Register a Singapore Business
Nowadays, a lot of us dream to escape from the routine office work and start up a business which gives us great dividends, in terms of cash and time.
However, issues like lack of capacity, start-up fund, networking, and the presence of high risk are preventing many from getting started.
Although Singapore possess as the best place to start a business in the Asia Pacific region, there are factors that need to be considered before Incorporating a Singapore business.
Below we look at some of the questions you need to ask yourself before succeeding as a successful entrepreneur in Singapore.
Is Your Nature of Business Suitable for Singapore?
Although there is no such thing as the ‘right’ or ‘wrong’ business, there are a certain type of business or industries that when incorporated in Singapore, will prevail in the Republic.
The travel and tourism industry one of the largest contributors to the Singapore economy. Singapore’s safe tourist haven, pocket-friendly shopping options and modern structures makes it a preferred destination for travelers around the world.
Destinations with booming tourism industry have a growing hospitality industry, and it is no different with Singapore. Options available for you to explore in this industry includes bars, restaurants and cafes to chains of hotels and resorts.
Globally-renowned IT service companies such as Microsoft, Apple, Google, and Micron Technology Inc have their Regional Headquarters in Singapore. Although those mentioned companies have MNC status, it is still a catch to set up an IT service provider firm in Singapore. Other IT firms have already set up businesses in Singapore owing to the growing potential and skilled labour available in this arena. The infrastructure in Singapore is established keeping in mind the support that IT businesses would require in the years to come.
You could set up a business that provides a variety of IT services such as web development, social networking, website designing and many more depending on the interest and skill set you have.
With international players like Pfizer, Novartis and GlaxoSmithKline making their presence felt in Singapore, the biotech industry has been attracting a lot of foreign attention and it is highly supported by the Singaporean government.
Biotechnology is a rapidly developing industry in the world, and it is no different in Singapore. Whether it is spending on the development of infrastructure, R&D facilities, technology or other aspects that support this industry, the government has been investing greatly in it.
Be it providing mobile phone, or mobile phone connections or internet services, there is still a wide range of service that has been left untapped by existing telecommunications providers. Telecommunications here includes radio and television stations, as well as print and online media service provider. With an ever growing nation of readers, it is a good time to be investing in this sector.
This has a very strong correlation with the tourism industry. With international high street fashion brands such as H&M, Aldo, Levis and Zara already making their profits in Singapore, the fashion retail industry in Singapore is bound to flourish further.
Tourists coming from all over the world shop in Singapore and stock up on branded products, the products of which are available at reasonable prices as compared to other countries. This means, you too could open a retail outlet/ franchisee and make your pile of profits.
This is a growing industry in the world of business in Singapore, and it is bound to stay that way for a long time. Not only do Singaporean institutes provide good quality education with the right price, their courses are also in high demand. In short, Singapore is turning out to be a preferred destination for Southeast Asian students who want to go for higher studies but without venturing far away from home.
What the Most Suitable Business Entity to Set up?
Deciding on the right business structure to incorporate in Singapore will depend on your business situation and personal plans.
If you are a Singapore citizen and would like to register a small business where you will be the only owner and the nature of your products/service does not carry liability issues, it might be easier for you to register your business as a Sole Proprietorship.
If your business involves providing services and perhaps having one or more partners, setting up an LLP might be a suitable business structure for you.
However, based on our professional opinion, incorporating a private limited company would be the best choice. Although compliance requirements are slightly more complex, it is by far the best structure in the long run.
Different Types of Company Setup in Singapore:
- Private Limited Company (Recommended)
Limited by shares and is a separate legal entity from its shareholders. It is recognized as a taxable entity.
- Sole Proprietorship
A business entity owned by one person.
Two or more individuals carrying out a business. Assets and returns are typically shared internally, although the amount may differ.
- Limited Partnership
A business owned by two or more individuals. At least one must be a General Partner, and one a Limited Partner.
- Limited Liability Partnership (LLP)
Each partner’s own liability is generally limited.
Types of Singapore Company Incorporation
- Employment Pass (EP)
Applicable to foreigners who are equipped with years of management skills, formal tertiary education and having met the minimum salary requirement.
Also known as an Entrepreneur Pass. This is for foreign entrepreneurs who are actively involved in the business operations and who do not have a formal tertiary education. Applications can be made with MOM. Approval of this visa is on a case-by-case basis.
- Local Nominee Director
A local resident based in Singapore must act as your local nominee director, with a local residential address. This is applicable to foreigners who do not want to relocate to Singapore, and those not involved in the daily operations of a business.
- Representative Office with Business Visa
A good exploratory option for foreigners to embrace the business opportunities in Singapore and within the region. Businesses signed within companies in Singapore can enjoy the privilege of banking and trading in Singapore.
- Foreign Subsidiary Incorporation
This entity shares the same provisions as other local companies in Singapore, even though the development of the company is foreign and separate.
- Foreign Branch Incorporation
If you do not want to incorporate a local company in Singapore, you can still carry out your business activities by registering as a Foreign Branch. This entity is an extension of the parent company, and it is not considered a legal entity that is separate from the parent company.
- Foreign Representative Office (RO)
A RO do not have a legal status but is merely an administrative arrangement. It is primarily designed for non-commercial activities.
- Offshore company in Singapore
An Offshore company incorporation can be of an advantage if you are not interested in moving to Singapore and if you are not interested in running everyday procedures related to your business.
The Company Structure that We at Paul Hype Page & Co will Highly Suggest,
- Private Limited Company + Employment Pass
The private limited company structure offers flexibility and is a very commercially feasible option. However, incorporating a company and starting your own business in Singapore is not without any challenges.
Challenges You Might Face Incorporating a Singapore Business
Incorporating a company and starting your own business in Singapore is not without any challenges. Here we look at some challenges that one might face incorporating a Singapore Company.
This is vital for every newbie before incorporating their company as the Singapore regulation requires every company director to obtain the necessary visa.
Also, as a foreign investor starting a business in Singapore, you would need to engage the services of the Accounting and Corporate Regulatory Authority (ACRA) licensed corporate services provider, as the application for incorporation is submitted via ACRA’s electronic portal, which need a Singpass ID to login.
Note: A SingPass is only given to Singapore citizens, Singapore Permanent Residents and those who have been issued a FIN number alongside with their Employment Pass.
As per Singapore Company law, you are unable to be a director of any Singapore company until you have the valid visa. Till the visa gets approved, we will appoint a nominee director on your behalf, or you may also nominate any individual with a valid Singapore ID and SingPass.
Admittedly, this process may seem oddly reverse, whereby the company is incorporated in Singapore before the employment pass is applied for. Paul Hype Page & Co. understands how tedious and time consuming is that process.
So, as Singapore #1 ACRA licence corporate service provider, assisting you will be Paul Hype Page’s top priority!
To incorporate a Singapore company, can apply for a Singapore Employment Pass (EP) work on the ground of you being an entrepreneur, or managing director of a Singapore company and wish to relocate to Singapore to manage the operations.
The Application of an EP
The benchmark for an Employment Pass application focuses on the individual and its potential contributions to Singapore. Not all applications that is sent to the Ministry of Manpower (MOM) will be approved. To obtain and qualification criteria to obtain an EP includes:
- A fixed monthly salary from $3,300 to $3,600
- Acceptable educational qualifications, e.g.a diploma or degree
- Professional qualifications
- Specialist skills
- Related work experience
Rejected and Re-application
The reality is that not all Singapore company incorporation and EP applications are approved. Ministry of Manpower (MOM) and ACRA evaluate each applicant based on the individual and company credentials.
With more cases of EP applications being rejected in Singapore, foreigners need professional help more than ever. This is an area of expertise for us at Paul Hype Page & Co. and we can help you put your best foot forward.
Factors that will lead to Rejected Applications
- Failing the regulations Anti-Money Laundering and Countering the Financing of Terrorism Steering (AML/CFT) Committee
- Failing the required Know Your Customer (KYC) process
However, if your rejection is not based on the 2 factors mentioned above, we will explore the rejection reasons with MOM and ACRA and file an appeal by addressing the issues raised. If the additional details submitted are satisfactory to MOM, your application will most likely be approved.
P/S: MOM normally takes at least three weeks to process an appeal matter.
How Paul Hype Page & Co. Can Be a Savior
We will submit all EP applications electronically to MOM so that you will learn about the outcome of your application faster. Upon approval, MOM will issue an In-Principle Approval (IPA) letter via email.
The IPA letter must be produced upon collection of the EP at the Work Pass Division. An IPA letter is valid for six months from the date of notification of approval.
To collect your EP, you will need to produce:
- A copy of the IPA letter,
- Passport size photo,
- Original passport,
- Medical report* (if the In-Principle Approval states that you require one), and,
- Any other documents that are requested in the approval letter.
We will also assist you in submitting the paperwork for a Dependent Pass visa if it is needed.
Tax Efficient Entity to Set Up in Singapore
Singapore offer a Start-up Tax Exemption Scheme which allows new businesses to claim full tax exemption. The amount is up to SGD$100,000 on qualifying expenses for the first 3-years of tax assessments.
Those qualifies to the tax exemption includes,
- Private Limited Company
- Representative Office with Business Visa
- Foreign Subsidiary Company
- Foreign Branch Company
- Foreign Representative Office (RO)
- Singapore offshore company
Documents Required for Singapore Company Incorporation
- Company Name and SSIC code
- A brief description of the Business Activities
- Particulars of Shareholders, Directors and Company Secretary
- Registered Office Address
- Company Constitution (formerly known as Memorandum and Articles of Association or M&AA)
- Scanned copy of Singapore NRIC (Front and Back)
- Scanned copy of passport
- Proof of overseas address (e.g. a utility bill or bank statement)
- Fully completed ECRA’s Know Your Client (or KYC) document
- Banks may also require their KYC documents in addition to bank opening forms
- For Corporate Shareholders (if any)
- Scanned copy of Certificate of Incorporation
- Scanned copy of Business Profile
- Scanned copy of Memorandum and Articles of Association
- Proof of address
Being the NO. 1 license corporate service provider in Singapore, we always advise our clients on registering the most suitable type of company for their purposes. Choosing the right business structure for company registration in Singapore is an important decision as it can affect the taxation of the new business entity.
Call us to get your business started in Singapore.