Setting up a business is a lot like building a house: you want to build it on a solid foundation (rock, as opposed to sand), and you want to use sturdy materials (brick, and not straw). When you set up your business the right way, you sidestep shaky ground and shady shortcuts—in short, you set up your business for long-term success and smooth sailing Year of Assessment after Year of Assessment.
Even with the nation’s well-deserved international reputation for ease of doing business, Singapore Company Registration can get complicated without someone showing you the ropes. Making mistakes at any juncture can cost you not just money but also your chances of establishing your business.
Having helped some 150 businesses get off to a successful start, we’d like to share five ways of making sure you start your business right or for carrying out your company incorporation in Singapore.
1. Know the government bodies you’ll have to deal with.
1) ACRA or the Accounting and Corporate Regulatory Authority regulates Singapore’s businesses, public accountants and corporate service providers.
3) MAS or the Monetary Authority of Singapore is the go-to for setting up businesses in the banking, finance and insurance industries.
4) Legal Services Regulatory Authority is where you apply for your new entity licence or registration if you’re looking to put up a law firm.
2. Learn the laws that govern businesses in Singapore.
1) GST. Once your business generates annual taxable revenue of over SGD1 million a year, you need to register for the Goods and Services Tax, which taxes goods and services in Singapore as well as goods imported into the country.
2) CPF. Employers and Singapore citizens and permanent residents are required by law to set aside a percentage of their monthly salaries for their Central Provident Fund pensions.
3) Manpower. When you start hiring employees for your new business, be aware that there are laws in place for their protection, as well as regulations covering the engagement of foreign workers. You can find helpful information at MOM or at SMEPortal.sg.
4) Registration number. Your ACRA-issued business registration number needs to be on all of your official business communications.
5) Customs. If you are involved in import-export activities, you need to register with Singapore Customs.
3. Take it one step at a time.
1) Choose the business structure that’s right for your business: will you be a sole proprietorship, a partnership or a company? You’ll also have to choose a business address—you can get help picking out the right location for your business at the Economic Development Board (EDB). Once you settle on your address, have your office location approved at the Urban Redevelopment Authority (URA).
2) Check whether you have all the eligibility requirements, which varies according to the business structure you have chosen as well as whether you are Singapore citizen or permanent resident, or a foreigner.
3) Name your business according to the government’s rules, which stipulate that your name readily expresses what your business is all about, and doesn’t sound too much like an existing business’ name. Your business name must also not contain any vulgar or obscene words, or words related to any of Singapore’s national symbols. Check for the availability of the business name you have in mind here.
4) Get the special licences and permits your business needs, particularly if it is one of or is similar to any of the following:
– Childcare centre
– Financial advisor
– Liquor distributor or retailer
– Private school
– Travel agency
– Video company
5) Open your company bank account at a locally incorporated bank or an offshore bank. Most banks in Singapore offer services that are especially for businesses such as trade financing, treasury & market services, international fund transfers, business insurance and liquidity management services. Get 6 Options for Opening A Business Bank Account in Singapore to help you choose the right bank here.
4. Keep an eye out for these pitfalls.
1) Choosing the wrong business structure. It’s never a good idea to rush into your choice of a business structure, which is a choice that should be based on a careful consideration of your goals and circumstances and an analysis of your market and industry. Remember that the structure you choose will determine the benefits your business can receive and the requirements you will have to meet.
2) Dilly-dallying over your registration. How do you know that someone else isn’t already applying for the business name you want? By taking prompt, decisive action when starting your business, you save yourself stress as well as time.
3) Skipping steps and glossing over requirements. The government issues its requirements for your own good, to help make sure that your business is viable for the long term. Miss one document or skip one step, and you’ll be looking at a fine at best or even imprisonment, at worst. In a word, don’t even think about it, especially in Singapore.
4) Missing out on tax incentives. Being aware of the benefits you are entitled to can help your business save. Qualifying startups, for instance, can get tax relief during their first three assessment years on the first SGD100,000 of their normal chargeable income. Under the Not Ordinarily Resident (NOR) Scheme, foreign business owners only have to pay income tax on income earned during their stay in Singapore.
5) Choosing a bad business name. If you change your mind and want to change your business name, know that it involves a long and drawn out process, not to mention the expense.
5. Get help from the pro’s.
Perhaps the most common pitfall you can come across when starting your business in Singapore is striking out on your own. Not that this is an impossible undertaking, but the entire process could be so much simpler and much more sure when you have the guidance and the advice of a corporate services provider with the requisite experience and expertise.
If you are from overseas looking to set up a business here, you are actually required to engage a local firm to register your company for you. And what better way is there to make sure that all the requirements are met, no steps are skipped, and nothing important is missed?
We’ve started our own businesses here in Singapore, and we’ve helped other business owners like you get started, too. We use our localised knowledge to help clients set up in the most effective and efficient manner without having to worry about engaging the wrong vendors and going against certain local laws that they might be unaware of.