Quick Guide for Foreigners: Starting a Business in Singapore

Singapore stands as a global hub for entrepreneurship, offering unparalleled opportunities for businesses to thrive. Foreign entrepreneurs are drawn to the city’s many advantages, including its: 

• Pro-Business Environment: Singapore boasts a competitive corporate tax rate capped at 17%, complemented by attractive tax incentives for new businesses. These factors create an ideal climate for profitability and sustainable growth.
• Strategic Geographical Location: Situated in the heart of Southeast Asia, the country provides seamless access to a market of over 600 million people. Its world-class logistics infrastructure and extensive trade networks make it a hub for regional and global expansion.
• Supportive Government Initiatives: The government actively supports businesses through grants, funding programmes, and tailored incentives. These initiatives drive innovation, enhance productivity, and support companies in expanding to global markets.

While these plus points make the country a prime destination, starting a business in Singapore as a foreigner requires navigating specific regulations and procedures. Let’s explore the essential steps and considerations to help you establish your venture with confidence in this dynamic business centre. 

1. Business Registration Process

The first step in starting a business in Singapore as a foreigner is to register your company with the Accounting and Corporate Regulatory Authority (ACRA). This process involves several key steps:

• • Choosing a Business Structure: Foreigners can opt for various business structures, including: 
    • Sole Proprietorship (SP): This is the simplest structure, suitable for small businesses owned by a single individual.
    • Limited Liability Partnerships (LLP): An LLP involves two or more individuals who share ownership and responsibilities.
    • Private Limited Company (Pte Ltd): This is the most popular choice among foreign investors, offering limited liability and a separate legal entity.
  • Name Reservation: Before registering, you must choose a unique company name and reserve it with ACRA. The name should not be identical or too similar to existing businesses, and it must not be offensive or misleading.
  • Submitting Registration Documents: Submit the required forms and documents, including the company’s constitution, a declaration of solvency, and the identity documents of the directors and shareholders.
  • Obtaining Necessary Licences: Depending on the nature of your business, you may need additional licences or permits from relevant authorities. For example, businesses in sectors such as food and beverage, education, or healthcare often require specific regulatory approvals.

Once your application is approved, you will receive a Certificate of Incorporation, which officially marks the establishment of your company in Singapore.

2. Legal and Compliance Requirements

Singapore is known for its strict adherence to laws and regulations, which is important for maintaining a stable business environment. As a foreign entrepreneur, you must familiarise yourself with the following legal and compliance requirements:

• • Business Laws: All businesses must comply with the Companies Act and other relevant regulations. It’s essential to understand your obligations regarding corporate governance, including holding annual general meetings (AGMs) and maintaining proper financial records.
  • Employment Regulations: If you plan to hire employees, you must comply with the Employment Act, which governs aspects such as working hours, salaries, and employee benefits. Additionally, obtaining work permits for foreign employees is necessary, and these permits are issued based on various criteria, including the qualifications and skill levels of the applicants.
  • Data Protection: Compliance with the Personal Data Protection Act (PDPA) is mandatory, which governs the collection, use, and disclosure of personal data. Businesses must implement measures to safeguard customer information.

Staying updated with regulatory changes and ensuring compliance helps you avoid penalties and maintain a good standing when you start a business in Singapore as a foreigner.

3. Financial Considerations

Financial planning is a critical component of starting a business in Singapore as a foreigner. Here are some essential financial aspects to consider:

• • Capital Requirements: For a private limited company, the minimum paid-up capital required is SGD 1. However, depending on your business model and operational requirements, you may need to inject more capital.
  • Taxation: Singapore offers a competitive tax regime, with a corporate tax rate of 17%. However, newly incorporated companies can benefit from tax exemptions on the first SGD 200,000 of chargeable income for the first three consecutive years. Understanding tax obligations and filing requirements is crucial for financial compliance.
  • Banking: Opening a corporate bank account is necessary for your business operations. Most banks in Singapore require the company’s incorporation documents, a resolution to open an account, and identification documents from the directors and shareholders. It’s advisable to shop around for banking options that suit your business needs, including account fees and services.

4. Company Formation Requirements

As part of the company registration process in Singapore, foreign entrepreneurs are required to appoint specific roles to ensure compliance with local regulations and Singapore’s company law. These include: 

• Shareholders: To register a company in Singapore, you need at least one shareholder, while private companies can have up to 50. A constitution detailing essential information such as share capital and equity distribution is mandatory. 
• Director: Singapore law stipulates that your company must have a minimum of one director who resides in Singapore. This director can be a foreign national or a local citizen. If you plan to relocate to Singapore, you can fulfil this requirement personally. Alternatively, if you do not have a resident director, you may engage a nominee director to meet the legal obligations.
• Company Secretary: Every business must appoint a company secretary who resides in Singapore. The company secretary is responsible for maintaining necessary documents, issuing company resolutions, and managing regulatory filings. Many businesses opt for a company secretarial service, which can help foreign entrepreneurs navigate the complexities of compliance without the administrative burden.
• Local Address: A registered local address is required for your business. This cannot be a P.O. box, as the address is used for receiving official communications and legal notices from authorities. If you do not require office space, you can use the address of your nominee director, allowing you to keep all relevant documents at that location without needing a physical office.

Essentially, starting a business in Singapore as a foreigner involves navigating a well-defined but thorough process. By understanding the processes and regulation requirements, you can set a strong foundation for your business in one of Asia’s most vibrant economies.

If you’re ready to embark on your entrepreneurial journey in Singapore, let Prime Immigration, an immigration agency in Singapore guide you every step of the way. Our experienced immigration consultants are dedicated to helping you understand the intricacies of the business landscape and ensure that your registration process runs smoothly. 

Contact our immigration consultancy today to learn more about how we can assist you in launching your business in Singapore with confidence!