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Subsidiary Vs Branch Office Vs Representative Office

Singapore RiverSingapore is strategically located between the East and West, providing convenient access to fast-growing markets such as China, India and Southeast Asia. Its strategic location is one of the major advantage of relocating business to Singapore. More than 7,000 multinational corporations (MNCs) have set up here, with more than half of them using Singapore as their regional headquarters. Companies hoping to grow their business will find Singapore as the ideal location to achieve this.

Foreign companies keen on establishing a presence in Singapore may choose to set up a subsidiary company, branch office or a representative office in Singapore. The best option will depend on the company’s business plan and strategic goals. As such, the following guide aims to explain the different setup options for foreign companies and how each option will best suit certain needs.

Subsidiary Company

A subsidiary company is a locally incorporated private limited company and its shareholding may be owned 100% by a foreign company or individual. A subsidiary company is treated as a local resident company and is eligible for tax exemptions and incentives that are available to local companies. In addition, a subsidiary company is considered as a separate entity from the foreign company. As such the parent company’s liability is limited to the share capital invested in the subsidiary company and its own assets cannot be held liable for the debts and liabilities of the subsidiary company. It is also easier to raise funds locally or obtain government incentives.

Due to the above mentioned benefits, registration of a subsidiary company is often preferred by small to mid-size foreign businesses who are keen on setting up an office in Singapore.

The name for the subsidiary office can be different from the parent company and is subjected to approval by the Account and Corporate Regulatory Authority (ACRA). Singapore Companies Act requires the appointment of one or more directors, and one of the directors must be a Singapore resident (citizen, permanent resident or employment pass holder). A subsidiary company also needs to have a registered office address in Singapore and ensure all statutory documents are kept in that office.

Branch Office

A Singapore branch office is a registered legal entity but it is considered an extension of the foreign company. As it is not a separate legal entity from its parent company, its debts and liabilities will have to be borne by the head office of the foreign company. A branch office is generally considered as a non-resident company for tax purposes, as a result it is not eligible for tax exemptions and incentives which may otherwise be available to tax-resident local companies.

Due to its non-resident status for tax purposes, this option is less attractive for small to mid-size foreign businesses. Generally setting up a branch office is for foreign companies which do not want to incorporate a company in Singapore, but would like to register an entity in order to carry out business activities in Singapore legally and under the corporate title of the foreign company.

The name of the Singapore branch office must be the same as that of the parent company and must be approved first before branch office registration. The company registrar generally approves the proposed name unless it is identical to an existing company name or is offensive in nature. Singapore Companies Act requires the appointment of at least 1 authorised representative who is ordinarily a Singapore resident. A branch office also needs to have a registered office address in Singapore

Representative Office

Setting up a representative office is for foreign companies who are interested in conducting market research or administering company affairs without conducting any profit-generating business activities. A representative office is a short-term setup without any legal status and cannot engage in any direct trading or on behalf of the foreign company. As it is not generating revenue, it is not required to submit tax returns in Singapore. It is also not a separate legal entity from its parent company, thus the foreign company will bear all the liability for its activities.

The cost for registering a representative office is considerably lower, making it an ideal avenue for foreign companies to explore potential opportunities in Singapore and the region before making commitments. However, a representative office cannot operate beyond three years. It will have to be converted to a branch office or subsidiary before or at the end of the three years.

Similar to branch office, the name of the Singapore representative office must be the same as that of the parent company. The authorities will decide on a case by case basis for situations where the name is identical to an existing company name. The representative office is required to be staffed by a representative from the foreign company’s head office and may engage up to five employees.

Below is a table summarizing the differences between the three entity types:

Singapore Subsidiary

Singapore Branch

Singapore Representative Office

Entity Name

Need not be the same with that of its parent company but should not be identical or similar to any registered company or business in Singapore.

Need to be the same as that of its parent company.

The name of the RO must correspond to that of its parent entity. IE Singapore must be notified within one month of any change in its name and accompanied by a copy of the parent entity’s certificate of change in name (in English or official English translation). The RO must clearly state that it is a “Representative Office Registered in Singapore” on its name plaque, letterheads, name cards of its staff and other communication materials.

Legal Status

Separate legal entity distinct from its members (parent company) and directors.

Not a separate legal entity but an extension of the parent company registered outside of Singapore.

Has no legal status but just a temporary facility with no statutory obligations to file financial accounts and tax returns with the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).

Liabilities

Parent company not liable for debts and losses of Singapore subsidiary.

Debts and losses of Singapore branch are extended to parent company.

Liabilities extend to parent company.

Business Activities

No restrictions on the type of business activities that a company can engage in.

Must be the same as the parent company.

Can only engage in market research and feasibility studies and should not provide services nor render any direct or indirect revenue generation activities on behalf of its parent company.

Continuity in Law

Perpetual succession until wound up or struck off.

Perpetual existence until deregistered.

Can only operate in Singapore for a maximum of three years from the date of its inception. During this period, the Representative Office must also be renewed annually.

Estimated Registration Time

1 day
It may take between 14 days to 2 months if the application needs to be referred to another agency for approval or review. For example, if the intention of the company is to carry out activities involving the setting up of a private school, the application will be referred to the Ministry of Education.

1 day
It may take between 14 days to 2 months if the application needs to be referred to another agency for approval or review. For example, if the intention of the branch of a foreign company is to carry out activities involving the setting up of a private school, the application will be referred to the Ministry of Education.

3-5 days

Taxes

When the control and management of the company is exercised in Singapore, it is taxed as Singapore resident entity, tax exemptions and incentives available.

Taxed as non-resident entity, tax exemptions and incentives applicable to Singapore resident entity are not available.

Not applicable as Rep Office cannot render any direct or indirect revenue generation activities on behalf of its parent company.

Annual Filing Requirements

Annual return must be filed together with Singapore subsidiary’s annual financial statements.

Singapore branch shall, within 2 months of its annual general meeting, lodge the followings with the Registrar:-
1. A copy of the financial statements the foreign company for the financial year concerned
2. Documents accompanying the financial accounts filed overseas in the foreign company’s jurisdiction
3. A copy of the audited financial accounts of the Singapore branch office

Not applicable

Bank Account in Singapore

No restrictions to open bank account in Singapore.

No restrictions to open bank account in Singapore.

Can open bank account in Singapore to run the cost centre operations which is funded by the parent company.

Hiring of staff

No restrictions on hiring local or foreign staff. Hiring of foreign staff is subject to foreign worker quota based on business sector and the company’s workforce.

No restrictions on hiring local or foreign staff. Hiring of foreign staff is subject to foreign worker quota based on business sector and the branch’s workforce.

Chief representative must be a staff member from the parent company. Number of staff for RO should be less than 5 people.

Set Up Fee

S$315 (S$15 name application fee and S$300 incorporation fee)

S$315 (S$15 name application fee and S$300 registration fee)

A processing fee of S$200 per year is applicable. The processing fee is non-refundable for unsuccessful or withdrawn applications.

Appointment of Officers

Must appoint at least one director ordinarily resident in Singapore, at least 18 years old.

Must appoint at least 1 authorised representative who is ordinarily resident in Singapore. There is no restriction on the number of directors a foreign company can have.

Must appoint a Chief Representative who relocates from head office.

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Annual Return & XBRL

What is XBRL?

XBRL

XBRL

 XBRL stands for eXtensible Business Reporting Language. It is an internationally recognised language used in computers for business reporting and electronic communication of business information between organisations.

With effect from 1 November 2007, Accounting & Corporate Regulatory Authority (ACRA) requires Singapore incorporated companies to file their financial statements in XBRL format. The use of XBRL will create a pro-enterprise financial reporting environment for businesses in Singapore, allowing financial information to be easily accessible and exchanged. It also enhances the accountability of businesses with increased transparency of business information.

In June 2013, ACRA announced the revision of filing requirements for Singapore incorporated companies. With effect from 3 March 2014, the revised XBRL filing requirements under the BizFinx system will apply. Filing of Option B (Partial XBRL) under the previous XBRL system (FS Manager) will no longer be available. Singapore incorporated companies (unless exempted), which are either unlimited or limited by shares and required to file their financial statements with ACRA, will need to file a full set of financial statements in XBRL.

Who needs to file XBRL?

All Singapore incorporated companies (unlimited or limited by shares), unless exempted to file financial statements with ACRA, will be required to file a full set of financial statements in XBRL format. The filing must comply with the minimum requirements reflected within the ACRA Taxonomy 2013.

However, the full XBRL filing requirement will not apply to:

  1. Banks, licensed insurance companies and finance companies regulated by the Monetary Authority of Singapore;
  2. Companies that are allowed by law to prepare accounts in accordance with accounting standards other than the Singapore Financial Reporting Standards (SFRS), SFRS for Small Entities and the International Financial Reporting Standards (IFRS);
  3. Companies limited by guarantee; and
  4. Foreign companies and their local branches.

Companies, excluded from the full XBRL filing requirement, shall continue to file by providing PDF copy of financial statements. Besides providing financial statements in PDF, companies under categories 1 and 2 would have to produce Financial Statements Highlights in XBRL format as well.

Insolvent exempt private companies (EPCs) have the following filing options:

  • A full set of financial statements in XBRL format; or
  • A full set of financial statements in PDF with Financial Statements Highlights in XBRL format.

On the other hand, solvent EPCs will remain exempted from filing their financial statements with ACRA.

What is the applicable financial period?

Your company will need to file its financial statement in XBRL format if you are filing:

  • financial statements for periods ending on or after 30 April 2007;and
  • Annual Returns on or after 1 November 2007.

How to file/upload XBRL file?

  1. Download BizFinx preparation tool for preparation of the XBRL report. Preparers will need to do mapping by matching data within the financial statements to an appropriate and compatible concept within the Taxonomy.(BizFinx preparation tool is an offline software application provided free of charge by ACRA to help companies to prepare and manage their financial statements in XBRL format in accordance with the revised XBRL filing requirements and new ACRA Taxonomy. It replaces the FS manager which was phased out with effect from 1 March 2014.)
  1. Once XBRL report is prepared, log in to BizFinx portal to validate and upload XBRL reports.

Alternatively, you may choose to save the hassle by engaging a professional service provider to assist you in the process.

Why should I outsource the work of XBRL to a professional service provider?

Directors of companies are liable for the correct representation and accuracy of financial statements filed with ACRA. Thus, directors are advised to check the information to be filed before authorising their staff to submit the information to ACRA. Filing of XBRL can be tedious and time-consuming. By outsouring the preparation of financial statements to a professional service provider, such as Enston, companies can save a lot of time and dedicate more time to their core business. Directors can also be assured that financial statements are prepared in compliance with the revised XBRL filing requirements and ACRA Taxonomy 2013.

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Making Representation to ACRA

Logo of Accounting and Corporate Regulatory Authority (ACRA)

Accounting and Corporate Regulatory Authority (ACRA)

As  many of you are aware of, Singapore incorporated companies are subject to staying compliant with Accounting and Corporate Regulatory Authority (“ACRA”). If you are unable to hold your Annual General Meeting or lodge Annual Return on time, penalties will be imposed in accordance to the Companies Act.

For one reason or another, if you miss the filing deadline for Annual Return, you have to submit the Annual Return and pay annual return filing fee and the penalties imposed according to the Companies Act. Many of you wonder, in such situations, how to make appeal to ACRA to waive late filing penalties or composite fines. If you are interested in writing to ACRA for the waiver of fines or penalites, here is a brief guide on how you can do so.

AGM and AR beaches
A person who wishes to make representations to ACRA to review the summons issued against him (for example, to reduce the number of charges) or to reduce the composition sum or late filing penalty (for late filing of AR) would have to download a “Representation Form” from this link and provide the basis for his representations. Supporting documents (if any) must be attached. The completed Representation Form must be sent to ACRA (Attention: Compliance Department) by:

  • Fax to ACRA at: 6225 1676
  • Email to ACRA at: acra_cd@acra.gov.sg
  • Posting or delivering to ACRA at: 10 Anson Road, #05-01, International Plaza, Singapore 079903

Other breaches
A person who wishes to make representations to ACRA to review the summons issued against him (for offences other than those cited in paragraph 42) or to reduce the composition sum would also have to download a “Representation Form” from this link and provide the basis for his representations. Supporting documents (if any) must be attached. The completed Representation Form must be sent to ACRA (Attention: Investigation Department) by:

  • Fax to ACRA at: 6225 1676
  • Email to ACRA at: acra_id@acra.gov.sg
  • Posting or delivering to ACRA at: 10 Anson Road, #05-01, International Plaza, Singapore 079903

ACRA will require time to consider each representation and we may take up to 8 weeks to do so. At times, ACRA may request for additional information or supporting documents to support a claim made in the representation.

Please note that representations are rarely acceded to after consideration.

For further information, please refer to ACRA website here.

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Setting up an Employment Agency

Setting up an Employment Agency

Setting up an Employment Agency

An employment agency needs to have a licence to operate in Singapore. Below you will find the key steps to setting up an employment agency in Singapore. Before we delve into more details, let us first discuss who needs to get an employment agency licence. According to Ministry of Manpower (MOM), organisations and individuals who place job seekers with employers must get an employment agency licence to operate in Singapore, unless otherwise stated. An employment agency licence is needed if organisations or individuals does any of the following:

  • Communicates with any jobseeker for the purpose of processing any employment-related application by that jobseeker.
  • Collates the biodata or resume of any jobseeker for the purpose of helping the jobseeker establish an employer-employee relationship.
  • Submits any work pass application on behalf of any employer or jobseeker.
  • Helps place any jobseeker with an employer.

The licence however is not required when recruiting persons for the sole purpose of employing them for own company or business and outsourcing the company’s own staff to customers’ premises or offices.

MOM website prescribes a comprehensive lists of activities where employment agency licence is not required. The following do not require an employment agency licence:

  • Wholly web-based job portals.
  • Organisations and individuals who maintain and operate any job bulletin board and who do not otherwise carry out any matching or placement.
  • Organisations who submit work pass applications and who do not otherwise carry out any matching or placement.
  • Recognised universities or educational institutions.
  • Community Development Councils.
  • Employment and Employability Institute Pte Ltd.
  • Singapore Workforce Development Agency

Next, let us further discuss on the key steps involved to set up an employment agency in Singapore.

1. Register the business
The first step is to register the business with one of the following principal activities as registerd with ACRA:
-Maid Agencies (SSIC 78103)
-Employment Agencies (excluding maid agencies) (SSIC 78104)
-Executive Search Agencies (SSIC 78105)

There are several different options to choose from when registering a business such as sole-proprietorship, partnership, private limited company, limited liability partnership or limited partnership. The choice will depend on personal circumstances. The popular option is to incorporate a priviate limited company.

2. Choose the right office space
While the traditional agency model of a high-street shop front is still a valid option, there are seveal options such as home office and co-sharing office unit, depending on the available budget . Kindly note that home office option is subject to a prior approval from HDB if the unit is a public housing address or the approval from URA for condominium unit. Pleaser refer here for more information on registered office address of a business in Singapore context.

3. Apply employment agency licence
The steps involved in this phase are to submit the application to MOM, to submit security bond and banker’s guarantee documents and finally to get the licence issued. Kindly note that all new employment agencies are required to furnish a security deposit ranging from $20,000 to $60,000. The employment agency which is under any of the Comprehensive Licences, key appointment holders and employment agency personnel must get the Certificate of Employment Intermediaries.

4.Register employment agency personnel
Employment agencies must register all their key appointment holders and other personnel. If employment agency is under a Comprehensive Licence (All), Comprehensive Licence (Local) or Comprehensive Licence (non-FDW), each candidate must also be certified to be registered. Those who are successfully registered will get a registration number and have their information uploaded to MOM’s EA directory.

5.FAQ
If you require any further information, please refer to MOM FAQ corner.

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Registered Office Address

Registered Office Address

Registered Office Address

It is the company’s responsibility to update the Accounting and Corporate Regulatory Authority of the changes in its registered particulars. The change of registered office address or office hours is commonly filed via ACRA’s BizFile+ portal. The company is required to notify ACRA within 14 days from the date of change. Below you will find answers to most frequently asked questions for registered office address in Singapore.

Can P.O. Box address be used as registered office address?
P.O. Box address cannot be used as a registered office address.

Can a HDB address be used as registered office address?
HDB address can be used as a Singapore company’s registered office address only with prior approval of HDB (Housing Development Board). The approval can be applied through HDB website under the Home Office Scheme. For more detailed info, please refer to the HDB page on Home Office here.

Can a condominium address be used as registered office address?
Under the Home Office (HO) scheme, home owners, tenants or occupiers of private residential properties can conduct small–scale businesses in their homes, as long as they satisfy the prevailing HO guidelines and performance criteria and ensure that the use does not cause amenity problems to the neighbours. The approval can be applied through URA (Urban Redevelopment Authority) website under the Home Office Scheme. If you are not the owner, you have to obtain written consent from the owner before you register for the Home Office use.

Can one address be used as registered office address for more than one company?
Yes.

Are there any other alternatives apart from the use of residential units as registered office address without incurring substantial rental expenses?
The next alternative to using home address as registered office address is to use virtual offices services offered by corporate service providers in Singapore which specialize in providing an office address at affordable cost. Virtual office service providers typically offer various packages, including but not limited to, the provision of an office address, mail forwarding, mail drop-off services, meeting room rental services, and serviced office space services.

What is needed to update ACRA with the change of registered office address?
A director resolution duly passed by the board of directors of the company.
Approval letter from relevant authority if the address is that of a residential unit.

How can I file the change of Registered Office address with ACRA?
Any Director or Company Secretary of the company can login into ACRA bizfile website using his SingPass and update the new address/office horus and effective date.

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Dormant Company Guide

What, How, Why, When, Who, Where?

What, How, Why, When, Who, Where?

This article is designed to be an easy-to-understand guide on compliance and regulatory matters surrounding Dormant Companies incorporated in Singapore.

In this context, let us first define what dormant company is under the definition given by Accounting and Corporate Regulatory Authority (ACRA). A company is considered dormant during a period in which no accounting transaction occurs.

Transactions that will not affect the dormant status of the company:

  • The appointment of a secretary of a company;
  • The appointment of an auditor;
  • The maintenance of a registered office;
  • The keeping of registers and books;
  • The payment of fees to the Registrar or an amount of any fine or default penalty paid to the Registrar (ACRA)
  • The taking of shares in the company by a subscriber to the memorandum in pursuance of an undertaking of his in the memorandum.

Are Dormant Companies required to file Annual Return?
Dormant companies are required to file Annual Return. However, they no longer need to attach the Statement by dormant companies exempting them from audit requirements (currently in PDF format). The appropriate online declarations will appear in the new Annual Return if the correct company type has been selected earlier.

Audit Exemption for Dormant Companies
The audit exemption applies to the financial accounts of a dormant company for any financial year beginning on or after 15 May 2003.

Audit exemption
Companies that are exempted from audit requirements are not required to have their accounts audited. Instead, they will prepare unaudited accounts for purposes of AGMs and filing with ACRA. If the company chooses to have the accounts audited, it will submit the audited accounts together with the auditor’s report.

Can ACRA require the accounts to be audited?
The Registrar may require the company to submit audited accounts and the auditor’s report, to the Authority, if

  • the Registrar believes that there has been a breach of the Companies Act; or
  • it is otherwise, in public interest, to do so.

Are Dormant Companies required to prepare financial statement?
The Companies (Amendment) Bill, which was passed by Parliament on 8 October 2014, contains amendments to the Company Act aimed at reducing regulatory burden on companies, providing for greater business flexibility and improving the corporate governance landscape in Singapore. The legislative change relating to new exemption of dormant companies from the preparation of financial statement take effect in the first quarter of 2016.

A dormant non-listed company (other than a subsidiary of a listed company) is exempt from requirement to prepare financial statements if the Company has been dormant from the time of formation or since the end of the previous, and it fulfills the substantial assets test. The substantial assets test is that the total assets of the company at any time within the financial year must not exceed $500,000. For a parent company, the consolidated total assets of group at any time within the financial year must not exceed $500,000.

Dormant listed companies and their subsidiaries, and dormant unlisted companies which do not fulfill the substantial asset test must prepare financial statements but are exempt from audit. There is no change for dormant listed companies and their subsidiaries. This new exemption aims to reduce regulatory costs for dormant companies which have lower public impact.

Is a Dormant Company required to file any documents to IRAS?
A dormant company must submit its Income Tax Return (Form C/Form C-S) unless it has been granted a waiver from IRAS. The company may apply for a waiver from IRAS by submitting the form ‘Application for a Waiver to Submit Income Tax Return (Form C) by a Dormant Company’.

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Singapore Branch Guide

What, How, Why, When, Who, Where?

What, How, Why, When, Who, Where?

The Companies Act requires a foreign company to appoint at least one local agent from Singapore to act on behalf of the company. The agent must be an “ordinarily resident” (the usual place of stay of a person) in Singapore. For ACRA’s purposes, if a person can provide a local residential address and prove that he is staying in Singapore on a long-term arrangement (i.e. legally remain in Singapore for a long period), ACRA may accept that he is ordinarily resident here.

Preparation of Financial Accounts

Financial accounts of the branch must be prepared in accordance with the Singapore Financial Report Standards to give a true and fair view of their Singapore operations and must consist of an audited statement of its assets and liabilities and its profit and loss accounts of its operations in Singapore.

Annual Filing Requirements of Branch office in Singapore

Subject to Section 373 of Companies Act, a foreign company which has a Singapore branch shall, within 2 months of its annual general meeting, lodge the followings with the Registrar:-
1. A copy of the financial statements the foreign company for the financial year concerned
2. Documents accompanying the financial accounts filed overseas in the foreign company’s jurisdiction
3. A copy of the audited financial accounts of the Singapore branch office

When the parent company is not required by the law of the place of its incorporation or origin to hold an AGM and prepare a balance sheet, the parent company shall prepare and lodge with the Registrar a balance sheet within such period, in such form and containing such particulars and annex such documents as the directors of the company would have been required to prepare or obtain if the company were a public incorporated under the Singapore Companies Act.

Income Tax Filing Requirement of Foreign Company’s Singapore Branch

For taxation purposes, a company includes:

  • A business entity incorporated or registered under the Companies Act or any law in force in Singapore. It usually has the words “Pte Ltd” or “Ltd” as part of its name; or
  • A foreign company registered in Singapore such as a branch of a foreign company; or
  • A foreign company incorporated or registered outside Singapore.

With effect from YA 2010, a company is taxed at a flat rate of 17% on its chargeable income regardless of whether it is a local or foreign company.

Non-Singapore incorporated companies and Singapore branches of foreign companies are controlled and managed by their foreign parent and are, therefore, regarded as non-residents. As the result, certian incentives and treaties which are only available to Singapore Tax Resident Companies do not apply to the branch. However, they may still be treated as Singapore tax residents if they are able to satisfy IRAS that certain conditions have been met.

The statutory deadline for filing corporate income tax return is 30 November of the Year following the year in which the company’s financial year ends (e.g., if the financial period of the branch is 1 July 20X4 – 30 June 20X5, the income tax return filing deadline for the company will be 30 November 20X6.

On top of the statutory deadline for filing corporate income tax return, the branch is required to file Estimated Chargeable Income (“ECI”) to Inland Revene Authority of Singapore within 3 months from the parent’s company’s financial year end (e.g., if the financial year end of the parent company is 31 Dec 20X5, ECI filing is due on 31 March 20X6).

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Annual General Meeting

Annual General Meeting

Annual General Meeting

When do I need to hold my company’s 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.
  • Private companies are allowed to dispense with AGMs if at a general meeting of the company a resolution to that effect is passed by all members with voting rights.

What happens if I am late for my AGM or Annual Returns?

Every company is required under the Companies Act to hold its Annual General Meeting (AGM) once in every calendar year and not more than 15 months (18 months for a new company) after the last preceding AGM (section 175). At the AGM, the directors must lay before the shareholders a profit and loss account that is not more than 6 months old at the date of the meeting (section 201). For a public listed company the profit and loss accounts must not be more than 4 months at the date of the meeting. The company is required to file its Annual Return (AR) within 1 month from the date of the AGM (section 197). Failure to comply with any of the 3 separate legal requirements under the law amounts to an offence and an appropriate penalty will be imposed.

Penalties for late lodgement of Annual Return for Local Company/Annual Filing for Foreign Company

Length of Default (Days) Late Lodgement Fee
Not more than 30 days $60
Between 31 days to 60 days (Both days inclusive) $120
Between 61 days to 90 days (Both days inclusive) $170
Between 91 days to 180 days (Both days inclusive) $220
Between 181 days to 365 days (Both days inclusive) $250
Between 366 days to 730 days (Both days inclusive) $350
Between 731 days to 1095 days (Both days inclusive) $350
More than 1096 days $350


Can I ask for an extension to hold AGM?

If your company is unable to keep to the timeline under section 201, you should make an application for an Extension of Time before the expiry of the timeline (or due date). Since the law requires that a company must hold its AGM on time, ACRA will generally not grant more than 60 days of extension. The extension can be applied by company officer (i.e. director of company secretary), or professional firm on behalf of the company.

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Setting up a Travel Agency

Setting up a Travel Agency

Setting up a Travel Agency

Companies or persons in the business of making travel arrangements or conducting tours in or outside of Singapore are required to apply for a Travel Agent Licence.​

Where to apply?
Online Business Licensing System (OBLS)

What is the applicable licence fee?
Licence Fee : S$300

Who awards the travel agent licence?
The Singapore Tourism Board (STB) is the government body that is responsible for the issuing of travel agency licenses.

Who needs a travel agent licence?
Under Section 4 of the Travel Agents Act (Cap. 334), a person carrying out the following activities would need to apply for Travel Agent’s Licence:

  1. sells tickets entitling an individual to travel, or otherwise arranges for a person a right of passage on any conveyance (not being a prescribed conveyance);
  2. sells to, or arranges or makes available for, a person rights of passage to, and hotel or other accommodation at, one or more places (being places within or outside Singapore, or some of which are within and others of which are outside Singapore);
  3. purchases for resale the right of passage on any conveyance (not being a prescribed conveyance);
  4. carries out such activity as may be prescribed; or
  5. holds himself out as, or advertises that he is, willing to carry on any activity referred to in paragraph (a), (b), (c) or (d).

Operators carrying out activities in (a) do not require a licence if they intend to use conveyances owned by them, and operators carrying out activities in (b) do not require a licence if they own both the conveyance and place of accommodation.

Engaging in the business of a Travel Agent without a valid licence is an offence under the Travel Agents Act.

What are the pre-conditions before proceeding to apply for a travel agent licene?

  1. Register the business with the Accounting & Corporate Regulatory Authority (ACRA) to conduct the travel agent business. For businesses that are not yet registered under ACRA, please approach STB on how to apply for a travel agent licence.
  2. Registered business must have a minimum paid-up capital of S$100,000 and a net worth of the same amount.
  3. All applicants must nominate a suitable person as the Key Executive.
    • The Key Executive is responsible for the day-to-day administration and operations of the travel agency. He should preferably be a director of the business (as listed in ACRA) and have managerial experience in the travel business.
  4. Set up an e-mail address specifically for the operation of your travel agency business.
  5. All directors, executives and managerial staff of the business must be fit and proper persons and of good character and fame.
  6. Specify an office to be used for the conduct of the travel agency business.

What are the forms to be completed in connection to the application of travel agent?

  • Completed copy of Business Activities & Market Specialisation Form
  • Latest ACRA Bizfile
  • Key Executive’s Resume
  • Key Executive’s NRIC / Employment Pass
  • Completed copy of the Key Executive Declaration Form
  • Confirmation of Business Address
    To furnish STB with a certificate of Stamp Duty, which confirms your business address. If you are using a home office, kindly provide us with the documents certifying URA/HDB’s approval for it to be under the ’Home Office Scheme’.
    For any sharing of premises with another office, to submit the following additional supporting documents:

    1. Landlord’s agreement to sharing of premises.
    2. Agreement from main tenant on the sharing of premises in a business letter.
    3. A ground plan showing proper demarcations between the licensee and other occupant(s).

    Photo of proper signage display at the main lobby/entrance and within premises.

  • Director Resolution on the appointment of the Key Executive< Printed on company’s letter head and signed by more than 50% of all directors with a valid company stamp./li>
  • Confirmation of Email Address, Business Telephone & Fax Numbers, and Website Address
  • Confirmation of Key Executive’s Mobile & Residential Number, all Directors’ Residential Telephone Numbers
  • Proposed First Financial Year-End of your Business (date/month/year)
    This is essential for determining the deadline for the annual submission of your audited accounts.
    Every travel agent is required to submit its audited accounts 6 months from its financial year end, in accordance to the Travel Agents Regulations (Cap 334).

How soon can my application be approved?
The application will take approximately one to two weeks to process upon full and complete submissions of supporting documents.

How do I know if my application has been approved?
You will be informed of the outcome of your application in writing by email.

When do I have to make payment for the Travel Agent’s Licence? How much does it cost? How long is its validity?
You are required to make payment for the Travel Agent’s Licence when your application has been approved. A Travel Agent’s Licence costs S$300. A Travel Agent’s Licence will expire on 31 December of the following year in which it was issued.

What if my application is rejected?
Section (7) of the Travel Agents Act (Cap. 334) states that: “Any person who is aggrieved by a decision of the Board under this section may, within one month of being notified of the decision of the Board, appeal against such decision to the Minister whose decision shall be final”.

Once my application has been approved, will I be governed by any Act or Regulations?
The Travel Agents Act and Regulations (Cap. 334) governs the licensing of the travel agents and the regulation of their operations. All licensed travel agents are required to be familiar with the provisions of the Travel Agents Act and Regulations (Cap. 334). You are advised to download a copy of the Travel Agents Act and Regulations (Cap. 334) via the TRUST website under the ‘Resources’ menu.

Where can I get information on Travel Agent’s Licence application?
Information on the pre-requisites and procedures in applying for a travel agent’s licence can be found in the Travel Agent Handbook. The Travel Agent Handbook can be found on the TRUST websited under ‘Resources’. You can also download the Travel Agents Application User Guide from the Bulletin Board.

What are the roles and duties of a Key Executive?
Regulation 17 (1) of the Travel Agents Regulations states that the Key Executive is responsible for the proper administration and management of the affairs of the travel agency. The Key Executive must also be contactable at all times.

What are the criteria a Key Executive has to fulfil?
The Key Executive must be a Singapore Citizen or Singapore Permanent Resident. If the proposed Key Executive is a foreigner, he/she must possess a valid employment pass or entrepass issued by Ministry of Manpower (MOM). The proposed Key Executive must be a Director of the company with relevant managerial experience in the travel business. The proposed Key Executive must submit his/her curriculum vitae to STB for assessment and approval.

Am I required to have an office premise for my business prior to my licence application?
No, you are not required to secure an office premise at the time of applying your licence. You will be notified to locate a suitable office once your licence application has been approved in-principle.

If my application is granted in-principle approval, can I start to operate my business?
No. You are not allowed to commence business until STB grants final approval to your application.

My company is an online marketing platform that provides deals via a third party travel agent. Does my company require a Travel Agent’s Licence?
If your company promotes the deals and sells them to the public, the company will be required to apply for a Travel Agent Licence. As the company is collecting payment from customers for such deals, it is no longer considered as just an online marketing platform.

My company is based in Singapore and receives chauffeur service bookings for guests from overseas. My company will then dispatch the booking to the guests’ destination. Will my company require a Travel Agent’s Licence in order to operate?
Based on the information provided, we noted the following: 1) Your company is based in Singapore. 2) Your company will be/is arranging for transport/conveyance, but does not own the transport/conveyance (where in Singapore or overseas) As such, your business falls within Section 4 of the Travel Agents Act (Cap. 334) and you are required to apply for a Travel Agent’s Licence.

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Setting up a Local Company

Singapore River and Merlion

Setting up a Local Company

What’s a Company

A business entity registered under the Companies Act, Chapter 50 and treated as an independent legal entity, i.e. separate from its directors and shareholders. Once incorporated, the company has perpetual succession and it can own properties, enter contracts and sue and be sued. It usually has the words “Pte Ltd” or “Ltd” as part of its name.

Types of Companies

  • Public Company Limited by Shares
    – More than 50 shareholders
    – Offers shares to the public
  • Public Company Limited by Guarantee
    – Not-for-profit, religious and charitable organizations
    – Has a board of trustees
  • Private Company
    – Up to 50 shareholders
  • Exempt Private Company
    – Not more than 20 shareholders
    – No corporate shareholders

Who Can Set Up a Local Company

  • Singapore Citizens
  • Singapore Permanent Residents (PRs)
  • Foreigners: Those residing local and managing the operations must apply for an Entrepass. Those residing overseas must have at least one locally resident director.

Company Name

The proposed name of the Company should not be identical or similar to any registered company or business. If a certain name is not available, an appeal can be submitted stating reasons or no objection letter from existing business owners/directors stating that they have no objection to use of such similar names. ACRA may take a few days for outcome in appeal cases. Otherwise, name approval is normally instant. However, names containing certain words such as “bank”, “insurance” or “financial services” and/or certain SSIC codes may require approval of other government bodies which may take 2 to 14 days.

Memorandum and Articles of Association

Memorandum and Articles of Association is considered as a statutory contract between a company and its members, and among the members themselves. It binds even new members entering the company after incorporation of the company. Non-compliance with the Articles is amount to procedural irregularity.

If a provision of a company’s Memorandum or Articles of Association is not observed then:

  • in case of non-compliance by a company, a member may be able to obtain a declaration or injunction requiring the company to comply
  • in case of non-compliance by a member, another member of the company may be able to obtain declaratory or injunctory relief or damages.

Companies currently have a choice to use their custom Memorandum or Articles of Association or adopt Model Memorandum or Articles of Association.

Local Address

Singapore companies must have a local address as a registered office address.

Residential addresses can be used as a business address under the Home Office Scheme. However, prior approval from the Housing Development Board (for HDB flats) or Urban Redevelopment Authority (for private properties) must be obtained in order to use residential premises (owned or rented) for home office use.

Share Capital

Paid-up capital: This refers to the issued capital that is paid up by the shareholders.

Issued capital: This refers to the share capital which has been allotted to the shareholders.

Director

The Company needs to have at least one director ordinarily resident in Singapore. If a foreigner wishes to act as a local director of the company, he can apply for an Employment Pass from the Work Pass Division of the Ministry of Manpower under the Entre Pass scheme. Only individuals can be a director (i.e. corporate directorships are not allowed). Minimum age for being a director is 18 years.

Shareholder

The Company needs to have at least one shareholder.

Either an individual (more than 18 years) or a corporate entity can be shareholder. No minimum local shareholding requirements. 100% ownership of Singapore companies can be owned by foreign persons or entities.

Company Secretary

Every company must appoint a secretary within 6 months of the date of its incorporation. The company secretary must be residing locally in Singapore. He/She must not be the sole director of the company. A private company is not required to appoint a properly qualified person as a company secretary unless mandated by the Singapore Company Registrar, ACRA.

The secretary of a public company must comply with section 171(1AA) of the Companies Act i.e. must possess at least one of the following qualifications:
– Been a secretary of a company for at least 3 of the 5 years immediately before his appointment as secretary of the public company.
– Qualified person under the Legal Profession Act (Cap. 161).
– Public accountant registered under the Accountants Act (Cap. 2).
– Member of the Institute of Singapore Chartered Accountants.
– Member of the Singapore Association of the Institute of Chartered Secretaries and Administrators.
– Member of the Association of International Accountants (Singapore Branch).
– Member of the Institute of Company Accountants, Singapore.

Business Activity

Prior to the Companies (Amendment) Act 2004, the Memorandum requires object clauses to clearly define the trade and business activities that the Company can operate in. However the 2004 Amendment Act removed this requirement and object clauses have been made non-mandatory, leaving the Company to be free to do any business activities so long as the Company has obtained the relevant and applicable business approvals, permits and/or licenses.

The types of business activities assigned to the Company are categorically classified in the Singapore Standard Industrial Classification (SSIC) 2010, which is the tenth edition of such business classification administered by the Department of Statistics Singapore.


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