Singapore stands out as a global business and immigration hub, attracting foreign entrepreneurs seeking not just commercial growth but also long-term residency through Permanent Residency (PR). For many, starting a business in Singapore offers a dual benefit—access to a world-class economy and a viable path toward PR.
While these plus points make Singapore a prime destination, starting a business in Singapore as a foreigner requires navigating specific regulations and procedures. Let’s explore how setting up a business as a foreigner in Singapore can contribute meaningfully to your PR goals while building a strong and compliant business presence.
Why Singapore Appeals to Foreign Entrepreneurs
Singapore offers an ecosystem uniquely positioned for global business success, with several standout advantages:
Pro-Business Climate
Singapore maintains a low corporate tax rate of 17%, with additional exemptions for startups. Its efficient incorporation process and strong legal framework make it easy to start and operate a business.
Strategic Location
Located at the heart of Southeast Asia, Singapore offers unmatched connectivity to key Asian markets. It’s a natural headquarters for businesses aiming to expand regionally.
Government Support
Numerous grants, startup accelerators, and pro-innovation schemes support entrepreneurs in tech, sustainability, healthcare, and financial services. These initiatives reflect Singapore’s forward-thinking economic policy and openness to foreign innovation.
How Starting a Business in Singapore Supports Your PR Application
Beyond economic benefits, running a successful, compliant business strengthens your PR profile in several ways:
Economic Contribution
A profitable business shows that you are adding value to Singapore’s economy through taxes, job creation, and sustainable growth.
Local Employment
Hiring Singaporeans and contributing to their CPF showcases integration into the local community and social responsibility.
Financial Stability
Strong and consistent business revenue, alongside clean tax filings, supports your case as a financially independent and contributing resident.
Long-Term Commitment
ICA values individuals who show they are here to build, not just to profit. A business anchored in local operations demonstrates your intent to invest in Singapore’s future.
Understanding The 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.
Foreigners typically set up a Private Limited Company, the most preferred business entity in Singapore. Here’s how to go about it:
- Choose a Unique Company Name and reserve it with ACRA
- Appoint at least one resident director (can be a Singapore citizen, PR, or valid pass holder)
- Engage a Company Secretary within six months of incorporation
- Secure a Registered Local Address
- File Incorporation Documents including Constitution, shareholders’ details, and director particulars
Once completed, you will receive a Certificate of Incorporation and can proceed with operational setup.
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.
Financial Considerations When Setting Up a Business in Singapore
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.
Mandatory Compliance for Foreign-Owned Companies
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.
Prime immigration has since expanded our service offerings to include corporate secretarial services. Find out more here.
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.
Tax Filings
Ensure timely filing of Corporate Income Tax (CIT) and GST (if applicable). Reliable tax history signals financial credibility.
Employment Pass or EntrePass
To manage your company in Singapore, you must hold a valid employment pass or EntrePass. This pass should reflect your active, ongoing involvement in the business.
Case Study: From Business Setup to PR Approval
A Chinese entrepreneur started a digital consultancy firm in Singapore. Within one year, the business showed steady growth and employed two local staff. With a clean tax record and an Employment Pass tied to the company, he submitted a PR application under the PTS (Professionals/Technical Personnel and Skilled Workers) scheme. Twelve months later, he received PR approval.
This case illustrates how combining sound business operations with active contribution to the local economy can fast-track your journey to becoming a Singapore Permanent Resident.
Start Your Business and PR Journey with Confidence
Singapore offers more than business potential; it offers a future. By setting up a company aligned with national priorities and maintaining full compliance, you build a compelling case for PR.
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!