Singapore has many rules and regulations, so when setting up a business in Singapore, expats should keep in mind and abide by proper protocols to avoid any breakdown with the law. Besides, for entrepreneurs and multinational companies who want to commence a business abroad, Singapore is an attractive and better option for many reasons.
If you are an expat looking to set up a business in Singapore, you have come to the right place. Singapore is a popular destination for expats looking to start their businesses because of its favourable business environment and a strong economy. In this blog, we will give you leads on how to set up a business in Singapore.
How to set up a business in Singapore
1. Choose the proper business structure
The first step to set up a business in Singapore is to choose the proper business structure. There are four types of business structures: sole proprietorship, partnership, limited liability partnership (LLP), and private limited company (PLC). Each system has its benefits and drawbacks, so choosing the best that suits your needs are essential. Most expats choose to set up a PLC because it offers limited liability protection and has a lower tax rate than other structures.
2. Register your business
Once you have chosen your business structure, register your company with the Accounting and Corporate Regulatory Authority (ACRA). You must provide information about your business, including its name, address, and directors. You must also pay a registration fee, which varies depending on your business structure.
3. Obtain necessary permits and licenses
According to the nature of your business, you may need to get licenses and permits from different government agencies in Singapore. For example, if you are setting up a construction business, you must obtain a construction permit from the Building and Construction Authority (BCA). It’s essential to research and get all the necessary licenses and permits before you set up a business in Singapore to avoid any legal issues.
4. Open a corporate bank account
To set up a business in Singapore, you must open a corporate bank account. This will allow you to manage your finances and transact with your customers and suppliers. You can choose from various banks in Singapore, such as DBS, OCBC, and UOB. It’s essential to compare each bank’s different bank accounts and services before deciding.
5. Hire employees
If you plan to hire employees in Singapore, you must comply with the country’s employment laws. You must provide employees with employment contracts, pay them the minimum wage, and contribute to their Central Provident Fund (CPF). You can hire employees through recruitment agencies, job portals, or advertising on your company’s website or social media platforms.
6. Pay taxes
To set up a business in Singapore, you, as an owner, must pay taxes to the Inland Revenue Authority of Singapore (IRAS). The tax rate for PLCs is currently 17%, but you may be eligible for specific tax incentives and exemptions. Keeping accurate records of your business transactions and expenses is essential to ensure you pay the correct taxes.
7. Choose a registered office address
Your business must have a registered office address in Singapore. This is the address where all official correspondence will be sent, and it must be a physical address (not a PO box). If you don’t have a physical office in Singapore, you can use a registered office service provider to provide you with an address.
8. Get insurance
The right insurance coverage protects your business from unforeseen circumstances like accidents, natural disasters, and lawsuits. According to the nature of your business, you may need to obtain different types of insurance, like general, property, and professional liability insurance.
9. Build network and relationships
When you set up a business in Singapore, networking is essential to commence a business. Besides networking, building relationships with other companies and individuals can also help you expand your customer base, find new business opportunities, and stay current with industry trends. There are many networking events and business groups in Singapore that you can join, such as the Singapore Business Federation (SBF) and the American Chamber of Commerce (Am Cham).
10. Consider hiring a professional service provider
Set up a business in Singapore can be a complex process, especially for expats who may need to become more familiar with the local laws and regulations. Hence, consider hiring a professional service provider, such as a corporate secretarial, accounting, or law firm, to help you navigate the process. These firms can provide expert advice and support in company registration, compliance, tax planning, and legal matters.
Setting up a business in Singapore as an expat can be a rewarding and lucrative venture. However, it’s essential to research, comply with local laws and regulations, and seek professional advice when necessary. Following the steps outlined in this guide, you can set up a business in Singapore and enjoy the many benefits of doing business in this dynamic and vibrant city-state.