Guide to Setting Up Non-Profit Entities in Singapore

Singapore is a thriving hub for businesses, but it is also home to a growing number of non-profit organizations (NPOs) dedicated to making a positive social impact. If you're looking to set up a non-profit entity in Singapore, it's essential to understand the available structures, legal requirements, and registration processes. This guide provides a comprehensive overview of how to establish a non-profit entity in Singapore.

Why Set Up a Non-Profit Entity in Singapore?

Singapore's stable legal framework, transparency, and strong philanthropic culture make it an attractive destination for non-profit initiatives. Key benefits include:

• Supportive Ecosystem: Access to government grants, partnerships, and a robust network of donors and volunteers.
• Tax Incentives: Approved charities enjoy tax exemptions and donors can receive tax deductions.
• Global Recognition: Singapore's reputation as a financial and business hub adds credibility to non-profit initiatives.

Types of Non-Profit Entities in Singapore

Non-profit organizations in Singapore can be structured in several ways, depending on the nature and scale of their activities:

1. Society

A society is an association of individuals united for a common purpose, such as social or community work.

Key Features:

• Governed by the Societies Act.
• Requires at least 10 members for registration.
• Suitable for groups focused on social causes or community service.

Advantages:

• Simple structure for small, member-driven initiatives.
• Minimal compliance requirements.

Disadvantages:

• Limited capacity for large-scale fundraising.
• Members are personally liable for debts.

2. Charitable Trust

A charitable trust is created to manage assets and funds for a charitable purpose.

Key Features:

• Governed by the Trustees Act.
• Typically used for asset-based initiatives.
• Requires trustees to oversee operations.

Advantages:

• Ideal for managing large donations and endowments.
• Offers flexibility in funding allocation.

Disadvantages:

• Legal and administrative setup can be complex.
• Requires professional oversight.

3. Company Limited by Guarantee (CLG)

A CLG is a corporate entity established without share capital, where members agree to contribute a fixed amount in the event of winding up.

Key Features:

• Governed by the Companies Act.
• Requires at least one director and one member.
• Suitable for larger, structured non-profits with a focus on fundraising and scalability.

Advantages:

• Separate legal entity with limited liability.
• Eligible for charity registration and tax exemptions.

Disadvantages:

• Requires more compliance and regulatory filings.
• Higher setup and maintenance costs.

Steps to Set Up a Non-Profit Entity in Singapore

Step 1: Define Your Objectives

Clearly outline your organization's mission, vision, and activities. Ensure that your goals align with Singapore's regulations for non-profit and charitable work.

Step 2: Choose a Suitable Structure

Select the legal structure that best fits your objectives, scale, and funding model (Society, Charitable Trust, or CLG).

Step 3: Register Your Entity

For Societies:

• Register with the Registry of Societies (ROS).
• Submit the constitution, details of office bearers, and objectives.

For Charitable Trusts:

• Appoint trustees and draft a trust deed.
• Register with the Commissioner of Charities if applying for charity status.

For CLGs:

• Incorporate via the Accounting and Corporate Regulatory Authority (ACRA).
• Provide a constitution and details of directors and members.

Step 4: Apply for Charity Status (If Applicable)

To qualify as a charity:

• Register with the Commissioner of Charities.
• Ensure your objectives fall under one or more charitable purposes, such as education, relief of poverty, or advancement of religion.

Step 5: Open a Corporate Bank Account

Set up a bank account in the organization's name to manage funds and donations.

Step 6: Ensure Compliance

Non-profits must:

• File annual returns and financial statements.
• Maintain proper records of activities and donations.
• Comply with relevant regulations under the Charities Act (if applicable).

Tax Benefits for Non-Profits

Approved charities in Singapore enjoy:

• Tax Exemptions: Income used for charitable purposes is tax-exempt.
• Donor Tax Deductions: Donations to Institutions of a Public Character (IPCs) qualify for a 250% tax deduction.
• Goods and Services Tax (GST) Benefits: IPCs can claim refunds on GST paid for non-business activities.

Common Challenges and How to Overcome Them

1. Complex Compliance Requirements: Engage a professional advisory firm to handle regulatory filings and compliance.
2. Securing Funding: Develop a strong fundraising strategy and build partnerships with donors and corporate sponsors.
3. Operational Scalability: Use a structured legal entity like a CLG to support growth and scalability.

Why Engage Apexia Corporate Advisory?

Setting up a non-profit entity involves navigating legal, regulatory, and operational complexities. Apexia Corporate Advisory offers:

• Expert guidance on selecting the right structure.
• Seamless registration and compliance support.
• Advice on obtaining charity status and tax exemptions.
• Ongoing corporate governance and financial reporting services.

Our team ensures your organization is set up for long-term success while you focus on creating a meaningful impact.

Conclusion

Setting up a non-profit entity in Singapore is an impactful way to contribute to social change. By choosing the right structure and adhering to compliance requirements, you can establish a sustainable organization that achieves your mission. Need help with the process? Apexia Corporate Advisory is here to assist. Contact us today for personalized advice and support!