As published in the World Bank’s Doing Business Report 2016, Singapore is ranked number one as the best country in the world to start and run a business, topping the world rankings for 10 consecutive years.
Singapore is classed as a safe place to conduct business activities, thanks to its stable political environment and its excellent structure that supports growing businesses looking for expansion opportunities.
With an attractive tax system, Singapore offers new startups with 100% tax exemption on their first $100,000 of normal chargeable income and 50% exemption on their next $200,000. Thereafter, companies enjoy a flat tax rate of 17%, which is considerably low in comparison with other developed countries.
If you are a foreigner and you’re thinking to start a company in Singapore, read on as I take you through the important information that you must know before you get started in the rest of this article.
Let’s begin with familiarising yourself with the relevant local authorities in Singapore so you know who to approach when you need help!
Accounting and Corporate Regulatory Authority (ACRA) – ACRA is the authority that you register your company with. Anyone who wants to start a business in Singapore will need to register their business with ACRA. Check out their website for various helpful guides to get started.
Inland Revenue Authority of Singapore (IRAS) – This is where you report and pay your annual corporate taxes for your company. You can refer to IRAS website for details on prevailing tax rates.
Ministry Of Manpower (MOM) – As a foreigner, you will need to apply for an EntrePass if you intend to stay in Singapore to run your business and MOM is the go-to place to get this done. Alternatively, you can appoint a local resident as your company local director if your plan is to live overseas while running your business operations in Singapore. Any matters relating to employment and labour will falls under the purview of MOM. Feel free to visit their website for more information.
If you are sourcing for ideas on what kind of businesses you can start, let me give you a quick tip.
There is great diversity in Singapore’s population and we have people coming from different cultural backgrounds and nationalities. The key here is to find a suitable target market that you can specialise in.
In my opinion, your background will offer you an added advantage if you are starting a business that serves working expats from your country.
For example, we have many people from Philippines who are working in Singapore and if you can provide a value-added service that suits their needs, you will have a good market!
If you have decided on the type of business that you want to start in Singapore, let’s dive into what you need to do to register a business as a foreigner.
There are two options. let’s take a look at each of them.
Option 1: Live outside Singapore and run your business with the help of a local partner
This option is rather straightforward which doesn’t require you to apply for an EntrePass (which I will cover more in a minute). But you will have to appoint someone you know here in Singapore as your local company director as it is a requirement under the Singapore Companies Act.
If you have difficulty finding one, you can approach JJ & E or your corporate service provider for assistance to introduce a local to serve as your company nominee director.
Apart from this requirement, the rest of the registration process for a foreigner is the same as that for locals, which is outlined in this article.
Option 2: Stay in Singapore to operate the business
Your company will also need to have at least S$50,000 in paid-up capital and meet at least one of the following requirements:
- Has funding from a government-accredited VC or business angel
- Holds an intellectual property
- Has research collaboration with A*STAR or a university
- Is an incubatee at a government-supported incubator
Please note that the following businesses are not eligible to apply for an EntrePass:
- Coffee shop, hawker centres and foodcourts
- Bars, night clubs, karaoke lounges
- Foot reflexology, massage parlours
- Acupuncture, traditional Chinese medicine, herbal dispensing businesses
- Employment agencies
- Geomancy businesses
I hope you find this article useful and if you require any assistance on company registration matters, feel free to contact JJ & E and their friendly team will be happy to help you.
All the best for your business endeavours!
The above article is contributed by KC Tan, who has been helping small businesses to grow their business since 2008.