Fundamentals of Starting a Business in Singapore for Foreigners
Thinking of starting a business in Singapore? It’s actually possible for foreigners too!
Singapore is widely known as the world’s fourth leading financial centre, so it’s no surprise that foreigners everyday are creating or incorporating their businesses in Singapore. Additionally, Singapore has the third highest per capita income in the world and it’s largely considered corruption free, as compared to other developed countries.
Owning a company in Singapore is much easier compared to many countries that are considered as business hubs, even for foreigners. It takes only one day to complete the proper requirements and submit the application. Many companies in Singapore even offer online systems for incorporation where you can submit your application via the internet. Still, while starting a business in Singapore, you must of course determine your goals and plans to achieve them with your business – this is true for both foreigners and locals.
1) Create a Business Plan (mentally and on paper)
The first step in starting a business in Singapore for foreigners involves converting your ideas into a business plan. Always keep in mind how these plans will help you generate more dollars than you spend. Do your research and talk to people in niche groups to find out more about your target market for investment. Question and analyze whether or not your product or service is needed there. Can you make any changes? Additionally, it is essential that you have a team behind you to help you in your endeavors. Finding the right people to work with you and support you on this journey can greatly benefit the future of your company.
2) Determine the Business Structure
The next step in starting a business involves choosing your business structure. Singapore offers several legal entity forms available for registration of your company for locals and foreigners. These include sole proprietorship, partnership, limited liability company, subsidiary, branch office, representative office, and the like. It’s important to choose based on your company ability. For example, sole proprietorship works best for small businesses with minimal risk of law entanglements. Partnerships are best for people looking to share their business with a partner. Still, many consider the private limited company to be the best option for a new company in Singapore, as it limits the owner’s liability to the company assets. However, one director must either be Singaporean or a Permanent Resident (PR).
Making this decision is much easier with the help of an incorporation agency that can point you in the direction of incorporation packages. Some packages appoint a nominee director or even provide secretary services.
3) Select a Business name
Next, choosing the most appropriate and unique name for your future company is a necessary part of starting a business. The government in Singapore requires that companies name their business – even for foreigners. There are a few things you need to watch out for. The name must represent the philosophy of your business and it cannot sound similar to names of other existing companies. Try making a name check prior to registration to avoid issues and delays. Foreigners should also keep in mind the cultural differences between their home country and Singapore when choosing a name. What is an attractive name in one country might be a less popular in another.
4) Register for a Local Address
Singapore law also requires that registered businesses provide a local Singaporean address. This address, where you rent premises, serves as the only mailing address for all official documentation. You must comply with the requirements set by the Urban Redevelopment Authority (URA) and seek their approval to use the premises in a commercial way. Then, depending on your business and number of employees, you determine whether you need to rent an office, flat, co-working space, or the like. There are a lot of existing options, and many entrepreneurs opt to consult an incorporation service provider for advice. Most incorporation service providers offer free consultations to assess your business.
5) Acquire Business Licenses
Starting a business in Singapore requires mandatory licensing especially for foreigners. However, you only receive the necessary license once your company has incorporated (registered by the Accounting and Corporate Regulatory Authority, or ACRA). Therefore, it’s often best to study the legal field in advance to avoid any future law problems. You may need several licenses from different authorities if you plan on operating in the finance, entertainment, education, or other industries. We recommend that you refer to Singapore’s Online Business License Service (OBLS) for information regarding specific licenses and requirements.
6) Solve the Visa Situation
Every member of your team operating in Singapore will need a visa. Professionals, managers and executives (directors) qualify to work in Singapore under the Employment Pass. The Employment Pass is valid for 1-2 years, and thereafter renewable so long as the individual still meets the requirements. However, directors can only use the Employment Pass after the business registration process is completed. Should you need to arrive in Singapore prior to incorporating, consider the EntrePass. Therefore, it’s a good idea to involve a one-stop-shop incorporation service. This allows you to deal with incorporation paperwork, visa issues, and more all in one place. They can also develop a strategy for your company incorporation and employee relocation in accordance with the ACRA and the Ministry of Manpower.
7) Register Your Business!
When everything is ready – from your ideas, plans and paperwork – you can register your business! You may use BizFile or entrust this matter to a professional incorporation company in Singapore. Remember to double check all of your paperwork and deadlines so ensure that you are consistent and on time.
If you’re interested in starting a business in Singapore and have questions regarding the process or legal procedures for foreigners, feel free to reach out to our team at [email protected] Or, if you’re ready to incorporate your company today, consider using one of our bundle packages, which include everything you’ll need to register!