Much has been said and written about the success of the Singaporean economy. But of all the reasons ever mentioned as to how this small country on the tip of the Malay Peninsula became one of the best-performing economies in the world, one definitely stands out: Singapore’s pro-enterprise investment environment certainly contributed much to the nation’s success story.
Indeed, the city-state derives much of its economic mettle from its business-friendly and investor-friendly environment. As a matter of fact, country’s business registration process can be summed up in three fairly simple steps:
- choose a business structure according to the guidelines provided by Singapore’s Accounting and Corporate Regulatory Authority (ACRA);
- register the company with the ACRA, and;
- open a corporate bank account to address the company’s forthcoming financial needs.
Naturally, if you intend to kick off business activities in earnest in the Lion City, you’ll need a little more information than that. To that end, here are five important things you should know about doing business in the country before starting a company in Singapore.
Singapore Offers Attractive Incentives for Setting Up Shop in the Country
First, it’s worth remembering that the Singaporean government actively incentivises new business investments from both locals and foreigners. Even new companies will find themselves on the receiving end of favourable tax incentives and exemptions upon setting up shop.
Startups, for example, are exempted from any tax on their first SGD 100,000 of chargeable income and will further enjoy up to 50% of tax exemptions on their next SGD 200,000 of income for their first three consecutive assessment years. The Inland Revenue Authority of Singapore (IRAS) also offers tax exemption credits through its Productivity and Innovation Credit (PIC) scheme. If you’re based abroad and are considering where you should go next for your business activities, consider Singapore for these reasons.
Foreign Entrepreneurs Must Apply for a Work Visa or Work Pass
Every business registered in Singapore will need at least one director who is a Singaporean citizen, permanent resident, or EntrePass holder. Successfully applying for an EntrePass work pass through Singapore’s Ministry of Manpower will award the pass holder with entry and stay privileges for one year.
For foreign investors who have long-term plans of living in Singapore, there’s the option to apply for a residency-by-investment visa through the Economic Development Board’s (EDB) Global Investor Programme (GIP). Investing SGD 2.5 million in Singapore’s economy will allow the investor and their nuclear family the chance to settle in Singapore as permanent residents, and they’ll be on track to become Singaporean citizens after two years if they so wish. New investors and entrepreneurs who hail from other countries should weigh their options and choose the best pathway to doing business in Singapore.
You Must Determine Your Business Structure in Order to Settle Ownership and Liability Matters
All business entities that will operate in Singapore must be registered under ACRA’s business structure scheme. If you plan to open a business in the country, you must categorise it under one of these structures:
- As a business with either one owner or shared partnership between 2 and 20 business owners, with all owner/s being solely responsible for incurred debts and losses and holding unlimited personal liability.
- As a company with several shareholders who have limited liability, meaning that none are personally liable for the company’s losses or debts.
- As a limited partnership, in which one general partner holds personal liability for debts and losses while the other has only limited liability over the two.
- As a limited liability partnership, comprising at least two partners with limited liability over losses and debts.
Properly categorising your business under one of these structures will allow you to delineate matters of ownership and liability, as well as help you maximise your tax benefits. For more information on ACRA’s business structure scheme, don’t hesitate to reach out to an authorised representative of the agency.
You Must Choose Your Company Name According to ACRA Guidelines
Next, you’ll need to decide on an official business name to register with ACRA. Here are some important notes about finalising your company name:
- The name must be unique and hold relevance to the nature of your business.
- There should be no obscene words or vulgarities in your company name.
- The name should be free of copyright issues and not infringe upon any registered trademarks.
- You should secure additional approval from other business authorities in Singapore if your business name contains words like “Finance,” “Bank,” “Media,” and “Educational.”
If all these requirements are met, it won’t take long for your official business name to be approved. You will need this approval before you secure your final packet of business registration requirements for setting up shop.
Your Paperwork Must Be Complete Before You Register Your Company in Singapore
The last step is to prepare your paperwork for submission to ACRA. It will help to make a checklist of all the requirements you need to pass for your application, including the following:
- Proof of company name registration
- A description of your business activities
- Contact details for your Singapore-registered address
- The particulars of your company directors, shareholders, and company secretary
- A copy of your Singapore ID (for residents and Singaporean citizens) or passport and proof of residential address in another country (for foreigners)
- Memorandum and articles of association (for foreign companies)
Thanks to Singapore’s efficient business registration process, it usually takes only a day and a half for a new company to set up shop with ACRA. It is not uncommon for registrants to be able to complete the process in a matter of hours. The more complete your documentation is, the fewer delays you’ll have when registering your company with the Singaporean government.
Start Your Business in Singapore on the Right Foot
If your registration proceeds as expected, you’ll need to do a few more things to start operating in earnest. First, you should see if you’re required to get any additional business licenses for your particular industry, in which case you can apply and pay for them through Singapore’s business license and permit hub LicenceOne.
Second, you’ll need to build your business network for labour, secretarial services, and financial services like auditing and accounting. For starters, you can tap into resources like EDB’s Connections Concierge; the aforementioned service can give you leads on accounting and taxation solutions, legal and market entry advisories, and recruitment of Singaporean talent among others.
Pursue your entrepreneurial dreams and start your business journey in Singapore. A wealth of new business opportunities awaits you here!
