Setting up a business in Singapore
Singapore has gained a reputation for being a conducive environment to start a business. It has a solid legal system, a low tax rate, good infrastructure including telecommunications, and a particularly strong support facility extended to entrepreneurs.
The city-state’s ongoing rivalry with Hong Kong to be the Asian capital of finance has also encouraged a regulatory environment which not only promotes new local financial businesses, but also facilitates international startups of any description.
So, whether you are a domestic or global entrepreneur looking to start your business in Singapore, this article is for you:
Step 1a for non-local entrepreneurs: Obtain a Visa
If you are not Singaporean, you will need a visa to be able to live and run your own business in Singapore. There are two visa options for foreigners: i) Global Investor Programme (GIP) and ii) EntrePass.
The Global Investor Programme is facilitated by Contact Singapore. Contact Singapore is an alliance of the Singapore Economic Development Board and the Ministry of Manpower. They engage overseas Singaporeans and global talent to live, work, and invest in Singapore. Through the Global Investor Programme, it is possible to apply for Singapore Permanent Residence status.
The two types of investment under the Global Investor Programme are to invest in a new business operation, or to invest in a GIP fund that itself invests in Singapore-based companies. For those wanting to set up a business in Singapore, the former type would be applicable. However, the investment amount is not small at S$2.5 million. There are also other qualitative criteria to be met which can be found in the GIP factsheet.
Alternatively, the EntrePass visa scheme also allows entrepreneurs to start and operate a business in Singapore. The EntrePass is valid for up to one year, and can be renewed annually. Under the scheme, the entrepreneur’s immediate family can come to Singapore to live with the entrepreneur. Application is via the Ministry of Manpower.
The requirement when you set up a company using the scheme is that there must be at least S$50,000 in paid-up capital, and you need to maintain a minimum 30% holding of the shares. Additionally, your company needs to meet at least one of the following criteria: 1) it has funding from a government-accredited VC or business angel, 2) it holds intellectual property of some kind, 3) it is involved in research collaboration with A*STAR or a university, 4) it is an incubate at a government-supported incubator.
Step 1b for local entrepreneurs:
As in most countries, in Singapore there are various kinds of business entities. These include: sole proprietorship, partnership, limited partnership, limited liability partnership, local company, foreign company, and public accounting firm.
Therefore, the first step for any entrepreneur is to determine the best entity structure for the business and choose a name. It is advisable to do a search at BizFile+ to ensure that the name is not already taken or reserved. Once that is confirmed, the name of the entity will then need to be approved, and you can register your business.
A registered address for the entity is also a requirement. This cannot be a P.O. Box address. If you wish to use your home address, there are other requirements and regulations that need to be met.
Depending on the type of business to be conducted, there may be additional authorizations and specific licenses required.
Step 2: Registering the business with ACRA
All businesses operating out of Singapore must be registered with the Accounting & Corporate Regulatory Authority (ACRA). The regulation applies even if the business is the Singapore branch of a foreign company. All applications must be submitted online via BizFile+, ACRA’s online company filing and information retrieval system.
A business owner can log in and apply using the SingPass system, or a registered filing agent can do the submission on behalf of the business owner. Non-Singaporeans must engage a registered filing agent to submit the application. The fee for registration is S$315 (excluding filing agent fees).
Within 15 minutes of making full payment, registration of the business will usually be completed. Only if the application needs to be referred to other authorities for approval will it take longer, and this extended period for approval may take between 2 weeks and 2 months, depending on the nature of the business.
Other general requirements for local businesses are summarized as follows:
The business owner (and directors and shareholders) must be at least 18 years old.
The business must have at least one director who is ordinarily resident in Singapore.
Within 6 months from the date of its incorporation, the business must appoint a secretary who resides locally in Singapore, and is not the sole director.
The business must appoint an auditor within 3 months from the date of its incorporation, unless it is exempted from audit requirements.
The business must have minimum paid-up capital of S$1.
Step 3: Commence Business
Once your business is registered with ACRA, you may start conducting business. Congratulations! The final step is to open a corporate bank account in Singapore.
For more information, you may want to refer to ACRA’s How-To Guides.