The restaurant industry in Singapore has been growing rapidly in recent years. Therefore, some might choose to take advantage of this growth by setting up a restaurant there. Doing so and running it in the proper manner will bring the restaurant owner much financial success.
Food is something that attracts people of various cultures across Singapore. Singaporeans tend to have unique tastes in food, regardless of whether the food is Chinese, Malay, Indian, or of any other origin. This fact has caused the restaurant business in Singapore to truly thrive. According to the latest statistics, there are more than 7,000 restaurants in Singapore. Of these, more than 2,000 are sitting restaurants. The rest are cafés and fast food outlets.
Therefore, those who plan on starting a restaurant in Singapore ought to remain informed about the tastes and dietary requirements of various people across Singapore. There is much evidence which detail the intense competition and activity of Singapore’s restaurant industry. The revenue of the restaurant business across Singapore has been growing at an impressive rate; it is expected to be at around US$765 million in 2023. Thus, the restaurant industry in Singapore is one of the country’s most lucrative and competitive.
Difficulties One Might Face When Setting Up a Restaurant in Singapore
Singapore is known the world over as a culinary paradise. It is one of the food capitals of Asia because of the various cuisines which are available there. However, although setting up a business in Singapore is relatively simple due to the relative lack of regulations imposed upon locals and foreigners alike, setting up a restaurant in Singapore may cause the owner to face certain difficulties because of the high level of competition. However, it also means that there are many lucrative opportunities for those who are comfortable in the food and beverage (F&B) sector. Some of the challenges which are faced by many Singaporean restaurants owners include the following:
High levels of competition: Restaurants in Singapore face much competition because of the high number of restaurants that cause new restaurants to struggle. Therefore, it is essential for any restaurant owner in Singapore to be aware of the market and competitors in order to survive the challenges of the food industry in Singapore. This problem can only be solved if the owners are aware of the market challenges, choose a suitable location, select the proper cuisine, acknowledge the likes and dislikes of the restaurant’s customers, and take customers’ feedback seriously.
High food costs: The cost of food is high in Singapore. These costs are exacerbated by the fact that approximately 90% of the food used by restaurant is imported food. This leads to an increase in the costs of raw materials. Therefore, restaurant owners ought to frequently monitor the restaurant’s stock and inventory. They must also make the necessary raw materials available in sufficient quantities.
High labor costs: Restaurant owners in Singapore often have to pay relatively high wages in order to retain employees who will meet workforce needs. The relatively a high turnover rate of employees in Singapore makes retention of employees somewhat difficult. Therefore, complete training ought to be given to the employees of the restaurant before they begin working there. Such training will enable them to be more able to remain working in the restaurant on a long-term basis.
Reduced focus on market strategy: Far too many people who choose to open a restaurant in Singapore put in too little effort in towards the creation of a suitable marketing strategy. They do not select any unique selling tactics which could be used to attract many consumers. Many owners also fail to notice the strategies of their competitors. Thus, restaurant owners must use proper marketing strategies, recognize their customer requirements, notice what their competitors are offering, and do what they can to make their restaurants unique.
Licenses Required for Setting Up a Restaurant in Singapore
The food and beverage industry in Singapore is regulated by the guidelines stated by the Accounting and Corporate Regulatory Authority (ACRA). After setting up premises and making investments, the owners need to obtain the requisite licenses before setting up a restaurant in Singapore. The licenses to be obtained include the following:
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The Food Shop License is a necessary license required to open a restaurant in Singapore. The license may take approximately a month to be issued, but it could be more if the premises have to be renovated according to the regulations set by the National Environment Agency (NEA). The NEA will only issue the license after inspecting the restaurant premises, providing specific requirements which must be followed, and receiving the payment of the license fee before issuing the license.
Restaurants that serve alcoholic beverages need a Liquor License. The Liquor Licensing Board in Singapore issues two types of licenses; one is a public house license while the other is a beer house license. These licenses have a validity period of two years.
A Basic Food Hygiene Course license must also be obtained because Singapore’s corporate regulatory authorities are strict regarding the maintenance of cleanliness in the F&B industry. This license serves as a form of food hygiene certification for restaurant owners in Singapore. The cleanliness rating must be displayed by the owners, who must also send their staff members for Basic Food Hygiene courses from government-approved agencies. Owners who neglect proper food hygiene practices will not only damage customers’ health but also cause them to suffer from legal problems.
Restaurant owners ought to receive a Halal License in order to better cater to the Muslim community residing in Singapore. This license will help you target the multi-cultural groups, and this license also ensures the food safety standards of a restaurant. It is essential to get your Halal supply from the certified third-party suppliers only.
The employers must also register for the Central Provident Fund (CPF) to contribute towards the employee’s salary and also to report the staff income for taxation. The contributions are usually made at a rate of 16%.
Should you require any assistance in obtaining any necessary license, we at Paul Hype Page & Co can be of assistance. Our experts will help you contact and remain in contact with any relevant government authorities. In this way, we will ensure that you receive a license in the proper manner.
Requirements for Operation of a Restaurant in Singapore
There are certain requirements to be followed by restaurant owners who plan to operate a restaurant in Singapore. Owners must first must incorporate the restaurant as a private limited company by registering it with ACRA. The owners must then identify their premises and pay rent if they do not own the associated land. To receive approval from a landowner, restaurant owners must submit a letter of intent which will help all parties involved engage in the rental transactions. A layout plan as well as planning permission are required if a new building must be constructed for the location of the new restaurant. All tenancy agreements are to be signed by the landowner and tenant alike. Restaurant owners may also opt to negotiate to renew the lease at the same rental price after the expiry of the lease period. The property must also meet the country’s fire safety standards. For proof of such, restaurant owners must receive a Fire Certificate from the Singapore Civil Defense Force. If there is no fire certificate which has already been acquired, the restaurant owners should ask the landowner to receive one before the tenancy agreement is signed.
Anyone who plans to set up a restaurant in Singapore is required to receive the code of practice of environmental health license that helps them know about the specifications which are required to receive a Food Shop License. All future renovations must be completed under this code. Owners must also receive a Food Shop License from the NEA. This license is mandatory for the opening of any café or restaurant in Singapore. It certifies the restautrant’s cleanliness and hygiene. There must also be adequate pest control which includes monthly pest inspection. Another important license to be received is one which allows the importation and exportation of important food products. Restaurant owners in Singapore may choose to hire either local or foreign workers. Those who choose to hire foreign workers must obtain work passes for these foreign employees. All work pass approvals in Singapore are granted by the Ministry of Manpower (MOM).
Anyone who is interested in setting up a restaurant in Singapore must abide by the legal rules and regulations which have been stipulated by government agencies. To attract customers from all over Singapore, restaurant owners need to learn about the tastes and preferences of their customers and cater to them accordingly.
Setting Up a Restaurant in Singapore FAQs
Are foreigners who open a restaurant In Singapore Subject To Additional Regulations?Tiwi2020-07-03T12:05:34+08:00
Foreigners who choose to relocate and open a restaurant in Singapore must follow the incorporation proceduresrequired for the setup of a private limited company in the country. They must apply for an EntrePass or any other valid work pass beforestarting the restaurant in Singapore. They must also have to fulfill the legal requirements and obtain the requisite licenses. They may hire either foreign or local staff members;however, the owners must apply for work passesfor foreign employees.
What difficulties might prospective restaurant owners in Singapore face?Tiwi2020-07-03T12:04:25+08:00
The setting up of a restaurant in Singaporecan be challenging for first-time restaurant owners. There is much competition in the market.It can also bedifficult to obtain the necessary capital. Many new restaurant owners are also not aware of government grants and thus waste much time and money
Furthermore, the process of acquiring licenses can be difficultbecause it may take a few weeks or months to get the requisite licenses. Other challenges that prospective owners may face include higher rental costs, hiring and paying ofemployees, and conducting of market research is done, etc. Those who are new to the F&B industry in Singapore ought to seek professional advice for the solving of any related problems.
Is anyone allowed to sell food which they have made themselves?Tiwi2020-07-03T12:04:02+08:00
Those who prepare food at home to be sold do not need any license. However, they need to abide by guidelines provided by the Housing and Development Board as well as the Urban Redevelopment Authority for Small-Scale Business Schemes. These people are to keep their place of dwelling clean, and no smoke or noise may affect their neighbors. Those who are running a home-based business may only receive help from family members; they cannot recruit any external employees, use paid advertisements, or sell their food at stalls. They may promote the business through a social media page but may not pay for social media advertisements.