Stocks and Shares in Singapore (2025)

Investing in stocks in particular or securities in general in Singapore - a highly rated business destination in Asia - is an option that many investors are interested in because of the inherent advantages of a transparent financial market and preferential policies from the Government.

This article by GLA will provide a deeper insight into the nature of shares, the differences between the different types of shares, and what they mean for businesses setting up a company in Singapore for the first time.

1. What are stocks?

When a company raises capital, the capital is divided into small, equal parts called shares. The person who buys the shares is called a shareholder. The shareholder is given a certificate of ownership of the shares called a stock. Thus, a stock is a proof of the shareholder's ownership of the company.

For a new company Singapore company registration, the first and most important thing is to determine who owns the company, through the proportion of capital shares contributed by shareholders to the company. Usually, the founder will become the first shareholder.

2. The nature of stocks

Basically, shares can be viewed as rights and obligations given to shareholders when they invest capital in a company. Shareholders have no legal interest or profit in the assets of the company, because the company is a separate legal entity. However, according to the provisions of the company's constitution and based on their ownership of shares, shareholders are entitled to a portion of the assets if the company is dissolved.

Companies can issue shares to investors (shareholders) at any time, as long as the company is established and operating. Share ownership is represented by the number of shares issued to them.

3. Share rights

Most companies will only issue one type of share, called ordinary shares. Singapore corporate law is more flexible, allowing a company to issue different classes (classes) of shares. This also means that different shareholders are given different rights within the same company.

The benefits of shareholders when investing in stocks are:

3.1. Voting rights

 This is one of the basic rights of shareholders, and normally, each common share will have one vote at the meeting. However, there are also types of shares that do not have voting rights (only in a few special cases).

3.2. Right to receive dividends

A portion of a company's profits distributed to each share is called a dividend. Dividends are paid if the company makes a profit and are usually paid out in proportion to the number of shares the shareholders own.

Corporate charters have become more flexible, allowing a company to issue multiple classes of shares. This allows directors (shareholders) to vary the dividend rate depending on the class of shares.

3.3. Right to receive dividends if the company is dissolved

If a company goes bankrupt, shareholders are distributed assets after all debts and expenses have been paid. The distribution is based on the proportion of their respective contributions to the company's capital stock. If a company issues multiple classes of stock, the company's charter may stipulate that certain classes of stock will be distributed first.

4. Types of stocks

In Singapore, the issuance of multiple classes of shares is common in both public limited companies (LLCs) and private limited companies. A private limited company still wants to diversify its dividend payments to different shareholders, by issuing non-voting shares to family members or employees.

Singapore law is flexible in providing for different classes of shares, and there is no restriction on the different rights of different classes of shares. The shares can be called anything – such as “preference shares” without voting rights, and management shares with voting rights, Alphabet shares (such as Class A shares and Class B shares). These classes of shares do not have any legal definition, so the respective rights need to be determined in the Memorandum and Articles of Association, or the Resolution for the issuance of special shares.

Some types of shares and their corresponding rights:

5. Transfer of shares in Singapore

After the company is established and shares are issued, shareholders have the right to transfer shares to other individuals or organizations. This transfer must comply with the provisions of the Company's Charter and the Singapore Companies Act.

Notes that company owners need to pay attention to when transferring shares of a Singapore company:

• If the company has multiple classes of stock, check to see if there are restrictions on each class of stock.
• Some companies require board approval before making a transfer.
• The transfer may affect control of the company, especially for voting shares.

For more details, you can learn more through the article about How to transfer shares of Singapore company.

6. How GLA supports businesses to comply with the shareholding law for Singapore companies

Although most small startups tend to grant equity per share to shareholders, founders and investors still have flexibility in controlling the level of management and the amount of claim they have on the company's profits or assets.

With economic and financial advantages and incentives from the Singapore government In order to attract investment, Singapore is a market worth considering for foreign businesses wishing to put their money in the right place by investing in securities in general or stocks in particular.

GLA will support Businesses

• Consulting on appropriate shareholding structure: GLA helps businesses determine the optimal shareholding ratio, ensuring the rights and obligations of shareholders.
• Ensure that the process of issuing, buying, selling and transferring shares complies with legal regulations in Singapore.
• Prepare the necessary documents to ensure that the stock issuance is carried out in accordance with regulations.
• Help businesses understand and correctly apply regulations on shares in Singapore, avoid legal risks and optimize shareholder rights.

If a business wants to open a company in Singapore, GLA will

At Global Links Asia, we have over XNUMX years of experience helping SMEs and entrepreneurs expand into international markets. We understand what you need and provide comprehensive support for a smooth, hassle-free share transfer process.

• Ensure compliance with Singapore laws for an effective transfer.
• Choose the right company structure after capital transfer.
• Offer end-to-end services to optimize costs and operations.
• Offer you nominee director, secretary, andregiserted adress solutions.
• Manage your company financially with our one-stop cost-efficient tax accounting services for Singapore companies
• Open a bank account with a reputable bank in Singapore.
• Support with Consular legalization, trademark registration, payment gateway setup, and more.

5. Frequently asked questions about Singapore stocks

Highlights

• Stocks are proof of ownership by shareholders of a company and give them rights such as voting, receiving dividends and sharing assets if the company dissolves.
• Types of shares include common shares, non-voting shares, redeemable shares, preferred shares, and other special types of shares.
• Share transfer is an important process in corporate governance, requiring compliance with the company's charter and Singapore laws.
• GLA supports businesses in the process of transferring shares and preparing share certificates when opening a company in Singapore, ensuring legal compliance and optimizing benefits for businesses.