3 Steps to Consider When Starting a Business in Singapore

Singapore has been consistently ranked high in the list of best places to do business in the world. This is due to Singapore’s strategic location, its workforce with strong talents, pro-business environment, forward-looking economic policies, and amazing infrastructure. All these factors have enabled Singapore to be the world’s gateway to Asia. However, despite this convenience, many of us still have the question of “how to start a business in Singapore” ringing in our heads.

We’ve listed out the initial steps to take when setting up a business in Singapore and how you can go about them with ease.

Depending on the nature of your business, you would need to decide on the type of business entity to register. In doing so, you’ll need to have a concrete business plan and strategy in place. In answering the question of how to start your own business in Singapore, the first step is understanding the different business structures that are available:

A sole proprietorship business is one run by a single person who has absolute say in the running of said business. It is typically a low-risk business run by an individual.

A partnership business is an enterprise that is formed with a minimum of two persons and a maximum of 20 persons. This type of business is usually made up of professional firms like accountants and lawyers.

In addressing the question of how to start a business in Singapore, it’s important to keep in mind that a limited partnership can consist of two or more partners. One of which is a general partner (GP) and the other a limited partner (LP). There is no limit to the number of partners in this type of business. This type of business requires one partner to bear unlimited risk.

A limited liability partnership is where all partners’ liabilities are generally limited. There is no limit to the number of partners in this type of business. This type of business combines the features of partnerships and companies. Partners are taxed at an individual personal tax rate and are not eligible for tax exemptions available for a company. However, the liabilities of the partners are generally restricted to the capital contributions of the partners.

A private company has 50 members or fewer, while a public company can have more than 50 members. This type of corporate structure is the most popular option as it is the most flexible and advanced.

It provides the owners of the company with downside risk protection restricted to their share capital contributions. Being a separate legal entity, the company’s profits will be taxed in its own name instead of the owners and the after-tax profits can be distributed to the shareholders/owners as dividends (which are taxed exempted in Singapore). Once you’ve selected your business entity, the next step is to register its name with the Accounting & Corporate Regulatory Authority (ACRA).

In answering the question of how to start a business in Singapore, the stage of the company setup is absolutely crucial. An enterprise must comply with the laws under ACRA and the Inland Revenue Authority of Singapore (IRAS). Some startups choose to engage professional services at this stage to maximise their chances of success down the road and avoid unnecessary pitfalls as the business grows.

Here are some of the factors to fulfil under this important step in setting up a business in Singapore:

You’re almost at the end of answering the question of how to start a business in Singapore. Before applying for company registration with ACRA, here are the important documents to get ready:

Once these documents are ready, you can officially register your business with ACRA. The process of setting up a business in Singapore involves an online registration which would take less than an hour to complete. If your business needs to be referred to a government agency for further vetting, the approval process can take a few weeks.

Alternatively, you can engage the services of professionals like ours to help with your business set-up, company registration and other advice you may need regarding Singapore tax structure. Click here to find out more.

Following official registration approval, you can proceed to open a bank account for your enterprise. Some of the popular banks in Singapore are as follows:

1. OCBC
2. UOB
3. DBS
4. Maybank
5. Aspireapp

Other processes that could be part of answering how to start a business in Singapore may include the following:

• Licenses and permits
• Registered office hours
• Enterprise registration number
• Customs registration
• Good and Services Tax (GST) registration
• Registration with Singapore Central Provident Fund (CPF)
• Employment pass

A large part of managing your own business involves being on top of all existing tax laws, regulation trends, and key issues. To help laser focus on their business goals, many business owners look to professional services for corporate tax compliance and advisory. The battle, then, is half won in setting up a business in Singapore.