Starting a Business in Singapore 2

Starting a Business in Singapore: An Ultimate Guide

Starting a business in Singapore as a foreigner is a relatively straightforward process. However, it requires careful planning and research to ensure that you comply with all the necessary legal requirements. In this guide, we will provide you with the essential information to help you start your business in Singapore successfully.

  1. Prepare the Visa/Work Pass

To start a business in Singapore, you need to obtain the correct visa to work in the country legally. If you plan to relocate and work in Singapore, you must obtain an Employment Pass (EP) or an EntrePass.

These passes allow you to act as a local director of your own company and give you an advantage if you are considering the Singapore PR application and eventually Singapore citizen application. However, if relocation is not possible, you will need to appoint a nominee resident director.

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  1. Choose a Business Structure

There are several types of business structures in Singapore, and a foreign individual has to decide what business to establish. Some of the options available are Sole Proprietorship, Private Limited Company (LLC), and Limited Liability Partnership (LLP).

  • A Sole Proprietorship is recommended for low-risk businesses. It has no separate legal entity from the owner, and the owner is responsible for its debts and losses. It gives the sole freedom to control all decisions, and the registration cost is minimal. Its income is considered as that of its owner, and it pays a personal income tax of 0%-22%.
  • A Private Limited Company (LLC) can have no more than 50 shareholders/owners. It requires at least one local director who is a natural resident of Singapore. It has an independent legal identity, perpetual succession, and sets limited liability depending on the share invested. It pays corporate tax of 0%-17% and offers greater flexibility in raising capital for future expansion.
  • Limited Liability Partnership (LLP) has no limit on the number of partners and needs at least one partner who is a natural resident of Singapore. LLP has a separate legal existence from its owners, and its liability depends on its actions. The partners are required to pay the personal income tax of 0%-22% on their income from LLP.

For foreign companies, there are options such as a Subsidiary Company, Branch Office, and Representative Office. 

  • A Subsidiary Company is a business owned by a parent company but a separate legal entity for tax, regulation, and liability purposes. 
  • A Branch Office is an outlet of the parent company and does not constitute a separate legal entity. 
  • A Representative Office serves as a local liaison office for a foreign corporation and does not possess an independent legal entity apart from its parent company.
  1. Come Up with a Unique Company Name

Choosing a unique company name is critical when starting a business in Singapore. No two company names can be identical, so you must be creative when selecting a name. Once you have a name, ask your filing agency to validate it in ACRA.

  1. Organise the Team

To register a business in Singapore, you need at least one shareholder, but full foreign ownership is allowed. You also need at least one Resident Director, whether natural, permanent, or a legal pass holder. A director is not necessarily a shareholder.

According to Singapore law, you need to appoint a Corporate Secretary within six months of the date of company incorporation. Make sure to hire a reputable one as they will be handling the company papers and reporting to the government.

  1. Choose a Registered Address

One crucial aspect of setting up a business in Singapore is selecting a registered address. This address can be either residential or commercial and will serve as the official correspondence address for your business. It’s essential to ensure that the address you choose is valid and can receive all formal letters and communications.

  1. Determine the Paid-up Capital

When setting up a new private limited company in Singapore, a paid-up capital of at least 1 SGD per share is typically sufficient. This amount can be increased later on, and if the funds are in other currencies, they can also be changed anytime after the company’s incorporation.

Note that when registering your business, you can simply go straight to ACRA and submit the required documents. With these simple steps, you’ll be well on your way to setting up a successful business in Singapore.

Bottomline

In conclusion, starting a business in Singapore as a foreigner can be a straightforward process if you understand and comply with the legal requirements. By following the steps outlined in this guide, you will be well on your way to establishing a successful business in Singapore.

Remember to do your research, carefully consider your business structure, and seek professional advice when necessary. With its strategic location, business-friendly policies, and highly skilled workforce, Singapore provides a conducive environment for entrepreneurs to thrive. So, take the leap and start your business in Singapore today!

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