accounted for accordingly as this has legal and tax implications. It is also essential to make sure all record-keeping is in good order for accounting, secretarial and tax purposes.


Our accounting firm is registered professional filers with ACRA and we help clients to incorporate their new company. Drop us an email today if you require our assistance in incorporating your new company.


To get a free consultation for company incorporation services in Singapore, contact us now!

Share:

More Posts

ACRA Cancels Registration of Filing Agent and Qualified Individual for AML/CFT Breaches

The Accounting and Corporate Regulatory Authority (ACRA) had cancelled the registrations of filing agent (RFA) and qualified individual (RQI) on 18 January 2024. The registrations were cancelled in view of breaches of anti-money laundering and countering the financing of terrorism (AML/CFT) controls under the ACRA (Filing Agents and Qualified Individuals) Regulations 2015 (the “ACRA Regulations”).

Some of the basic AMT/CFT controls that a RFA and RQI are required to exercise are as follows:

(a) perform additional customer due diligence measures when a customer is not physically present during onboarding;

(b) inquiring if there exists any beneficial owner in relation to some of its customers; and

(c) perform risk assessments i

RQIs and RFAs provide corporate secretarial services for business entities, such as helping customers to incorporate companies, file annual returns and fulfil other filing requirements under the Companies Act 1967 or other Acts under ACRA’s purview. RQIs and RFAs are required to perform customer due diligence measures in accordance with the ACRA Regulations, and conduct their business in such a manner as to guard against the facilitation of money laundering and the financing of terrorism. RQIs and RFAs must also satisfy statutory requirements such as being fit and proper persons, to be registered or continue to be registered.

RQIs and RFAs who breach their statutory obligations may be subject to enforcement actions, such as financial penalties of up to $10,000 or $25,000 per breach respectively or have their registrations with ACRA suspended or cancelled.

Therefore, RQIs and RFAs play an important role in helping to detect and combat illicit activities.

Get in Touch​