One of the first questions every new entrepreneur asks us during incorporation is:

“If I declare S$10,000 as Paid-Up Capital, does that money have to stay frozen in the bank account?”

The short answer is NO.

There is a massive misconception that Paid-Up Capital is a “security deposit” lodged with the government. In reality, it is simply working capital.

In this guide, we bust the common myths about capital requirements and explain why putting in just S$1 might actually hurt your business banking application.

1. What is Paid-Up Capital?

Paid-Up Capital is the actual money that shareholders have injected into the company in exchange for shares.

  • If you own 100% of the shares and the capital is S$10,000, you must deposit S$10,000 into the company’s corporate bank account.

The Golden Rule: Once the money is deposited, it belongs to the company, not you.

2. Can I Use This Money? (The “Locked” Myth)

Can I Withdraw Paid Up Capital Singapore Myth vs Reality Usable Funds

Yes, you can use it immediately.

Once the S$10,000 hits your corporate bank account, it is Working Capital. You can use it to:

  • Pay office rent.

  • Pay supplier invoices.

  • Pay staff salaries.

  • Buy laptops or software.

What you CANNOT do:

You cannot simply transfer it back to your personal savings account for personal use. That is considered an illegal “Reduction of Share Capital” or an unauthorized Director’s Loan.

3. Is S$1 Enough? (The “Banking” Problem)

Legally, the minimum paid-up capital in Singapore is S$1.

However, while ACRA is fine with S$1, Banks and MOM are not.

  • Bank Account Opening: If a bank sees a company with only S$1 capital, they may view it as a “Shell Company” with no financial substance. This can lead to your account application being rejected or delayed.

  • Employment Pass (EP): If you plan to sponsor an EP for yourself or foreign staff, MOM typically expects to see a paid-up capital of at least S$50,000 to prove the company can pay salaries.

4. How to Inject Capital Later

Many founders start with S$1,000 to get the bank account open, and then increase it later. This is a standard secretarial process.

The Process:

  1. Deposit the funds: Transfer the new amount (e.g., S$49,000) to the company bank account.

  2. Proof of Transfer: Send the bank receipt to us (Excellence Singapore).

  3. ODG (Ordinary Share Issuance): We file the “Return of Allotment of Shares” with ACRA.

  4. Updated BizFile: Your public profile now reflects S$50,000 capital.

Conclusion: It’s Fuel, Not a Deposit

Think of Paid-Up Capital as fuel for your car. You put it in so you can drive (spend) it to get your business moving. It is not meant to sit in the tank forever.

At Excellence Singapore, we advise clients to start with a “respectable” amount (e.g., S$1,000 to S$10,000) to smooth out banking processes, knowing full well you can use that money for operations the very next day.

Need to increase your Paid-Up Capital?

Contact us for a Share Allotment Filing.