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A Comprehensive Guideline for Foreigners to Start a Business in Singapore
Singapore, or often called as Switzerland of Asia, is very well known to the world as one of the top-notch financial hubs with its surging economy. Highly urbanized, Singapore attracts foreign investors with its strong currency, vibrant investment climate, government-backed business environment as well as the almost corruption-free political reputation. Ranked second in the ease of doing business in the world in 2016, the Singaporean government has always adopted a pro-business policy like reducing corporate tax rates as well as introducing attractive tax incentives to boost the country’s economic performance.
Singapore has gained its traction as one of the most-preferred investment hotspots in Asia as well as the world. Many foreigners prefer Singapore over other countries to start their business (or work) in the country. However, starting a business in Singapore has more to do than just having a good business plan and the sufficient funds. When it comes to starting a business in the country, foreign investors should remember and oblige the proper protocols to avoid any unwanted run-ins with the law. Hence, it is necessary for foreigners to have a guideline about the ins and outs of doing business in Singapore.
Before Everything Starts
1. Apply for an Employment Pass (E Pass) and Entrepreneur Pass (EntrePass)
An Employment Pass or Entrepreneur Pass from the Ministry of Manpower (MOM) is compulsory for a foreigner who would like to be present in Singapore to manage his or her business operations
Certain basic requirements include:
- The business must be legal: the company must be registered as a Private Limited Company
- The company needs to have at least SGD$50,000 of paid-up capital.
Please note that businesses like food courts, massage parlours, employment agencies and so forth do not meet the basic requirements for the application of an EntrePass. Although the E Pass and EntrePass are meant for foreign professionals and entrepreneurs, there are some differences between these two passes based on the applicant’s requirements and needs.
A valid Employment Pass or EntrePass is not required if a foreigner does not intend to stay in Singapore to administer his or her company. However, it is mandatory to appoint at least one locally resident director at the point of incorporation. In this case, one must appoint the services of a professional to file the application online.
2. Get a SingPass (Singapore Personal Access)
In Singapore, one is eligible to apply for a SingPass (“SingPass” stands for “Singapore Personal Access” , it is a password that enables Singapore residents to access and perform online transaction with more than 200 e-government services) if he or she is included in one of these groups:
- Singapore Citizen and Permanent Resident
- Employment Pass and Personalised Employment Pass holders
- EntrePass holders
- S-Pass holders
- Dependant Pass holders (of EP, PEP, EntrePass and S-Pass holders)
Also, he or she will be able to carry out the required endorsements via BizFile (BizFile is ACRA (Accounting and Corporate Regulatory Authority)‘s online filing system).
Starting the Business in Singapore
Here’s the complete guideline about how to setup a business in Singapore.
Foreigners are eligible to register for sole-proprietorships in Singapore, just that they need to appoint an authorized representative (who is ordinarily resident in Singapore) whilst they reside outside of Singapore. Ordinary residents here mean Singapore citizens, Permanent Residents and EntrePass holders (one will need to apply for an EntrePass on the MOM website to set up his or her sole-proprietorship if he or she will reside in Singapore and run the business).
The other registration processes include naming the business, deciding business location and address, as well as completing the entire form on BizFile using SingPass (one will have to engage the services of a registered filing agent such as a law firm to fill out the application for him or her if he or she does not have a SingPass).
Foreigners can also register partnerships in Singapore if one of the partners is ordinarily resident in Singapore. In the case that all partners are foreigners, the appointment of an authorized representative (who is ordinarily resident in Singapore) is required for the company registration.
For foreigners, setting up a company in Singapore involves some tedious and time-consuming process. However, it is still easy if compared with its peers.
To sum up, there are 2 types situation when a foreigner wishes to setup a company in Singapore:
If a foreigner is setting up a local company in Singapore, the incorporation process is the same as that for a locally-incorporated company, just that he or she needs to appoint an local resident director (who is ordinarily resident in Singapore) whilst he or she resides outside of Singapore. Also, an EntrePass with MOM is a must if he or she wishes to reside in Singapore to administer the company’s operations.
On a final note, Singapore is definitely one of the investment hotspots in Asia where foreigners can do business easily in this country. If you are planning to venture into Singapore’s market, 3E Accounting is able to assist you in the company incorporation, with additional steps such as appointing nominee director, or applying for an Employment Pass or EntrePass so that you can be in Singapore to manage the business yourselves.