What you need to know to set up a business in Singapore
Singapore has consistently been ranked one of the top 10 countries in the world to do business. In a ranking of 190 economies in 2018, Singapore was ranked No. 2 in the world by the World Bank, just after New Zealand for ease of doing business. Despite global tensions and the current global Covid-19 pandemic, Singapore remains a top investment destination for the long term, according to Manulife Asset Management.
While Singapore’s business-friendly environment makes it attractive for any would-be entrepreneur, here are some details that you should take note of before starting a business.
1. Business Entity
Getting your business registered with the Accounting and Corporate Regulatory Authority (ACRA) is the first step in starting up your business. You need to decide on the kind of business structure that is appropriate for your venture. While a sole proprietorship may be the easiest and cheapest option available, the greatest downside is that the business and the individual are regarded as a single entity – this means that a sole proprietor is accountable for all liabilities and risks incurred by the business.
Most businesses are registered as private limited entities, and registering as a company is definitely a better option to minimize your risk exposures and personal liabilities.
Once your company has been duly organized and registered, you can then proceed to apply for permits (if required), and begin hiring employees.
2. Obtain Necessary Permits
You need to do research to find out what permits or licenses you would need to obtain in order to carry out your intended business activities. You can actually find the relevant information easily via the EnterpriseSG website, a service provided by the Singapore government. You can also find out about various government grants that you can take advantage of for your new business via the EnterpriseSG website.
3. Office Premises
Siting your business is another consideration: do you work from home, find an office space, or rent space from service offices and co-working spaces?
Working from home to save costs is an option especially for sole proprietorships or small companies that have less than five staff: you can take advantage of technology solutions to plan and run your operations with employees working from home, including video conferencing, cloud-based customer relationship management (CRM), file sharing and other productivity software. You do need to note that while you are allowed to use your home address for business registration with ACRA, business activities carried out in residential property, particularly Housing Board Development (HDB) flats, must be administrative in nature.
If you see your business growing, you may consider moving to a designated office location. Rentals for commercial spaces are high in Singapore, which is why many start-ups in the growth phase consider renting spaces with serviced or co-working offices.
There are also a number of solutions provided at various business parks for businesses with industrial or manufacturing activities, so you should not face any problems finding an appropriate space for your company.
Hiring qualified and well-trained people for your business is easy in Singapore, thanks to a high literacy rate and lifelong learning programmes provided by the Workforce Singapore (WSG). WSG also provides a job bank that makes it easy for companies to search for and recruit employees.
We do recommend that you familiarize yourself with your responsibilities as an employer as spelt out in the Employment Act. Important information to note include: salary payment arrangements, medical leave, rest days, medical insurance coverage, and mandatory Central Provident Fund (CPF) contributions for Singaporean citizens and Singapore permanent residents (SPRs) who are working in Singapore under a contract of service (includes permanent, part-time or casual basis).
5. File Relevant Taxes
Foreigners who are thinking of starting a new business in Singapore will be relieved to know that the country has detailed agreements for Avoidance of Double Taxation with more than 73 countries, with unilateral tax credit with countries it does not have such agreements with. Entrepreneurs therefore are expected to pay their taxes on time; you can hire the services of tax consultants so that you can better manage your business tax obligations.
Starting up a business is easy in Singapore, and the country’s geographical location coupled with political and economic stability makes it a highly attractive destination for entrepreneurs and investors. Entrepreneurship can be both exciting and daunting for many new business owners, which is why it is important to ensure you start off on the right footing. Learn more about how FidCorp’s Incorporation Services can help you set up your Singapore-registered company in a hassle-free way today.