Despite being a small country island, Singapore is one of the tech-savviest smart cities in the world and has risen to the top of the World Bank’s best places to do business. According to the Doing Business 2020 study done by World Bank, which measures regulations across 190 economies in 12 business regulatory areas to assess the business environment in each economy, Singapore achieved a score of 86.2 (out of 100), thus placing 2nd on the list of The World’s Most Business-Friendly Countries. This Little Red Dot is rapidly growing on the entrepreneurial scene due to having a business-friendly environment, low taxation, government schemes and grants.
Here are 3 simple steps that you can follow to set up a new business in Singapore. To start a business in Singapore, firstly, you will need to choose your preferred business structure. This might be a tough choice, as there are a few different options available; namely sole-proprietorship, partnership, limited partnership (LP), limited liability partnership (LLP), and company. However, it ultimately depends on the business goals of your company. Many companies register with Accounting and Corporate Regulatory Authority (ACRA) as private limited companies, which is a type of limited liability company (LLC) whereby the shares are held by less than 50 persons and are not available to the general public. Another point to note is that shareholders are not liable for debts and losses beyond their share capital, so do choose your shareholders wisely. Also, corporate tax is required for all registered companies in Singapore, at a flat rate of 17% of the company’s chargeable income. For new start-up companies, you will be pleased to know that there are tax exemption schemes available, with at least 50% exemption rates.
Next, you will need to choose and set up your company name, which must be approved by the ACRA; define a minimum number of shareholders, one director and company secretary who must reside in Singapore; issue a share capital capital of at least SGD 1; and register your company’s physical office address. As a new business in Singapore, you should also purchase a Business Profile from ACRA. This electronic report contains information about the company, including the registration number (UEN), registration date, and shareholders. This profile will be required to open a company bank account, apply for licenses and permits and search for potential business partners.
Finally, after incorporating your company, you will need to open a company bank account in Singapore. There is a variety of local as well as international bank options that you can choose from. And last but not least, these are some additional post-registration activities that you might also have to consider, such as:
1. Corppass registration – Corppass is the authorisation system for corporate entities to manage digital service access of government agencies, to perform corporate transactions.
2. Licenses and permits – You need approval from government authorities.
3. Registered office hours – You must register your office address and hours with minimum of three hours per weekday.
4. Registration number – Issued by ACRA on all your documents used for official business communication.
5. Customs registration – If your business involves importing and exporting and you must register your company with the Singapore customs.
6. Goods and services tax registration – You must register for GST if your annual taxable revenue exceeds SGD 1 million per year.
7. Registration with Singapore Central Provident Fund (CPF) – CPF is a compulsory pension fund scheme in which the employer contributes a percentage of the monthly salary to the fund.
With all these information on hand, are you ready to start a new business in Singapore? If you need any help with regards to company incorporation and starting your new business in Singapore, do visit www.xignam.com, where their skilled and friendly consultants will be able to assist you!
– Written by: Patricia Shareleen & Carmen Ho, Cayman Management Consultants