SINGAPORE Law and Practice Contributed by: Terence Quek, Benjamin Cheong, Hoon Chi Tern and Favian Tan, Rajah & Tann Singapore
2. Establishing a New Company, Early-Stage Financing and Venture Capital Financing of a New Technology Company 2.1 Establishing a New Company New start-ups based in Singapore typically incorporate a private company in the country. Some South-East Asian start-ups incorporate a Singapore private company to function as the holding company and use the Singapore com- pany to conduct fundraising, while wholly owned subsidiaries are incorporated in the relevant countries to conduct operations. This is due to the ease of access to debt and equity funding in Singapore, given the exponential growth in the number of family offices – as well as private equity and venture capital funds – setting up in the country. Requirements The process of incorporating a private company can be completed in as little as one day, as elec- tronic filings are made with the Accounting and Corporate Regulatory Authority of Singapore (ACRA). However, prior to the incorporation, cor- porate secretarial providers require the directors and shareholders to prepare certain documents, including KYC checks. Post-completion, in addi- tion to the electronic register of members, com- panies are also required to privately maintain a register of registrable controllers (RORC). This sets out information about the company’s con- trollers, including: • their names and identifying details; and • information on their citizenship or place of registration (in the case of legal entities). Companies are required to privately maintain a register of nominee shareholders (RONS) con- taining the prescribed particulars of the nomi-
nee shareholders and their nominators. Further, enhanced measures have been introduced where there is no registrable controller – or the entity is unable to identify the registrable con- troller – where they are required to identify indi- viduals with executive control as their registrable controllers. With effect from 28 June 2023, new exemptions have been introduced for foreign companies from the requirements of keeping a register of their members, the RORC and RONS, if they sat- isfy certain prescribed requirements. The minimum paid-up capital required to incor- porate a private company is SGD1 (or its equiv- alent in foreign currency). However, licensing conditions in specific industries may impose a higher paid-up capital requirement. 2.2 Type of Entity For start-ups, private companies limited by shares are the most commonly incorporated entities in Singapore owing to the advantage of a separate legal personality. Investors, advisers and service providers are also most familiar with private companies limited by shares, allowing for ease of administration at the early stages of growth. Other options available to start-ups include companies limited by guarantee, general part- nerships, limited partnerships, limited liability partnerships and variable capital companies. However, these have other specific uses and are not generally relied upon by entrepreneurs. 2.3 Early-Stage Financing The profile of seed investors in early-stage financing varies, as it includes friends and fam- ily and angel/seed investors at the seed stage, and family offices and venture capital financing
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