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Starting A Small Business In Singapore For Foreigners - A Quick Guide

Updated time: 20 Jul, 2021, 10:15 (UTC+08:00)

Economic development and strong investment of commerce has made Singapore an ideal location for doing business and being one of the most competitive economies in the world. Starting own business in Singapore is a chance to expand to Asian market for your company. One IBC reviews a checklist to help investors to speed things up and come prepared for starting a small business in Singapore

Starting A Small Business In Singapore For Foreigners - A Quick Guide

Singapore is the most competitive economies in the world

Why should foreigners choose to start a small business in Singapore?

Strong trade and investment makes Singapore the most competitive Asian country and the world’s easiest place to do business. Starting your own business in Singapore also brings several other benefits. Singapore has a network of over 50 comprehensive Double Taxation Avoidance Agreements with many major markets in the world as well as many free trade agreements and the Investment Guarantee Agreements. Strict and comprehensive intellectual property laws also help new businesses better protect their ideas in this country. The government also initiated Startup SG, which is basically a launch pad for entrepreneurs. This can help people start a small business in Singapore easily. The government here has established several regulations in order to foster an ideal environment for new business to grow and prosper.

Singapore’s infrastructure also provides a solid foundation for businesses to develop. Changi International Airport connects to more than 330 cities, along with hosting many leading logistics brands like UPS and FedEx. Singapore’s seaport is frequently ranked the best in Asia when it comes to infrastructure. It has the busiest container ports in the world bridging Singapore and 123 other countries. The entire population is connected to high speed Internet making it easy for companies to reach their customers. With such developed infrastructure, starting a small trading or IT company in Singapore can be a sound investment.

There are over 128 commercial banks, with many headquartered in Singapore. There are also 31 merchant banks and 604 capital markets services license holders. This provides top class banking and financial services when starting a business in Singapore. Singapore’s forex trading center is also among the biggest in the world.

Starting a small business in Singapore for foreigners checklist

There are many duties and responsibilities to complete when starting your own business in Singapore. All of those can be summed up into 4 steps below.

Step 1: Set out plan for the new business

The first step is to create a solid business plan. Vision and mission statement, market analysis and target audience, products and services, marketing, finance, logistics and operation are the main areas a business owner needs to work on when crafting a business plan.

Capital cost and fixed cost are the two most important factors when starting a small business in Singapore. Capital costs are one-time amounts that you will need to start your own business in Singapore while fixed costs are the recurring expenses monthly or yearly. Paid up capital is one of the capital costs that companies have to work out when registering for a business in Singapore.

Then the owner has to pick a company name. It should be unique and memorable. The government has some restrictions in naming a business. Owners should try to avoid these words in name: “bank”, “insurance”, “university” and “education” because these require special permits and have to be applied with certain special government offices.

For foreign businesses, they can register the following types of company when starting their own business in Singapore:

  • Private Limited Company

  • Limited Liability Partnership

  • Sole Proprietorship

These three entities have distinct features and differences that can be beneficial to each business operation. When comparing the various types of entities, owners have to make sure this type of structure will be beneficial to the business in the future.

Step 2: Register the new company

In the application, the owners need to include the business details. This is a brief of business description, corporate secretary and nominee director information with at least one director of Singapore citizenship. One IBC nominee director service can come in handy if business owners do not have a Singaporean partner. A Singapore company is also required to register a local address for receiving legal correspondence. This can be dealt with simply by using One IBC serviced office package.

Foreigners cannot self-register a company and need to delegate the filling to an authorized third party. As a certified corporate service provider, One IBC can help foreigners set up a small business entity in Singapore. Overall, this entire step can be handled quite easily and quickly with One IBC’s services. Our professional staff will support business owners holistically.

Step 3: Open a bank account

After receiving your new Singapore company, you should open a local bank account for your business. Singapore boasts several world class international and local banks as well as financial institutions. Having a bank account in Singapore can be a significant advantage for businesses. However, the banking laws in Singapore are very strict and the application process can take a long time. Not to mention that banks in Singapore have a Know Your Customer (KYC) policy that requires applicants to come in person for an interview.

If that seems complicated, One IBC’s service is here to support our customers to open bank accounts from anywhere in the world. Our professional expert can help with preparing the application as well as coaching for the KYC interview.

Step 4: Set up the accounting routine

In Singapore, the government requires several tax reports from companies. Even if the company has no transaction, it still has to submit annual reports such as: Estimated chargeable income (ECI), financial statements, and annual tax return called Form C or Form C-S. When starting as a small business in Singapore for foreigners, many companies do not have their own accounting team so this can be a headache. One IBC accounting and auditing service can give our clients a peace of mind by helping companies deal with these paperworks. Many of our staff have work experience as public accountant and auditor so this step will be handled efficiently and professionally.