When you’re considering incorporating a company in Singapore, one of the first questions that may come to mind is: “How much capital do I need to set up?” Unlike many other jurisdictions, Singapore’s approach to registered capital (often referred to as paid‑up capital) is flexible and business‑friendly, making it a highly attractive destination for foreign entrepreneurs. However, while the minimum requirement might be modest, there are important considerations to understand, especially if you plan to open a bank account, apply for a work pass, attract investors, or operate in a regulated sector.
In this article, we explore registered capital requirements in Singapore, explain what “paid‑up capital” means, and highlight practical insights to help you make informed decisions when incorporating your business.
What Is Registered Capital?
In Singapore, the term registered capital typically refers to the amount of paid‑up capital that a company has declared at the time of incorporation, which is the value of shares that shareholders have contributed to the company as payment for their shares. It represents the equity that has been contributed to the company’s bank account and forms part of the business’s financial foundation.
It is important to distinguish this from authorised capital, a concept that has been abolished in Singapore. What matters today is the amount of issued and paid‑up capital the company chooses to declare when it is incorporated.
Minimum Paid‑Up Capital Requirement
One of Singapore’s most distinctive advantages for foreign founders is how low the threshold is for starting a company. Under Singapore law:
- The minimum paid‑up capital to incorporate a private limited company (Pte Ltd) is just SGD 1 (or equivalent in another currency).
This means that you can legally form a company with virtually no capital investment, making Singapore particularly accessible for new entrepreneurs, startups, and founders with limited upfront funds. Unlike jurisdictions that require a substantial minimum capital before incorporation, Singapore supports a “subscription” system where capital can be injected gradually over time.
Paid‑Up vs Issued Capital: What’s the Difference?
To clarify the terminology:
- Issued capital refers to the total value of shares a company has allocated to shareholders.
- Paid‑up capital refers to the part of the issued share capital that has been paid into the company by its shareholders.
For example, if a company issues 1,000 shares at SGD 1 each, its issued capital is SGD 1,000. But if shareholders have only paid SGD 500 into the company for those shares, the paid‑up capital remains SGD 500 until the remainder is paid.
This flexibility means you can declare a large number of shares with a low paid‑up value initially, then increase paid‑up capital later as your company grows or needs more financing.
Why Most Singapore Companies Start with SGD 1 Capital
The statutory minimum of SGD 1 makes incorporation affordable and straightforward, especially for founders operating on shoestring budgets or those who want to test the market before committing significant funds. Many small businesses and startups incorporate with this minimum capital to minimise early financial risk.
However, while SGD 1 meets the legal requirement, it may not be sufficient for practical business needs, such as:
- Applying for work passes (higher capital often strengthens the application)
- Demonstrating financial stability to investors or suppliers
In many cases, business owners choose to set a higher paid‑up capital from the outset to support these goals, not because the law requires it, but because it improves operational credibility and confidence among partners and institutions.
Industry‑Specific Capital Requirements
While most companies can register with SGD 1 capital, certain industries are subject to higher minimum requirements due to regulatory standards or risk management considerations. These include:
- Insurance intermediary firms: typically around SGD 300,000
- Travel agencies: around SGD 100,000, or SGD 50,000 if it only conducts tours and does not arrange accommodation
- Public accounting firms: around SGD 50,000
These figures are set by relevant industry regulators, not necessarily ACRA, so it’s essential to check with the relevant industry authority when planning capital for regulated sectors.
Practical Benefits of Having Higher Paid‑Up Capital
Although the statutory minimum is low, there are several reasons why founders often opt for higher capital:
- Better Access to Banking and Finance
Banks may request to see a substantive paid‑up capital figure when reviewing loan requests, or lines of credit. A higher capital level signals stability and commitment, which can make banking relationships smoother.
- Increased Credibility with Partners and Clients
Higher paid‑up capital can enhance a company’s profile when negotiating with suppliers, customers, and potential partners, especially in international or B2B contexts.
- Flexibility for Operational Needs
Capital can support early business expenses such as hiring staff, renting office space, investing in marketing, or purchasing inventory, which is particularly valuable before revenue begins to flow.
- Enhanced Investment Appeal
Investors often look at paid‑up capital as a sign of founder commitment and financial substance. A low capital base may raise questions for some institutional or venture investors.
When Paid‑Up Capital Matters Most
Although the legal threshold is set low, there are specific scenarios where founders should carefully consider setting a higher capital base:
Setting Up a Business License Application
Industries requiring government licenses (e.g., finance, education, travel services) may have their own capital benchmarks that exceed the SGD 1 minimum.
Employment Pass Applications
Certain immigration passes, such as the Employment Pass, have historically required the employing company to demonstrate its ability to sustain the salary costs of the prospective EP holder over a meaningful period of time.
Building Investor Confidence
Early‑stage investors often view paid‑up capital as part of the company’s funding strength. Having a credible paid‑up capital can be useful when raising external funds.
How to Set or Increase Paid‑Up Capital
Increasing paid‑up capital in Singapore is straightforward and can be done any time after incorporation. It usually requires:
- Shareholder’s Approval: Agreeing to issue additional shares or increase the paid‑up amount.
- Issuing New Shares: Allocating additional shares to be paid by existing or new shareholders.
- Filing with ACRA: Updating the company’s records to reflect the new paid‑up capital (through BizFile).
This flexibility allows companies to adjust their capital structure as business needs evolve.
Common Misconceptions About Registered Capital
“Registered capital must be fully paid at incorporation.”
Unlike some jurisdictions that require full payment of capital before registration, Singapore allows founders to declare capital and pay it up gradually over time. This is because the system works on a subscription basis rather than a full paid‑in requirement at the outset.
“A higher registered capital is always better.”
While higher capital can enhance credibility and financial strength, it does not automatically guarantee business success. Founders should strike a balance based on business needs, operational cash flow, and strategic goals.
Conclusion
Singapore’s approach to registered capital is one of its most entrepreneur‑friendly features, offering nearly unmatched flexibility for both local and foreign founders. With a minimum paid‑up capital requirement of just SGD 1, incorporating a company is financially accessible, even for startups and founders with limited initial capital.
However, while this statutory minimum makes Singapore appealing, many businesses choose to adopt a higher paid‑up capital to support banking relationships, licensing, operational needs, and investor confidence. In certain regulated industries, higher capital thresholds still apply, making it important to understand both legal requirements and practical expectations.
If you’re considering incorporating a company in Singapore and want guidance on deciding the right capital structure, working with a professional corporate services provider can make the process smoother and more strategic.