How to Start Your Business in Singapore
It is a known fact that Singapore is one of the important economic powerhouses, in both Asia and the world. Despite its small size, Singapore’s robust economy makes it easy for local and international businesses to make their mark. As Singaporean economy continues to grow, Singapore is attracting people to start their business in the country.
How to start a business in Singapore and what business to start
1. Do the market research and draft the business
Though this sounds old-schooled, this is the golden rule of every business. Before you get down to the business, do the market research and understand the business environment in Singapore. The next step is to materialise your small business ideas into a business plan – an important step to help you plan for the best business to start and prepare for the worst. Of course, you need to start your talent hunt to build up your team with small business ideas.
Like many other jurisdictions, Singapore has a few different types of business structure available:
- a. Sole Proprietorship
- b. Partnership
- c. Company (private limited)
- d. Limited Liability Partnership
- e. Limited Partnership
While entrepreneurs can decide which business structure suits their business ideas, the private limited company is the most popular business structure in Singapore. A majority of privately incorporated Singaporean businesses register themselves as private limited companies before they know what business to start. On top of the advantages of running a business as a private limited company, tax saving is one of the reasons that make the cut. The private limited company in Singapore is a tax saving business entity. Apart from that, there is no capital gains tax in Singapore. As a country that follows a single-tier tax policy, the distribution of dividends is thus tax-free once the income has been taxed at the corporate level.
Your business name is more than just a name – it also represents your brand and marketing strategy. Therefore, choosing a good name is as important as deciding your business structure. One of the best ways to start the naming process is to go back to the basics – think about your business’s type, how do you define yourself, and what do you want to achieve and what is the best business to start. The following step is to run a name check (to determine the availability of your proposed business name) and register with Accounting and Corporate Regulatory Authority (“ACRA”).
4. Scout for business premises
A good location translates into foot traffic to your business. Let us put it this way – how would you wish to locate your business to meet your potential/target customers? Like the business naming process, the selection of location depends on the business type and business goal.
The Singaporean government enacts Singapore Companies Act to govern the private limited company where companies must also comply with its laws under ACRA and the Inland Revenue Authority of Singapore (“IRAS”).
- Basic requirements
- Must have the ACRA-approved company name
- Must have at least one shareholder
A private limited company in Singapore can have only one shareholder and the maximum number is 50 shareholders. 100% local or foreign ownership are allowed in Singapore.
- At least one director is residing in Singapore.It is a mandatory requirement that one of the directors must be either a Singapore citizen, or a Permanent Resident, or a person holding an EntrePass, Employment Pass, or Dependent Pass. Another mandatory requirement is that the directors must be at least 18 years old, cannot be a bankruptcy, or have been convicted of any malpractice in the past. In the case that the company do not know anyone from Singapore can be the director of his company, he can opt to appoint one Nominee Director.
- Must have one Company Secretary who is a Singapore’s resident.
- At least S$1 of paid-up capital needed
- Must have a local address as the registered company address
- Documents needed for company registration (as required by ACRA)
- Company Name
- Short description of business activities
- Details of shareholder(s)
- Details of director(s)
- Details of company secretary
- Registered Address
- Company Constitution
- Company registration process
In Singapore, the company registration’s procedures are fully computerized by ACRA and a company can be incorporated within 2 days. To register a business, you can choose to either do it yourself by logging in BizFile (using your identification number and SingPass) or engage the services of a registered filing agent (for example a law firm, accounting firm, or corporate secretarial firm). A newly incorporated Singaporean company can buy a Business Profile from ACRA. The said profile is actually an electronic report carries details related to your business, including:
- registration number (UEN),
- date of registration,
- shareholders etc.
An entrepreneur will need this profile for bank account opening, licences application and so on.
After the company incorporation process, you can now proceed to open a bank account in Singapore.
After reading this, you might get a clearer picture of how to start a business in Singapore. However, we understand the road ahead might be rocky and we are here ready to help. Contact us to get to know our company incorporation services and much, much more!