This post is also available in: 简体中文 (Chinese (Simplified))
Beginner’s Guide on Starting a Software Development Business in Singapore
Why is starting a software development business in Singapore a great idea? Well, it’s because of the demand in the country, which has essentially increased even further after the COVID-19 pandemic. Every company has been digitizing its operations to compete, and to make work easier for their employees.
Ranked 1st in 2014 World Digital Competitiveness by IMD, Singapore has been making a lasting impression in the field of technology. The Lion City ranked 1st in the World Economic Forum’s Networked Readiness Index in 2016. 6th in Global Cybersecurity Index in 2015 by the UN Telecommunication Union. This has led Singapore to become the second most digitally competitive country globally, second to the United States.
If you have always been passionate about IT and want to use your skills to commercialise it, this is that opportunity to jump into! Starting a software development business in Singapore is a straightforward process. This article will explain the basics of industry practice, business registration process, licensure and permits. Plus, we’ll be letting you in on where to find quality and reliable help!
If done right, you might have just given your business a solid foundation. Also, you can read additional information on our guide to company registration in Singapore here!
What is a Software Development Business?
Software development businesses are essentially responsible for the design, development, and maintenance of computer applications. These businesses put much of their resources into specifying, designing, conceiving, programming, documenting, testing, and bug fixing. The public, institutions and corporations can then buy the software for their own use. As IT increasingly permeates the fabric of society, there will be more demands for software and applications in Singapore.
Singapore aspires to become a Smart Nation and recognises the IT industry as an important economic pillar. Therefore, adapting and embracing digitisation will be part of the process, and so far, Singapore has the ideal climate. With a pro-business environment, existing connectivity, and excellent infrastructure, setting up here holds much potential and promise.
Before proceeding with starting a software development business, here are some considerations. Perhaps the most prudent thing to do would be to research several topics. This includes things like the state of the local industries, types of services and products, and other details. Apart from that, familiarising yourself with the local industry can help you form strategic decisions. However, if you prefer to have assistance navigating through your entrepreneurial journey, you can use the local company incorporation services.
Making Your Break in the Software Development Business
You would be correct in assuming that there is a process behind setting up a company. There are generally two ways to start. First things first, you will need to choose your business type. You may choose among a private limited company, sole proprietorship and limited liability partnership. Different types of businesses have different requirements, but the process is similar in many ways. You will need to officially register with the Accounting and Corporate Regulatory Authority (ACRA) to run your company legally.
Before registration, it may be wise to decide upon some details about the nature of your business. Aside from that, it is vital to establish several details in your business, such as information about owners, members, partners, initial investment, liability, funding, and income tax rates. Deciding on each one would require much consideration, given that each business entity possesses distinct requirements and features.
These differences can extend to aspects related to taxation, organisation of company and liabilities. More information may warrant further consideration depending on the type of business. In hindsight, much of these details may have additional specific features, requirements, and conditions that require reviewing. It would be wise to decide on clearly outlining these details before registration. You may engage in the process manually on your own, consult a lawyer or enlist assistance from corporate service providers.
What is the Registration Process for Starting a Software Development Business?
First, you need to select a name that doesn’t contradict existing company names or contain misleading or inappropriate language. Also, keep in mind that the name you choose is not trademarked as well.
Next, the company’s Articles of Association requires drafting, notarising, and filing to the ACRA. It is also important to seek out relevant tax authorities in Singapore in registering for GST and taxation. It may be wise to consult a tax expert to maximise benefits and deductions fully. Upon fulfilling these requirements, incorporating your company can now begin!
Incorporation can be done in two ways: directly through the government or by a company incorporation services provider. The first requires you to visit a government-run online portal known as Singapore Bizfile and comply with the stated instructions. Regardless of which you choose, you will need to produce the following documents.
Required documents include:
- Company name.
- Description of business activities.
- Directorial and shareholder information.
- Registered address and company secretary details.
The memorandum and articles of association of the company will also be required. Finally, you will have to select the desired business structure for your company. Upon completion, it will take three working days (may vary), and if successful, a Unique Entity Number will be issued. This number will become an identifying or reference number that will be used in many formal affairs.
License and Permits You Will Be Needing
Part of starting a software development business in Singapore also means obtaining specific licenses. For this next step, the authority or regulating body of interest is the Infocomm Media Authority of Singapore. Issuing this permit is by the government of Singapore as a sign of approval for the running of a particular business.
The type of licenses required will depend on the kind of services and products offered by a company. The process of applying for a permit can take anywhere from two weeks to two months, depending on the type. Consecutively, it may be best to consult with a lawyer or a company incorporation services provider for this part. You can also contact your local municipal office and double-check with them on the licenses you may need. Remember, obtaining the appropriate licence is a statutory requirement.
Post-Registration Formalities you Should Know
Upon successful registration, a certificate of incorporation, company business profile and company stamps can be accessible. Depending on the type of company formed, the first board resolution between shareholders must take place. In conjunction with this, it is also appropriate to issue shareholding certificates to shareholders. Statutory compliance is also not a one-time obligation but requires consistent maintenance. To keep the company running and by the law, continuously ensuring compliance is necessary. Accounting requirements, AGM’s, annual returns filing, and corporate tax filing are absolute musts. Statutory compliance is essential to avoid potential penalties.
If you are a foreign citizen, you will need to employ a local director, a Singaporean, a permanent resident or via EntrePass. Second, you can approach and hire a registered filing agent or firm to help you. If you are not relocating to Singapore, you will need to appoint a nominee director. Alternatively, if you are relocating, you will need a work visa. Consult with your filing agent or firm to determine which visas work best. Interestingly, employment pass holders can also register companies in Singapore and can own up to 100% of shares. However, they need to hire a local or resident director after setting up the company.
There are also some additional fees to be aware of. The ACRA charges S$15 for company name applications and S$300 for company registration. There may also be other fees along the road. Therefore, it would be wise to reserve some funds.
How We Can Be of Service
Singapore has consistently proven itself to house one of the best investment climates in the world. With its pro-business environment, competitive market and talented workforce, setting up a business here can be a lucrative and exciting venture. Starting a software development business in Singapore is a direct process, though not necessarily hassle-free. With preparation and the right assistance, much of it can be relatively painless.
You can alternatively have a firm do the registration, incorporation, legal thinking, corporate management and more for you. This is where we can help you! We are 3E Accounting, an internationally recognised corporate services provider in Singapore that complies with government standards. Our team of multidisciplinary experts are ever ready to help you navigate the corporate industry at a cost-effective rate. We offer a wide selection of services backed by the uncompromising assurance of quality and high standards. To find out more, contact 3E Accounting today!