With Singapore’s Ministry of Law’s recent call for applications under the Qualifying Foreign Law Practice (QFLP) licensing programme, a more liberal legal system is on the horizon, especially for foreigners. Many international law firms can now set up their branches or offices in Singapore and benefit from its excellent legal and arbitration system.
Notwithstanding this development, there is still due process for establishing a law firm in Singapore, regardless of whether you are a citizen or a foreigner. This article presents a guide on starting your law firm in this prosperous Asian country and what you must consider before entering the legal industry. But first, let’s examine some of the benefits of this endeavour.
Why Set Up Your Law Firm In Singapore?
Singapore is a safe and transparent bet for any foreign law firm that wishes to enjoy a slice of its legal pie. It has a world-class education system, political stability, a robust economy, and a solid infrastructure network. Also, Singapore remains one of the most economically competitive countries in the world, with a unique and comprehensive legal system.
Besides these, the Asian country hosts one of the most prestigious legal education systems globally: For instance, the National University of Singapore Law School was honoured as one of the world’s top law schools according to QS rankings. Also, other law schools, such as the Singapore Management University Law School, are able to attract world-class talents to join them and enhance their legal capabilities. Therefore, setting up your law firm there may help you to easily find many highly trained and experienced lawyers to boost your practice.
Overview Of The Legal Industry In Singapore
There are over 100 international law firms with significant bearing in Singapore. Additionally, the QFLP licensing program that began in 2008 has accorded a higher status to 6 approved international law firms. These firms include Allen & Overy, Herbert Smith, and Norton Rose, currently practising and rendering legal services in approved commercial and corporate law areas. As expected, such work is of great value— in a 2001 census, it was found that $25 million alone was derived from cross-border transactions in 2000.
In 2017, the legal industry in Singapore reached a total worth of more than $2 billion, contributing to around 0.5% of the country’s Gross Domestic Product. There were also more than 1,000 firms that employed about 12,900 workers, half of which were lawyers.
There are four primary forms of legal practices in Singapore. These include Joint Law Ventures (JLVs), Qualifying Foreign Law Practices (QFLPs), Foreign Law Practices (FLPs), and Singapore Law Practices (SLPs).
SLPs can provide local and foreign law-related legal services in or from Singapore. An SLP can be a sole proprietorship, partnership, limited liability partnership, or company. Still, applying for a law firm licence, limited liability law partnership licence, or law corporation licence as applicable is required.
An SLP must satisfy the threshold requirements in Rule 3 of the Legal Profession (Law Practice Entities) Rules 2015 as long as its licence remains in force. The threshold requirements include limits on the number of foreign lawyers who can practise, be directors, partners, shareholders, or share in the SLP’s profits.
FLPs can provide in or from Singapore foreign and local law-related legal services through certain types of registered lawyers.
QFLP blueprint was introduced in 2008, allowing foreign law practices that obtain a QFLP licence to provide legal services in or from Singapore. In addition, foreign and Singapore law-related legal services are also allowed in the “permitted areas of legal practice” through certain types of registered lawyers. The QFLP licence is awarded after an application and selection process.
JLV is a legal entity formed between a Singapore Law Practice (“SLP”) and either a Foreign Law Practice (“FLP”) or a Qualifying Foreign Law Practice (“QFLP”).
The most common form of practice in Singapore is SLP, followed by FLP, QFLP, and JLV.
How to Start Your Law Firm in Singapore
Obtain a Practising Certificate
Every lawyer who wants to practice in Singapore must get a practising certificate (PC). So, you need to get a PC before you can set up your law firm. The steps to achieve this status are as follows:
- Apply for professional indemnity insurance from the Lockton Singapore Scheme Portal. When you render advisory services, this indemnity insurance protects you against liability, such as legal defence costs and client claims.
- Wait for a confirmation email from Lockton Singapore.
- Submit your PC application via eLitigation or LawNet Service Bureau after 24 hours from receipt of your confirmation email.
Note: The fees for a PC application may differ depending on your Post-Qualification Experience (PQE). The table below lists the relevant fees corresponding to the three PQE categories.
|Category||No of years (PQE)||PC Fees payable per year|
|Junior||< 5 years||$750|
|Middle||5 – 15 years||$900|
|Senior||> 15 years||$1,050|
If you belong to the Junior or Middle category, you need to participate in voting in the elections for the Council of the Law Society of Singapore before applying for a PC. A default in doing so may result in a penalty of $500 payable to the Law Society of Singapore.
Also, you need to have at least three years of PQE before being able to start your law firm. You will also be required to complete a Legal Practice Management Course unless you have been in practice since before 9 March 2007
Find a Suitable Name for Your Law Firm
All legal firms in Singapore must have a name and one that is not misleading or diminishing the dignity of the legal profession. Furthermore, the name must not be similar to the name of another law practice in Singapore. Here are the steps to get your firm’s name registered.
- Login to the Legal Services Regulatory Authority (LSRA) e-portal and complete the LSRA application form relevant to the type of law practice you wish to set up.
- You must submit the proposed name for your law firm and your application for a law firm license on the LSRA e-service porter, after which about 3-16 weeks might be needed for processing.
- Once your application has been approved, you will receive an in-principle approval letter issued by LSRA.
Register Your Business with ACRA
Once you receive the required approvals from the LSRA, you need to register your law firm as a business entity with ACRA via Bizfile+.
Receive the Licence/Certificate from LSRA
After your business is registered with ACRA, you need to update the UEN issued by ACRA as well as upload the professional indemnity insurance document (if available), and pay the licence/registration fee on LSRA.
Once LSRA verifies the UEN and payment, it will issue the licence/certificate.
Registration of Foreign Lawyers
Now that you have the certificate from LSRA, you can hire foreigners who wish to practice in Singapore. But, first, you would need to register them by following the below-mentioned steps:
- Login to LSRA e-Services using SingPass.
- Submit a complete and duly signed application form and pay the required fee. The form should be signed by the Registrant and the Managing Partner, Managing Director, Partner or Director (or equivalent) with the requisite authority of the applicant law practice entity.
- Also, if a Singapore law practice (“SLP”) is registering a foreign lawyer as a partner, director or shareholder or to share in its profits, they need to get the approval of the Director of Legal Services under section 176(1) of the Act. After submitting the registration for the foreign lawyer, they need to simultaneously submit an application for Approval to Hold Interests in a Law Practice via LSRA e-Services.
- The outcome can take about 3-6 weeks, depending on factors like documents submitted or the time of the year.
- If the application is approved, one must pay the registration fee by logging in to LSRA e-Services.
- Once the fee is paid, the LSRA will issue the Certificate of Registration (“CoR”).
- Lastly, to start working, a foreigner would have to get a valid Work Pass from the Ministry of Manpower (MOM).
You May Need an Office Space
Start your search for office space and staff. It is advisable not to invest in some fancy office space. Instead, consider factors like location, convenience, size of premises, office design, and cost.
Other Things to Note
Once your application is approved, you will be issued a law firm licence valid for five years and can be renewed subsequently. Also, you have up to 6 months from the “Valid from” date stated in your law firm licence to set up a Singapore office and begin operations.
The process for foreigners to set up a law firm in Singapore is highly comparable to that for Singaporeans. However, foreigners have to take additional steps, such as registering with the LSRA to practise in Singapore and passing the Foreign Practitioner Examinations (except unless there’s a reason for the exemption in these examinations).
Opening and managing your law firm gets more difficult as you deal with legal practice while simultaneously handling the pressures of being a business owner. Hence, engaging a corporate services firm can be helpful when setting out to start your law firm in Singapore.
A corporate services firm may assist with the application procedure and set up a favourable business structure for your law firm. This would be especially helpful to foreigners interested in setting up a law firm in Singapore but who don’t have a Singpass account since a corporate services firm is permitted to apply on their behalf.