Procedures For Russian Companies To Establish A Company In Singapore
Процедуры для российских компаний по созданию в Сингапур
Incorporating a company in Singapore is a cost-effective and efficient process, allowing international investors to concentrate on pursuing their business opportunities across the region. This is of special relevance to Russian investors, as Singapore has a Free Trade Agreement with the Eurasian Economic Union. Singapore is also a member of the ASEAN bloc of countries, which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand and Vietnam. These countries enjoy collective free trade among them, and also have Free Trade Agreements with China and India. Within this grouping, Singapore has developed to become a services and financial centre for the region.
Vietnam has already signed off an FTA with the EAEU, while most other ASEAN nations are currently negotiating deals, making a presence in Singapore, as an Asian regional hub, an attractive proposition for Russian investors.
Investors into Singapore can process their applications within the same business day, and for a relatively low cost, and the transparent nature of the country’s business and legal system means any information a business requires is readily available online.
Russian businesses looking to establish a presence in Singapore may use the services of registered local advisors who can ensure your application is accurate and complete.
Apply for an entrepreneur pass or employment pass
Prior to registering a company, foreign investors or management need to obtain an entrepreneur pass (EntrePass) or employment pass (E-Pass). These are compulsory for foreigners looking to establish a business in the country.
The certain basic requirements to attain this include:
- Have started or will start a private limited company that is registered with the Accounting and Corporate Regulatory Authority (ACRA), the government body responsible for the monitoring of new companies; and
- A business proposal that is innovative or entrepreneurial in nature or has a good investment track record (the criteria can be found on the Ministry of Manpower’s website).
Apply for SingPass
After attaining the EntrePass, investors are eligible to apply for a Singapore personal access password (SingPass). This will enable foreign investors to access and perform online transactions with e-government services.
Reserve a company name
Investors need to reserve a company name before registering their company.
Once a name is chosen, this must be submitted via Bizfile, the e-filing system for tax and business requirements. Bizfile is managed by the ACRA and has the right to reject a proposed company name if it is identical, similar, or phonetically the same as a company already registered.
It costs S$15 (US$10) to register the name, which will then be reserved for 120 days. If the applicant does not incorporate the business within this time, the name will longer be reserved and is made available to the general public.
During the application process, applicants must specify their intended business activities by choosing from the Standard Industrial Classification (SSIC) code.
Set up requirements for subsidiary companies (private limited companies)
Subsidiaries are the preferred structure for international investors in Singapore, especially for multinationals and small and medium-sized (SME) companies.
This type of set up is often utilized to establish holding companies, who have the advantage of accessing local tax incentives and local corporate taxes.
Investors must ensure they have the following:
- A certificate proving the subsidiary is part of the parent company;
- The company must have at least one shareholder (an individual or a corporate entity);
- Investors must indicate the amount of issued capital by the shareholder (the minimum issued capital is US$1);
- The appointment of at least one director who is either a Singaporean citizen, permanent resident, or EntrePass holder;
- The director needs to be at least 18-years of age and must not have a history of misconduct or bankruptcy in their work history;
- The subsidiary will need to supply a registered local office address (a registered address refers to the place where all the company’s communications and notices are sent to, and where all the records are kept); and
- The company must appoint a secretary within six months of incorporation (the secretary must also be a local resident in Singapore).
Registering on Bizfile
Once the administrative components are complete, investors can use their SingPass passwords to register their company through Bizfile.
Opening a bank account and annual filing
Once the subsidiary is incorporated, investors can open a corporate bank account with any of the international banks in the country. The company will also be subjected to the same yearly filing requirements as domestic ones.
Set up requirements for branch offices
Investors looking to set up branch offices must ensure its activities do not go outside the scope of the parent company.
The parent company will bear all the liabilities of its branch office as it is viewed as a legal extension of the parent company. This means they are also subject to Singaporean taxes and are not eligible for local tax incentives and exemptions.
To establish a branch office, investors will need to submit the following documents:
- The company name sent to ACRA must be the same name as the parent company;
- Notarized copies of the certificate of incorporation of the parent company;
- Details about the directors of the parent company;
- Notarized copies of the article of association of the parent company;
- A minimum of two local representatives who will act on behalf of the branch office in Singapore;
- A Singapore registered office; and
- Applicants must specify their intended business activities by choosing from the SSIC list.
Once all the requirements are fulfilled, investors are obliged to register their company through BizFile, and can open a corporate bank account.
Set up requirements for a representative office
A representative office (RO) is a temporary administrative office set up to coordinate non-commercial activities of the foreign company.
They are normally established to explore potential opportunities in Singapore and the region and can operate for a maximum of three years from inception.
As a temporary administrative office, the RO cannot engage in profit-yielding business activities and can only participate in information gathering or market research-based activities.
Russian investors wishing to establish an RO in Singapore must ensure:
- The parent company has been established for more than three years;
- The parent company has incurred an annual sales turnover of more than US$250 thousand;
- The RO has a representative from their own HQ or a Singaporean citizen; and
- The RO does not hire more than four local employees as support staff.
Apply via Enterprise Singapore
Applicants from non-finance industries must apply through Enterprise Singapore (ESG), the government agency under the Ministry of Trade, to monitor and support new SMEs in the country.
Investors must submit to ESG via its online portal:
- A copy of the parent company’s certificate of incorporation; and
- Copies of the parent company’s recent financial reports
Applicants are usually approved within one week but may be extended to two weeks if there are any additional clarifications required.
Apply via the Monitory Authority of Singapore
For ROs operating in the finance industry, applicants must register with the Monitory Authority of Singapore (MAS), the country’s financial regulatory authority.
Investors are required to submit the following documents to MAS:
- Certified copy of the parent company’s certificate of incorporation;
- Annual financial reports for the last two years as well as a profit and loss balance sheet from the last three months;
- A letter from the parent company’s original company approving of establishing an RO in Singapore, if such approval is required;
- Certified copy of any licenses issued by the financial supervisory authority in the parent company’s home country approving of the company’s business activities;
- Provide a brief history of the applicant, its business activities, and corporate structure; and
- Detailed information on the proposed operations in Singapore.
Once the RO is incorporated, investors can open a corporate bank account with any of the international banks in the country.
With Singapore very much at the forefront in servicing international business growth and development in Asia, and with the country enjoying both a Free Trade Agreement with the Eurasian Economic Union and a Double Tax Treaty with Russia, the road is open to Russian investors to utilize Singapore as a launch pad for investing elsewhere in ASEAN, China and India.
During these uncertain times and with sanctions in place, our firm helps Russian companies relocate to Asia. We also provide financial and sanctions compliance services to foreign companies operating in Russia. Additionally, we offer market research and advisory services to foreign exporters interested in doing business in Russia as the economy looks to replace Western-sourced products. For assistance please email email@example.com or visit www.dezshira.com