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Renting a Business Office in Singapore
Renting a business office in Singapore might seem like a daunting task for a small or medium-sized company. The process requires careful financial evaluation of many factors, including office rental Singapore costs, access to resources, projected revenues and target profit margins.
The decision to go forward with a Singapore office will require attention be paid to issues surrounding the office rental Singapore of a suitable property. Location can be a paramount determinant of the business’ ultimate success or failure, especially for companies that deal directly with the public. The process requires judgment and knowledge about the many different business venues on the bustling island of Singapore, an international commercial hub.
Anyone can find an office rental Singapore space if money is no object. However, for companies on a budget, a little research can result in substantial savings. A businessperson new to Singapore must decide where to live, where to set up office, and the proximity of the two. It naturally makes sense to find a spot that suits both purposes –lifestyle and work environment.
In this report, we’ll explore your different rental options in Singapore and explain what you must know to select the best property for your needs.
Serviced Office / Business Centres
Singapore offers fully furnished serviced offices and business centers (SO/BC) that offer a good, low-cost option for a small startup business. Many SO/BCs boast of prestigious addresses and flexible lease terms. Specialized rental companies offer SO/BCs in some of Singapore’s best business districts. These fully equipped offices accommodate one to 10 employees and function well as temporary solutions while a business looks for a long-term property.
- Singapore’s SO/BCs are favoured by startup companies because of their immediate availability, complete furnishings, and a full suite of business amenities, including:
- Mail support
- IT infrastructure
- Internet/telecom connectivity
- Reception services
- Cleaning and maintenance services
- HVAC facilities
- Electricity and lighting
- Food and refreshment services
- Armed security
- All other required utilities
- Leasing an office requires no down payment or long-term capital expenditures. You can specify lease terms that suit your individual needs and that are set on a monthly basis without long-term commitments.
- SO/BCs are very affordable because of shared facilities, such as meeting rooms, conference facilities, copy machines and restrooms. A budget-minded startup can have employees time share a single “hot desk” or terminal link at different times of the day.
- A small business can acquire a prestigious address at a SO/BC among Singapore’s prime locations and grade ‘A’ properties.
- A growing business using an SO/BC can acquire additional space as needed, even if the company expands at an unpredictable rate.
- SO/BCs offer ideal transportation convenience for employees and customers, as most are located in major business areas close to principal highways and MRT stations.
- SO/BCs often charge high rents in return for their flexibility and convenience. In the long-run, you’ll save money by renting a conventional office.
- Shared facilities can create availability conflicts that can inconvenience your schedule.
- Some customers may look down on SO/BCs as refuges for small, unstable companies that want to appear prosperous and successful. Often, the SO/BC might not list small tenants or group them together under a general listing.
Expect to pay between from S$1000 to S$3000 per month for a Singaporean SO/BC rental that accommodates one to four employees, depending on location. You also might be hit up for additional costs of S$20 to S$50 an hour for as-needed facilities such as meeting rooms or conference halls.
Who should opt for Serviced Offices?
Your business is well suited to an SO/BC if it is:
• Seeking a temporary solution while planning to relocate to more suitable premises
• Wanting to impress clients by dazzling them with a high-status business address
• Testing the market for your offerings without worrying about managing a facility
• Requiring additional space on a temporary basis
• Preparing for a sudden change in size
If you are a startup, consultancy, representative office or project team in industries such as insurance, IT or finance, you’ll find many like-minded businesses occupying space in an SO/BC.
Common Lease Agreement Terms & Conditions
Expect a simple and easy to understand SO/BC lease agreement of two to four pages in length that require no stamp duties or legal fees. The agreement explains the standard terms, including:
- Licence – the right to occupy the workspace for a set period
- Licence Fee –the monthly lease payment amount, including due date and method of payment
- Pay-and-Use Service Fee – what you’ll have to pay for additional services, and when and how you have to pay it
- Security Deposit – rules for refunding or withholding the security deposit
- Insurance – the licensee can ensure and be responsible for all goods at the premises, holding the licensor harmless
- Government Charges, Rates and Taxes – fees to be paid by the licensee
- Use and Care of Premises – the licensee’s requirements for maintaining the condition of the leased premises
- Use of Equipment – the terms and conditions for using equipment
- Termination –notice period and other related terms
Payment & Moving In
You can move in and start operating after signing the lease agreement and paying the required security deposit
A conventional rented office in Singapore is usually empty and requires you to provide your own furniture, utilities, IT infrastructure, utilities, staffing and other necessities. It can take a long time to find the right building and setting up a conventional lease. However, if your company has a predictable growth rate and has more than a handful of employee, you’ll probably save money in the long run by using a conventional office. You’ll enjoy rents lower than those at an SO/BC, even though the private office lease may initially require substantial capital expenditures.
- You can customize the space to your heart’s content.
- You can arrange a longer lease period with predictable rent increases and even predetermined renewal terms. In this way, you avoid the disruption of moving to new premises.
- Singapore offers many desirable private-lease locations and buildings beyond SO/BCs, which tend to concentrate in only prime, expensive locations.
- Beginning costs are higher but running costs are lower.
- If you don’t deal with the public at your office, you can keep it bare-bones to save money.
- In Singapore, you need to commit to at least a two-year lease for private office space, which may be a commitment that you don’t want to make.
- Initial costs will probably be high
- You might be saddled with space that doesn’t conform to your changing staff levels
- You must add all amenities yourself, including reception, phone answering, mail handling, utilities services, IT setup and ongoing maintenance, office housekeeping and whatever else you need.
Prepare to allocate sufficient time to arrange conventional leased office space in Singapore. Your landlord might be a private company or the government. The government leases are cheaper but the properties are more likely to be located in the sticks.
The correct term in Singapore is “gross rent.” You pay gross rent monthly, based on your square footage. You’ll be socked with a 7 percent goods and services tax (GST) if the landlord is GST-registered. .Then there are service charges ranging from S$0.75 to S$1.20 per square foot. The landlord collects these to manage the property with amenities such as air conditioning during work hours, maintenance, repairs and security. The lease-specified service charge can change before the lease is up if the landlord decides he needs more money to manage the property.
Private-Owned Commercial Buildings
Singapore has plenty of private-owned commercial buildings all over the island, including the very best locations. The building’s age and location helps determine the rent. It’s a good idea to use an agent to help you select a commercial building and negotiate the lease.
Government-Owned Commercial Buildings
Jurong Town Corporation (JTC) of Singapore leases a wide variety of government-owned premises for office or factory space. The types of government-owned commercial buildings include:
- stack-up factories
- technopreneur centres
- incubators for start-up companies
- business parks
- hubs for research & development and entrepreneurial activities
- warehousing space
- industry clusters such as the Jurong Island chemicals hub
- wafer fabrication parks
- advanced display park
- two biomedical parks
- logistics hubs for aerospace
- chemical and drug storage
- general warehousing industries
- dedicated food factories
In Singapore, if you don’t need a high-profile central location, renting an office in a government-owned premise is the way to go.
Renting Office – Should You Hire a Property Agent?
With all of the allures of Singapore competing for your attention, the last thing you want to do is waste time in the mind-numbing tedium of picking out office space. That’s why you hire property agents. For example, let them spend their time working the office market to track available spaces and rents while you investigate the island’s wonderful golfing facilities.
These expert local agents have the know-how to help you land a great deal for the right space. Property consultants are different from you — they like working the mundane tasks of office hunting, leaving you more time to pursue normal activities. The agent absolutely lives and breathes office leasing issues, including finding the perfect property, nailing down a great deal that will make you happy, handling all the confusing paperwork and seeing to the other technical requirements of leasing.
An SO/BC virtual office is a real space-saver. You enjoy a lifelike office experience without physical dimension — just a business address, telephone answering, dedicated phone/fax numbers, mail handling and the use of private offices/meetings rooms/secretarial services when needed.
With a virtual office, you pay as you go for the services you actually use, like a lifelike personalized answering service or a virtual receptionist. You can save a ton of money this way until you’re ready to go real. Virtual office rental make sense for:
- Entrepreneurs who want to make believe they have a business presence in Singapore
- Stay-at-home entrepreneurs who need a separate business address
- Small startups that are ashamed of their real offices and want a business address at a grandiose location to project a respectable corporate image
- Small cash-only businesses that may have to get out of Singapore on a moment’s notice
It’s not too bright to set up a virtual office if you frequently have to meet with real people. Imagine a potential customer’s surprise, not to mention alarm, as she walks into an SO/BC looking for your “office” only to find out it is all make-believe. Also, the government requires real premises when you apply for licenses because it likes to keep an eye on where your company staff is supposedly working.
In Singapore, you’ll have to shell out from S$300 to S$2,400 a year for a virtual office rental package, depending on the “location” and the actual services used.
If your business is puny, why not work from home? It’s a great choice for individual entrepreneurs, consultants, real estate agents, importers, lawyers and company employees who don’t ever want to leave home. Unless you wind up on the Singapore’s Home Office Scheme Blacklist, you can run a tiny business from a private or HDB property.
Of course, to run a home office, you need a home, either as an owner, tenant or authorized guest. In the government’s unique mode of expression, home offices are “premises used by its occupants primarily for residential purposes with part or parts of the premises being used by the occupants as an office.” No more than two consenting adults who are not residents of the premises can work in a home office there.
To work from home, you have to register with the Housing & Development Board (for HDB premises) or Urban Redevelopment Authority (for private premises). You must ensure that your business doesn’t make sudden loud noises or other annoyances that might disturb neighbours. This means you:
- Don’t generate smoke, noise, odors, vibrations or other forms of pollution
- Can’t have more than two people who don’t live there plying their trade
- Can’t display external signboards, advertisements or other forms of visual rudeness
For example, you can’t cater food, run a commercial school, or operate on-demand maid procurement from HDB residential premises.
Nothing is more important for a Singapore startup than renting an office. Stupid decisions made in haste will cost you dearly, so it makes sense to take your time and learn the ropes. That way, you’ll have suitable premises for a long time. Figure out what type of office you want before renting it. Also, pick the location you want before moving in. If the one you want isn’t available, remember that, in Singapore, there is always another fish in the sea. And don’t go just by rent, because a great location may require you to pay through the nose. Lastly, don’t let the lessor act as a petty dictator — stand up for your rights!