A Foreigner’s Guide: How to Start a Business in Singapore

A Step By Step Guide for Foreigners to Start a Business in Singapore

Singapore, a name that signifies an economic powerhouse in Asia, has been one of the favourite investment hotspots for foreigners. Starting a new business in Singapore is a daunting task. However, it is straightforward if you are guided by professional advice and assistance. Read on, as this article will help you navigate through the company incorporation procedures in Singapore.

 

Why Start a Business in Singapore?

1. Strategic Location: Situated in Southeast Asia, Singapore is a gateway to major Asian markets, providing businesses access to a vast customer base.
   
2. Business-Friendly Environment: Singapore consistently ranks high in the World Bank’s Ease of Doing Business Index, thanks to its efficient regulatory framework and pro-business policies.
   
3. Favourable Tax Regime: The country offers low corporate tax rates, tax exemptions for startups, and no capital gains tax, making it financially advantageous for businesses.
4. Robust Legal and IP Protection: Singapore has a strong legal system that safeguards intellectual property rights, providing businesses with confidence in protecting their innovations.
   
5. Access to Skilled Talent: With a highly educated and multilingual workforce, Singapore offers a pool of skilled professionals to support various business needs.
   
6. Advanced Infrastructure: The country boasts world-class infrastructure, including efficient transportation systems and cutting-edge digital connectivity.
7. Supportive Government Initiatives: Singapore’s government provides various grants, funding schemes, and support programs to encourage entrepreneurship and innovation.
   

Global Financial Hub: As a leading financial centre, Singapore offers access to a wide range of banking and financial services, facilitating business operations and growth.

 

What to Consider Before Incorporating a Singaporean Company?

1. Do you have the right working pass?

First things first, you must have the right working pass, such as Employment Pass (“EP”) or EntrePass. Which one you apply for depends on the nature of your business.

However, an EP or EntrePass, is not needed if you intend to run your business without relocating to Singapore. Furthermore, you can appoint a local nominee director to fulfil the Company registration requirement in Singapore.

2. Are you age 18 years and above?

In Singapore, any person age 18 years or above is eligible to register a company. Apart from the age limit, he or she cannot be a criminal (convicted any legal offense). Also, the person can’t be bankrupt.

3. Do you need/have professional assistance and help?

As mentioned, setting up a new company in Singapore can be a daunting task without the  guidance and assistance of professionals. For one, getting help from a Singaporean company incorporation service provider will save you time and energy when dealing with the incorporation process. Besides that, professional help and advice will help you to navigate the ins and outs of doing business in Singapore with ease.

 

How to Incorporate a Company in Singapore?

 

1. Decide the business structure

a) Sole-Proprietorship

• You can setup a sole-proprietorship in Singapore and run it from abroad, with the condition that you hire an authorised representative. This representative must initially be a resident of Singapore, i.e, Singapore citizens or permanent residents. Well, you can also appoint an Entrepass holder as your representative. Likewise, you will need an Entrepass if you wish to live in Singapore and run your business.

b) Partnership

• Other than sole-proprietorships, you can register your business as a partnership in Singapore. For this, at least one of your partners must be ordinarily residing in Singapore. Similar to sole-proprietorships, you will also need an authorised representative if you want to run your business from outside the city-state. You can also stay and run your business from Singapore. In this case, you will need an Entrepass.

c) Subsidiary

• A subsidiary company is the standard type of business structure for a foreign entity. In Singapore, a subsidiary company is a type of limited liability company that a foreign parent company can have 100% shareholding in. Also, a subsidiary company is a separate entity from its foreign parent company.

d) Branch Office

• A branch office is a proper legal entity after registration, whereas a branch is usually an extension of its parent company. A branch office has to employ a minimum of one employee. Similarly, the person should be an ordinary Singapore resident. However, a branch office is not a separate entity from its parent company (unlike a subsidiary company). Due to this, the parent company is liable for all its debts and liabilities.

e) Representative Office

• As the name implies, a representative office is established solely for market research and feasibility studies. You cannot engage in profit-generating business activities. Furthermore, a representative office does not have a separate legal identity from its foreign parent company, and is required to employ no more than five employees. Thus, you can open a representative office if you want to analyse the market before establishing whole business house.

 

2. Name your business

The second step is to decide on a business name for your company. In Singapore, be sure to do a name check (to determine the availability of your proposed business name) before you register your desired company name with the Accounting and Corporate Regulatory Authority (“ACRA”). According to the regulations, your name can’t be vulgar. Additionally, the proposed name should not be too similar to that of other companies.

3. Incorporate your business

A. Before the incorporation, make sure:

a) Your business name is the ACRA-approved company name.

• b)

You have at least one shareholder.

• c)

At least one of your company directors is residing in Singapore. In Singapore, having at least one local director (he or she can be either a Singapore citizen, a Permanent Resident, or a person holding an EntrePass, Employment Pass, or Dependent Pass) is a mandatory requirement.

• d) You have appointed one Company Secretary.

The person must be a Singapore’s resident. On the other hand, he/she should have the required skill set.

• e)

You have at least S$1 of paid-up capital.

f) Your business has a local address as the registered company address.

B. What are the documents required by ACRA (for company registration)

a) Company Name

b) Short description of business activities

c) Details of shareholder(s)

d) Details of the director(s)

e) Details of the company secretary

f) Registered Address

g) Company Constitution

C. Company registration process
ACRA fully computerizes the company registration process in Singapore. A company can be incorporated in a two-day window. After the company incorporation process, the new company can purchase a Business Profile from ACRA. You will need this profile for bank account opening and the business licenses application. The business profile contains the following:

• registration number (UEN),
• date of registration,
• shareholders
• the profile also consists of other relevant information.

 

4. Open a bank account

The next step is to open a bank account in Singapore. To put it simply, it is a well-established fact that Singapore is not only an economic powerhouse in Asia but also globally On top of its competitiveness in economic performance, Singapore is famous for its well-established financial sector. 

To put it simply, it is a well-established fact that Singapore is not only an economic powerhouse in Asia but also globally Long story short, it is a known fact that Singapore is not only an economic powerhouse in Asia but also in the world. It is also one of the safest countries in which to do business. Do not hesitate to  contact our professional team if you have any questions about company incorporation in Singapore.