First Steps After Startup Registration in Singapore
This article is a complement to our guide on Singapore company registration. It serves as a checklist of tasks that you would normally complete in the first few weeks after incorporating your company and before commencing your business operations.
After incorporation, there are a number of tasks that a new company has to complete before it can start operating. Some of the tasks are related to regulations, such as buying a company seal, setting up statutory books, and registering for taxes and licenses. Other tasks relate to the nitty-gritty of commencing business operations, such as opening a bank account, setting up an office and sorting out insurance, etc.
Without guidance, these tasks may seem complicated or daunting to you as a new entrepreneur, particularly if you have had experience with incorporation in other countries. In Singapore, these tasks are very straightforward and can be accomplished easily. Even though you can complete these tasks on your own, given the somewhat legal nature of some of the tasks, it may be best to seek the help of the professional services firm that helped you incorporate your company.
These tasks are not listed in a strict chronological order although they can generally be performed sequentially.
1. Open Bank Account
Singapore is a thriving and leading financial centre of the world, serving both domestic and the wider Asia Pacific region. Singapore’s financial centre offers a broad range of financial services including banking, insurance, investment banking and treasury services. In order to conduct business in Singapore, you will most likely need to open a local bank account; you have several strong international banks to choose from.
In order to open a corporate bank account, a bank will typically require a certificate of incorporation, the company’s Constitution, a board resolution sanctioning the opening of the account and proof of identity from the beneficiaries. Most banks also require the physical presence of account signatories and majority of the directors when the company bank account is opened.
Once the bank account has been opened, each shareholder will need to deposit their corresponding investment share capital towards the initial capital of the firm.
2. Appoint Company Secretary
The Singapore Companies Act states that every Singapore company director must appoint a qualified company secretary within 6 months of its incorporation. A company secretary is a corporate officer primarily responsible for the administrative and reporting duties required by Singapore law. If the company only has one director, this person cannot also be the secretary. The secretary must be a natural person who lives in Singapore. He or she must be able to demonstrate the necessary expertise for the role by being a member of one of Singapore’s three public accounting bodies, or by having been a company secretary elsewhere for three of the last five years.
Since various legal formalities have to be completed soon after incorporation, it’s strongly advised to appoint a company secretary right from the beginning. In most cases, the corporate services firm that incorporated your company can appoint one of its employees to act as the company secretary for your company.
3. Buy Company Seal
All Singapore companies are legally obliged to purchase a seal for stamping official documents. Often known as a “common seal,” these seals are metallic, ink-free, and leave an embossed impression of the company’s name and registration number on official documents such as share certificates and loan documents. Companies must pass a board resolution before affixing a common seal, and the documents must usually be countersigned by any two directors or one director and the company secretary. The Seal should be kept under the control of the company secretary.
4. Issue Share Certificates
A Share Certificate is a legal document that certifies ownership of a specific number of shares in a corporation. It is mandatory for Singapore companies to issue share certificates to all of its shareholders. These certificates should be issued under the company seal and signed either by two directors, or by one director and the secretary.
Share certificates should be kept by individual shareholders and should be reissued when the shares are transferred, split, consolidated or otherwise reclassified.
5. Set up Statutory Books
Statutory books are the legal records of your company which are kept at its registered office in Singapore. Since they are a public document and can be requested at any time, they must be kept up-to-date and available for inspection. Statutory books contain:
Up-to-date information about corporate officers such as directors, auditors, and secretaries; the information should appointments and resignations.
A list of shareholders, how many shares they own and details of any share transfers.
Information about fixed or floating charges and debentures used to secure any borrowing by the company.
Resolutions and minutes from AGM meetings.
Your company secretary is responsible for creating and maintaining the statutory books for the company.
6 .Apply for Business Licenses, if applicable
In some industries of Singapore, you will be required to obtain a business license before commencing operations. Examples of such industries include retail, construction, hotels, restaurants, spas, medical clinics, employment agencies, travel agencies, financial services, event management, real estate, publishing, telecommunications and education.
Applying for a business license in Singapore is an efficient process. The procedures are devoid of any bureaucratic hurdles as long as you are able to meet the licensing requirements; in other words, no bribes or “connections” are required. Once again, your corporate services firm can help you obtain the necessary licenses.
7. Apply for GST, if applicable
The Singapore Goods and Services Tax (GST) is a Value Added Tax (VAT). A standard tax rate of 7% is levied on goods imported into Singapore and on the supply of goods and services within the country. Not all business are required to register for GST; you must register for GST if your business:
Has revenues of more than S$1 million in the last 12 months, or
Is projected to do so in the course of the next 12 months.
Smaller businesses that don’t meet the above threshold are not required to register for GST but can do so on voluntary basis.
8. Appoint Auditor, if applicable
Singapore companies are exempt from appointing an auditor if they satisfy two out of the following three conditions:
The total annual revenue of the company must not exceed S$ 10 million;
The total assets of the company for the financial year end must not exceed S$ 10 million;
The number of full-time employees at the end of the financial year must not exceed 50.
Most new startups meet all three of the above conditions and as a result, they are spared the burden and expenses of having to appoint an auditor. They do not have to perform an annual audit and save those fees too.
9. Set up Accounting System
It is important to keep accurate track of the income and expenses of your business from its very first day of operations. Not only will this help you track and manage the profitability of your business but the tax regulations in most countries mandate that you must maintain accurate records of these transactions. An accounting system software can manage this function for you. Implementation of an accounting system is a task that you should not delay. In fact, you should setup the accounting system for your firm before you transact any business. You should consult with your accounting executive on the selection of the accounting software since most of these systems require training and prior familiarity of your staff with a system can reduce the learning time significantly.
An alternative to setting up your own accounting system is to outsource this function to an external accounting firm. During the early stages of your business, your needs may be very limited such that you may not need full time staff for this function; in such a case, an outsourcing approach may be very cost-effective.
10. Obtain Business Insurance
You should obtain general liability insurance, workers compensation insurance, and any business specific insurance that may be applicable to you. A good insurance broker can be a great help during this process. Your insurance needs will expand as your business grows. Again, your corporate services provider can help you connect with a good insurance broker.
11. Hire Employees
As in other countries, employment is a regulated area in Singapore. You should familiarize yourself with the basic rules and regulations concerning HR matters in Singapore to make sure that you are in compliance with the applicable laws. Examples of such regulations include:
When hiring a foreign employee, you must apply and secure a valid work pass first.
For Singapore citizens and permanent resident, you must make necessary contributions to statutory funds such as Central Provident Fund, Skills Development Fund
It is a good idea to draw up a standard employment agreement that you can use to hire all your employees. A standard employment agreement provides several benefits:
You can ensure that your agreements follow the employment regulations of the country consistently.
You can ensure consistency in the employment terms of all employees thereby reducing the chances of mistakes due to non-standard one-off terms.
You can avoid discord and morale challenges among employee that may result from differing employment terms.
To learn more, consult the Employment Act.
Final Thoughts
It’s important that you take care of the post-registration tasks for your new company in a timely manner. Doing so keeps your Singapore company in good standing.
