How to Start a Business in Singapore: A Step-by-Step Guide for Foreigners
Singapore ranks as the fourth most favorite investment hub in the world after the U.S., China, and Hong Kong. There are about 7,000 foreign multinational companies and over 10,000 foreign SMEs, based in Singapore as of 2019. This is because Singapore is considered Asia’s powerhouse with a brilliant and lucrative future.
Would you like to invest in Singapore? There is a strict process to follow. Here is a comprehensive guide for foreigners.
First: Meet All Basic Requirements
Singapore is particular about who can set up a company here. There are several basic requirements that every applicant should meet:
- Working Pass
Every foreigner working in Singapore, at whichever level, should have the right working pass. There are several working passes designed for applicants in different lines of work. In this case, however, you will need an Entrepreneur Pass. This is the only work visa that you can use to set up a locally-incorporated company.
However, you can still run your business without relocating to Singapore without the Entrepreneur Pass. Alternatively, you can appoint a local nominee director to register the company on your behalf.
As mentioned, Singapore has strict laws governing local companies. As such, setting up your company can be daunting, especially for foreigners who are not familiar with local laws. As such, you may be required to solicit the services of a company incorporation service provider to guide you through the process. This is not obligatory, but it is prudent as it will save you a lot of effort, time, and money.
- Legal Age
Only persons aged 18 years and above are eligible to set up shop in Singapore. Additionally, that person should have a clean criminal record and shouldn’t have a history of bankruptcy.
Want to start a business and need assistance in applying for an Entrepreneur Pass?
Timcole‘s 8 years of experience in work pass applications can assure you a smooth and stress-free process. Click here to learn more about our Entrepreneur Pass services.
Alternatively, Timcole also offers Nominee Director services to aid your Singapore business incorporation.
Incorporating Your Company
Once all the basic requirements are met, you can begin the process of incorporating your company.
1. Choose a Business Structure
Your first task will be deciding on an appropriate business structure. You have five options to choose from:
For a sole-proprietary business, you will need to have an Entrepreneurship Pass if you wish to run your company personally here in Singapore. If you wish to run your business from abroad, you should hire someone to manage it. This can be another foreigner with an Entrepreneur Pass or a local authorized representative who is either a citizen or permanent resident.
Under this model, one of your partners should be ordinarily residing in the country. You should also get an entrepreneurship pass if you wish to run the company locally. Alternatively, you should hire an authorized representative and run it from abroad.
This is the most common model for foreigners. Subsidiary companies can be a part of a foreign multinational company, and the parent company can have a 100% shareholding status. However, the subsidiary company is considered a separate entity from the multinational.
A branch office, similar to a subsidiary company, can be a part of a foreign multinational company. However, a branch office is not considered a separate entity. Additionally, it is required to hire at least one employee who is a local resident in the country.
A representative office is set up only for research and feasibility studies. It should be a part of a foreign company, and it is not considered a separate legal entity. It should also employ no more than five people.
Need help incorporating your Singapore company?
Timcole is one of the leading company incorporation and accounting firm based in Singapore. Contact us now to find out how we can help you with your business.
2. Choose a Suitable Name
The next step involves coming up with a suitable name for your business. This sounds easy enough, but it can prove complex as all legal requirement should be met. First, the chosen name should not be vulgar or appear immoral under Singapore’s standards. Additionally, the name should not be too similar to other business names in the country. As such, it is standard practice for new companies to run a name check with the Accounting and Corporate Regulatory Authority (ACRA).
ACRA is responsible for registering and monitoring all locally-incorporated companies. The registration process is fully digitalized, and it can take as short as two days if everything is in order. ACRA requires several documents to register a new company:
- Document authenticating the company’s name
- A brief description of the company’s activities
- Details of the directors, company secretary, and shareholders
- The company’s constitution
- The company’s registered address
Additionally, the new company should meet several legal requirements, some of which are tied to the documents listed above.
First, the chosen name should have been reviewed and approved by ACRA. Additionally, the company should have at least one shareholder. At least one of the directors should also be a local resident of Singapore, and so should the company’s secretary. Finally, the company’s registered address should be local, and the company should have spent at least $1 in paid-up capital.
Once the company is registered, ACRA will give you permission to purchase a Business Profile. This profile is a necessary requirement when applying for your company’s license and setting up a business bank account. The business profile contains several important details:
- The company’s registration number
- The company’s date of registration
- Number and details of shareholders
Other details may be added depending on the type of state of company.
Finally, once everything is finalized, you should open a business bank account for your company. All financial transactions will be conducted via this account.
It is important to note that Singapore has an internationally-acclaimed financial system, in addition to its top investment and business status. As such, you can choose from a variety of local and foreign banking entities based on your company’s interests and personal preferences.
This is the time to get in on Singapore lucrative economy and reap all the goodies the future has to offer. Fortunately, Singapore is welcoming and friendly to foreigners and foreign companies, but only as long as you comply with the law. As such, take heed of all directions in this guide and avoid mishaps as much as possible for a smooth application process.
Timcole is one of the leading company incorporation and accounting firm based in Singapore. Our wide range of professional services serve as a one-stop solution for your business, offering you the most affordable price for services conducted with the highest level of excellency.
Contact us to find out more on how we can help you with your company today.