Full Guide on Starting a Business in Singapore

There are many benefits to setting up a business in Singapore. Namely, the country boasts a robust economy, low tax rates and a smooth (albeit strict) process for incorporating a company.

Singapore's infrastructure is world-class, its workforce well-trained and few rules limiting foreign ownership and operation of a business in Singapore.

Once you're set up here, you can access Singapore's well-developed capital markets to access loans and other financial services. And should you choose to move here, you will enjoy a very high quality of life.

Not all businesses are required to register with The Accounting and Corporate Regulatory Authority (ACRA).

If you operate under your full name, for example, you are a sole proprietor. There is no need to register with ACRA. The same is true if you are in a partnership and you trade your full names.

The same exemptions exist for:

• Institutions, authorities, persons or funds that are tax-exempt (as identified by Singapore's government).
• Societies or co-operatives registered as such with the government agencies.
• Mutual benefit organisations.
• Trade unions.

If you’re unsure about whether your exempt from company registration, it’s worth double-checking. Singapore company registration is strictly monitored, and you could face a fine (or even jail-time).

Osome can help you unpick Singapore’s registration requirements.

This can take time. But by planning ahead, you can speed up the company registration process and avoid delays.

Make sure you’re ready

To set up a business is one thing. To know why is another. Be prepared for bumps and scrapes along the road as you start your business journey in Singapore.

When things get tough, knowing why you have started a business is a powerful motivator. There is complexity and risk attached to being a business owner. Do you understand the long term challenges?

Before diving into the admin of registering a business, be clear on the what and why of your business. It means you can hit the ground running.

Raise capital

The barrier to entry for business registration in Singapore is low. As in S$1 low. A Singapore company can be registered with paid-up capital of S$1 (or an equivalent in any currency).

Most Singaporean companies incorporate with this nominal value. That said, higher capital is, of course, better and will add to your company’s prestige.

Singapore’s funding infrastructure is highly developed. You can issue shares, get loans, receive investment from VCs, or you can bootstrap your business.

Not enough savings? Here are some ways to increase your capital:

1 Fundraising

A common way to raise funds is by issuing shares in your business. As a limited company, you will be able to do this. Although, it means handing over a stake in your business.

2 Government Schemes

Singapore's government encourages startup and SME growth through various schemes. Three big ones are the Productivity Solutions Grant (PSG), the Enterprise Development Grant (EDG) and the PACT Scheme.

3 Venture Capital and Angel Investors

Singapore is home to a well-established venture capital (VC) and angel investment network. The country boasts numerous well-established VC funds, and angel investors are common. Try pitching your big idea to one of these players.

4 Family and Friends

You might be surprised how much capital friends and family have to invest in new ventures. Ask around. Many people will be sitting on substantial savings and be willing to invest in a new idea.

5 Loans

Debt funding is a staple of starting up. In Singapore, banks offer two kinds of loan: working capital loans and funding. A working capital loan is to help with tight cash flow, while funding is for long-term investment.

6 Peer-to-peer lending

Peer-to-peer (P2P) lending is an excellent option if you can't access bank finance. P2P platforms connect the public with businesses in need of funding. Singapore has numerous P2P marketplaces, and it's a well-established industry.

Singapore workers enjoy extensive protection by the Employment Act. Part IV of the Act outlines the rest days, hours of work, and other conditions of service.Singapore workers enjoy extensive protection by the Employment Act. Part IV of the Act outlines the rest days, hours of work, and other conditions of service.

1 Business structure

Private Limited Company

A private limited company is the most common type of business entity for serious entrepreneurs. As a separate legal entity, a private limited company limits your liability, makes it easier to raise finance and gives your business credibility.

Sole Proprietorship

Sole proprietors trade under their own name. These people do not need to register, and tax is simpler. However, liability is unlimited, as the person and the company are not separate legal entities in this business structure.

Partnership

A partnership, including a limited liability partnership, lets two or more people co-own a business. Unlike a private limited company, this type of business structure is not a separate legal entity, so there is no legal distinction between people and business. And a partner can end the partnership at any time.

2 Activity Type

The Singaporean authorities need to know what industry you’re in. It’s not enough to just tell them. There is a specific code (an SSIC or a Singapore Standard Industrial Classification Code) for different industries.

ACRA will ask you to pick and submit a SSIC code. This code will tell them what you do and what industry you operate in. Not sure what SSIC code you are? Use our SSIC code checker!

4 Registered business address

Every Singaporean legal entity must have a registered address. This can’t be a PO box. It needs to be an actual address.

If you don’t have a permanent HQ, you can rent a registered address. Singapore has a wealth of companies offering virtual office addresses for entrepreneurs. They collect your correspondence, scan it, and then send it to you.

Any address can be used as a registered address. This includes your home office or even a co-working space.

5 Assemble the team

A business needs people, right? So let’s look at what people you need to start a business in Singapore:

Shareholders

All Singaporean business needs at least one shareholder(with a maximum of 50). There is no limitation on who can be a shareholder. Indeed, Singaporean law allows for complete foreign ownership of Singaporean companies.

Directors

It’s here where resident requirements become a bit more strict. All Singaporean businesses require at least one locally based director. That doesn’t mean ’citizen’, however. This requirement can be met by a legally resident foreigner in Singapore. If you prefer, you can appoint a Nominee Director. A nominee director has no say and is only there to meet the requirements. It’s common practice in Singapore to use the nominee director services, especially for companies with a foreign parent company, as they need to comply with local regulations regarding legal entity status.

Company secretary

Every company is obliged to have this officer. Your company secretary tracks changes in your company compiles papers, and reports to the government. The law demands that you appoint a company secretary within 6 months after the incorporation, but you may need one way earlier. Corporate secretarial services are commonplace in Singapore. If you’re unsure, that’s a good place to start.

6 Paid-up capital

Do you have one Singapore Dollar? Well then, you have enough paid-up capital to set up a business. All Singapore companies have to issue at least one share and, in most cases, S$1 per share is enough.

Paid-up capital can also be in other currencies. You can increase the sum and change the currency any time after your company is incorporated. Obviously, it’s desirable to increase the sum eventually.

But the barrier to entry for starting a company is very low. So don’t let a lack of capital be a complete block to starting your company.

7 Business bank account

Singapore offers entrepreneurs an array of banking options. As a regional finance hub, the country is home to large, legacy banks and new innovators. More established banks may wish to do their KYC checks in person. That is, you will need to come to Singapore.

There are no restrictions on foreigners opening business bank accounts in Singapore. As long as all the correct legal procedure is followed.

Not all banks require you to do KYC in person. Some banks can do that online, if you don’t wish to travel. If you have an adviser in Singapore, ask them for a referral to a bank like this.