Open An Exempt Private Company in Singapore
Singapore, a bustling hub of commerce and innovation, has long been a magnet for businesses looking to tap into the vibrant Asian markets. Among the myriad of corporate structures the city-state offers, the Exempt Private Company (EPC) stands out for its unique blend of flexibility and advantages. Tailored for smaller enterprises, the exempt private company in Singapore is a testament to Singapore’s dedication to supporting companies of all sizes.
If you are looking to register a company in Singapore and want to set up an EPC, then this introduction delves into the EPC’s essence, offering insights into why it has become a preferred choice for many entrepreneurs in this dynamic nation.
What is an Exempt Private Company (EPC)?
An exempt private company is a distinct category of private limited companies in Singapore designed to support smaller businesses and reduce their administrative burden. Here are the defining features:
- Shareholders: A maximum of 20 shareholders are permitted for an EPC. These shareholders should be individuals, and there shouldn’t be any corporate entities holding shares in the company.
- Annual Revenue: The company’s annual revenue for the specific financial year must not surpass the S$5 million mark. This criterion ensures that the EPC structure benefits smaller enterprises and not large corporations.
- Public Exposure: An EPC is essentially a private entity. It cannot offer its shares or bonds to the public, ensuring it maintains its status as a private entity and doesn’t become publicly traded.
Why Consider Setting Up an Exempt Private Company in Singapore?
Singapore’s business-friendly climate makes it an ideal location for international businesspeople. Opting for an EPC structure can provide additional advantages:
- Ease of Business Operations: With streamlined regulations, EPCs can operate more smoothly, focusing on core business activities rather than being bogged down by red tape.
- Credibility: Despite its simpler structure, an EPC is a recognized and respected entity in Singapore. This can bolster the company’s reputation in both local and international markets.
- Capital Raising: Even though EPCs can’t offer shares to the public, their structure can be attractive to private investors, venture capitalists, or angel investors looking for promising startups or SMEs to fund.
How to Set Up an Exempt Private Company in Singapore?
Establishing an exempt private company in Singapore is a straightforward process but requires attention to detail:
One of the first steps for registering an exempt private company in Singapore is to choose a company name. You must choose a name that is unique and not in use by other entities. Once the name is chosen you need to reserve the name in the Singapore ACRA’s online portal. Remember, the name should reflect the nature of your business and not violate any trademarks.
Gather and submit all necessary documentation, such as articles of association and details of shareholders and directors, to ACRA. Ensure you fulfill all the criteria for an EPC.
Appointment of Officers
An EPC must have a minimum of one director who is a resident of Singapore. Additionally, a company secretary must be chosen within six months following the establishment of the firm. The secretary will be responsible for administrative and compliance tasks.
Open a Corporate Bank Account
With your company successfully registered, the following step is to open a business bank account in one of Singapore’s reputable banks. Make sure you have all the required paperwork on hand, as different banks may have varying requirements.
Advantages of an Exempt Private Company in Singapore
Choosing the EPC structure for your business in Singapore comes with a plethora of benefits:
- Simplified Financial Reporting: EPCs aren’t required to present as detailed financial statements as other company types, which can reduce the time and costs associated with financial compliance.
- Tax Incentives: The Singaporean government provides several tax reliefs and deductions exclusive to EPCs. This can significantly reduce the company’s tax liability and improve its profit margins.
- Auditing Exemptions: If an exempt private company in Singapore meets specific criteria, such as its annual revenue being below a certain threshold, it can be exempted from mandatory audits. This not only lowers expenses but also administrative time.
- Streamlined Compliance: EPCs face fewer regulatory hurdles and compliance checks, allowing the business to focus on growth and operations rather than bureaucratic processes.
In the ever-evolving business landscape of Singapore, the exempt private company stands as a beacon of opportunity for small to mid-sized enterprises. The city-state, known for its commitment to fostering business growth, has ensured that the EPC structure offers a balance of regulatory ease and business benefits.
Looking to embark on your business journey in Singapore? You can speak with experts from OnDemand International. Our dedicated team of experts stands ready to be your trusted partners, assisting you in the meticulous process of document collection and the procurement of essential business licenses. With our support, your business aspirations will find the solid foundation they deserve in the dynamic landscape of Singapore’s business ecosystem.
An EPC is a private company that has a maximum of 20 shareholders. , none of which are corporations, and have a yearly revenue not exceeding S$5 million.
While many companies in Singapore are subjected to mandatory audits, EPCs can be exempted under specific conditions, such as if their annual revenue falls below a certain threshold.
EPCs can avail of various tax exemptions and rebates provided by the Inland Revenue Authority of Singapore (IRAS), making it financially advantageous for smaller businesses.
No, an EPC cannot offer its shares or bonds to the public, ensuring it remains a private entity.
An EPC must appoint a company secretary within six months of its incorporation.
While it’s not mandatory by law, having a separate corporate bank account is highly recommended for clear financial record-keeping and to enhance business credibility.