How To Start a Business in Singapore in 10 Steps!
Starting a business in Singapore is exciting but is not as simple as it seems. Owning and operating your own business is thrilling because it gives you flexibility and financial independence. Entrepreneurs are free to choose where they work, what they do, and who they work with; therefore, passionate founders must plan ahead. Singapore is one of the easiest countries to start a business, but it is not as straightforward as it appears. There are a lot of things to take into consideration before starting.
Fret not. We have the solution. This article will explain the steps for starting a business in Singapore, so you know how to proceed.
1. Prepare Yourself for Business
The idea of running a business may be exciting, but the real question is this… are you ready? It's one thing to have a great idea. It's another thing to be able to get the idea off the ground and lasted. You need to know if you will sell the right products or provide the right services to serve your audience.
A thorough business plan is very important, which includes market analysis, competitor analysis, and an effective operational strategy. This allows you to make a better decision by understanding the market better first before you jump into it recklessly.
2. Funding Capital: Financing Your Way Through
Most businesses fail when they cannot raise the funds they need to grow. Businesses (especially start-ups) require capital to get started and develop business plans and ideas. This definitely requires money, and funding greatly helps accelerate and smoothen this process.
Other than financial savings, here are some ways to get funding:
● Applying for Government grants and schemes
● Venture capital and angel investors
● Support from family and friends
● Bank Loans
● Peer-to-peer lending
Tip: A well-articulated business model, a good business case, and a strong management team can form the foundation for your fundraising efforts. This serves as proof for others, so they can be confident when you ask for their help.
3. Pick and Register Your Business Name
First of all, you need to pick a business name and choosing a business name can be challenging. It can be hard to find a business name that represents your passion when starting out. A good rule of thumb for choosing a business name is to make sure the name speaks to you and is unique. The best ways are to think of a list of 3 to 5 names and check for their availability through the BizFile+ portal.
It would be good to note that the Accounting and Corporate Regulatory Authority (ACRA) will reject your proposed name if it has:
● Violation of copyrights or trademarks
● Similar, identical, or phonetically the same as another company that has already registered
● Contains vulgar or obscene words
Having found the most suitable name for your business, you should register it quickly so that you can claim ownership over it in the digital space. This is because a company website is critical in this digital age.
Tip: Singapore domain names are issued by the Singapore Network Information Centre - so its best to check there first.
4. Choose Your Business Structure
Running a small business can be tough. You are responsible for everything from the bottom line to the products and services you offer. This is why you need the right organizational structure to handle matters smoothly.
Besides setting up a private limited company in Singapore, there are numerous business structures you can choose from. Here are the 4 types of business structures in Singapore:
Company (private limited)
Limited liability partnership (LLP)
Pick the best business structure for your company by understanding how they differ. Your company's structure will impact your taxes, personal liabilities, brand image, credit, and the ability to develop your business idea to its full potential.
5. Open a business bank account
Besides finding out how much to register a company in Singapore, you also need to consider your financial and operational management.
You'll need a business account unless you're a sole proprietor and are comfortable receiving payments via your personal account. The bank account for your new company should be different from the one you use for your personal expenses. Ideally, you will have separate checking and savings accounts to keep check and balance.
At Atriox, we work with OCBC bank and assist with establishing corporate bank accounts so that you won't have to worry about it.
6. Form your team
If you want to build a successful business, you'll need the right team of people behind you to help you along the way. You might have a great product or service that can really make things happen, but without a solid team of support, you won't be able to make substantial progress.
When working with a team in the business, you would also need to understand some legalities like employees' rights under the employment act. Here is an important checklist to follow:
Employers must pay their employees correct salaries within 7 days after the end of the salary period.
Employees must receive at least 7 days of annual leave in their first 12 months of services, 14 days in subsequent years, and at least 14 days of sick leave entitlement.
Employees are not allowed to work more than 6 hours in a day without a break
Employees are also not allowed to work more than 8 hours a day and not more than 44 hours a week.
Employers must also register all their Singapore citizens and PR employees with the CPF Board and pay CPF contributions.
Some stipulations should be noted when forming your team when starting a business in Singapore. Depending on your business structure:
The number of shareholders in a company cannot exceed 50 (a private limited company that exceeds this limit will need to convert to a public company, which can have unlimited shareholders)
You may appoint multiple directors, but at least one of them must be local.
A foreign business incorporated in Singapore is required to appoint a nominee director.
ACRA stated that every company must appoint a corporate secretary within 6 months of its incorporation (or you may be penalized up to $1,000).
7. Secure a Registered Office Address
One of the requirements for Singapore company registration is a registered office address. In addition to informing your customers where you are located, it is also necessary for legal and registration purposes. It is also where your company will be required to keep its principal place of business.
Instead of renting a business space under the Home Office Scheme under the Urban Redevelopment Authority (URA), you may consider registering your residential property or HBD to cut capital costs. These steps will allow you to reduce costs and save money to allocate your funds to other areas, such as marketing and product development.
You could look into virtual offices if you do not have a specific location. Virtual offices are convenient, easy, private, and highly cost-effective. You can use a service provider like Atriox to keep the process simple and easy.
8. Register Your Business (aka incorporation)
Don't assume that you can just get your business started online and start selling. You have to get your business registered or incorporated. To avoid missing any important documents or steps in registering your company, you might consider incorporation services from a professional firm like Atriox.
The outsourced company secretary will prepare a set of first board meeting documents (appointment of directors, secretary, allotment of shares, etc.), Lodging of Register of Registerable Controllers, and fill up the relevant declaration forms.
Here are the following required documents and information:
Approved company name
Description of business activities
Registered local address
Particulars of shareholders, directors, company secretary
Foreign Individuals: A copy of passport & proof of residential address (overseas)
Singapore Residents: A copy of Singapore identity card
9. Understand Your Tax Obligation
Taxes are unavoidable when you work for yourself or run a small business. This is why we recommend you understand the basics of taxes and how to work out your tax obligation.
Type of taxes to take note of:
Corporate Income Tax You must understand Singapore corporate income tax basics and key dates you need to note. This will enable you to file and submit your documents accordingly. Contrary to income tax, corporate tax e-filing deadlines are in December rather than April. In Singapore, tax-resident companies pay a flat rate of 17%. Therefore, paying your taxes on time is essential to avoid penalties and interest. For assistance with corporate income tax, our tax specialists are ready to help. Get a free quotation here!
GST Tax The Goods and Services Tax (GST) is a tax imposed on the supply of goods and services in Singapore and on imports into Singapore. At present, Singapore's GST is 7%. GST registration is necessary if your taxable revenue exceeds S$1 million.
10. Set Up Digital Presence
You must set up your digital presence whether you are just starting a business or already running one. Without it, you cannot succeed in the modern era. Having a website and social media account for your business allows your target audience to easily find you on search engines (i.e.: Google), social networks (i.e.: Facebook), and others where they search for information about your business. This will also increase your brand awareness and credibility in the long run.
Besides, creating a digital presence for your brand is also creating an ideal platform to communicate with consumers. These digital platforms can effectively educate consumers about your brand and your product's unique selling points.
Having an online presence is crucial to growing your customer base and competing against your competitors. Take the time to ensure your platforms are ready for greater exposure and impact.
Starting a Business in Singapore Is Easy - With Us
If you want to start a business in Singapore, you need to know that you will have to invest a lot of effort and time to get results.
Why not work with us and let us do some heavy lifting for you? Let's talk about how we can help you start your business in Singapore quickly so that you start working on what matters.
In Short: How To Start a Business in Singapore in 10 Steps
Prepare Yourself for Business
Funding Capital: Financing Your Way Through
Pick and Register Your Business Name
Choose Your Business Structure
Open a business bank account
Form your team
Secure a Registered Office Address
Register Your Business (aka incorporation)
Understand Your Tax Obligation
Set Up Digital Presence
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