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, professional guidance from trusted experts like 3E Accounting makes the process straightforward and efficient.

This guide provides foreigners with a step-by-step roadmap to start a business in Singapore. From obtaining the right working pass and selecting an appropriate business structure to completing the incorporation process in singapore.

 

Why Start a Business in Singapore?

Singapore is one of Asia’s most attractive destinations for entrepreneurs and foreign investors. Its strategic advantages, business-friendly policies, and world-class infrastructure create an ideal environment to start and grow a company. Here’s why Singapore is the preferred choice:

1. Strategic Location
   Situated in Southeast Asia, Singapore is a gateway to major Asian markets, providing businesses with 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.
8. 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?

Before starting a business in Singapore, there are a few important considerations to ensure a smooth incorporation process. Addressing these points early will save time and prevent complications later.

1. Do you have the right working pass?

Foreigners must have the appropriate working pass, such as an Employment Pass (EP) or EntrePass, depending on the nature of their business. If you plan to manage your company without relocating to Singapore, a working pass may not be required. In such cases, you can appoint a local nominee director to meet the company registration requirements.

2. Are you age 18 years and above?

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

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

Setting up a company in Singapore can be complex without expert guidance. Working with a Singaporean company incorporation service provider, such as 3E Accounting (3ecpa), can save you time and effort. Professional assistance ensures that all legal, regulatory, and procedural requirements are met efficiently, allowing you to navigate the process with confidence.

 

How to Incorporate a Company in Singapore?

Incorporating a company in Singapore involves several clear steps, from choosing the right business structure to opening a bank account. Here’s a step-by-step guide for foreigners to set up their business efficiently:

Step 1: Decide Your Business Structure

a) Sole-Proprietorship

• You can set up 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, a Singapore citizen or a permanent resident. 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

• In addition to 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 Company

• 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 in which a foreign parent company can have 100% shareholding. 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 must have 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). As a result, 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 a whole business house.

 

Step 2: Name your business

Choosing the right company name is a critical step. 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:

• Your business name is approved by ACRA.
• You have at least one shareholder.
• At least one director resides in Singapore (citizen, permanent resident, or valid pass holder).
• You have appointed a Company Secretary who is a Singapore resident.
• The company has at least S$1 paid-up capital.
• Your business has a local registered 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 computerises 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.

 

Step 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 for its well-established financial sector. A local bank account is essential for smooth business operations, enabling easy transactions, payroll management, tax compliance, and international trade.

Foreign enterprises can access a comprehensive range of banking solutions, from traditional commercial banks to digital and specialised corporate banking services, to meet the needs of diverse business models and industries. 

 

Step 5: Legal Compliance and Licensing

Foreign business owners must ensure their operations comply with Singapore’s legal and regulatory framework.  Certain industries, such as food and beverage, construction, finance, and education, require specific permits, and even entrepreneurs holding an Employment Pass must ensure they have the appropriate authorisations before starting operations.

Beyond licensing, understanding and adhering to Singapore’s employment regulations, including the Employment Act and the Employment of Foreign Manpower Act (EFMA), is important.

 

Singapore Government Assistance for Foreign-Owned Companies

Foreign-owned companies operating in Singapore can access a variety of government assistance programs, including grants, financing, and residency schemes, provided they are registered locally and meet certain criteria, such as minimum local shareholding (typically 30%). These programs support innovation, productivity, overseas expansion, and business growth.

Key Government Assistance Programs in Singapore:

• Productivity Solutions Grant (PSG) – up to 50% support: Enables adoption of IT solutions, equipment, or consultancy services to enhance business processes. Requires at least 30% local shareholding.
  
• Market Readiness Assistance (MRA) Grant – up to 50% support: Supports SMEs and mid-sized companies in expanding overseas, covering market promotion and business development. Capped at S$100,000 per new market.
  
• Enterprise Development Grant (EDG) – up to 50% support: Funds projects that upgrade business capabilities, drive innovation, or support international expansion.
  
• Enterprise Financing Scheme (EFS): Provides financing for trade, working capital, and mergers & acquisitions.
  
• Global Investor Programme (GIP): Offers permanent residency to eligible investors establishing businesses in Singapore.

For foreign investors, professional assistance from experts like 3E Accounting can ensure every step from incorporation to bank account setup is handled efficiently, compliant with regulations, as per your business needs.