Starting a new small business in Singapore can offer a lot of advantages for foreign entrepreneurs wishing to penetrate the market. The country’s low tax rate and position at the center of global trade makes it an attractive place for new businesses. Compared to other countries, Singapore also boasts lax requirements for foreign investment. However, foreign entrepreneurs are still subject to a few requirements before they can create their business success stories. Here are the steps to starting a small business in Singapore as a foreign entrepreneur.
Follow Local Incorporation Standards
Foreign business owners looking to start a business in Singapore must understand local laws regarding incorporation. Foreigners can only incorporate a sole proprietorship, a partnership, or a limited liability corporation. A sole proprietorship has the most simple incorporation process. This entity can be created by a single individual who does not reside in Singapore. Meanwhile, the partnership structure includes between 2 and 20 members and partners. Limited liability corporations are more complicated to set up and are subject to more regulation but have no member limits. Those who wish to start a new business in Singapore must understand the different incorporation standards.
Apply For An Entrepass
Once the type of business being started is decided, entrepreneurs must apply for a permit to do business in Singapore known as an Entrepass. Applying for an Entrepass requires a valid passport, a business plan, and any documentation that would qualify the applicant as one of three categories. These categories are innovators, entrepreneurs, or investors. However, businesses that do not fall under these categories may not be available for foreign entrepreneurs. Despite these limitations, applying for and receiving an Entrepass is the easiest way for foreigners to do business in Singapore.
Create A Business Bank Account
Like a USA startup, entrepreneurs should create a business bank account during the incorporation process in order to separate their personal and corporate finances. This can help to make the accounting and taxation processes easier. This also helps to protect the entrepreneur’s personal liability if the business incurs any debts. Many banks in Singapore require a trustee to be personally present to create a bank account, although this does not mean they must live in Singapore. If multiple business partners wish to have joint control of this account they must all be present for its creation. Foreign entrepreneurs wishing to start a business in Singapore should open a business bank account with a local bank.
Obtain A Registered Office Address
Similar to domestic businesses, entrepreneurs wishing to start a business in Singapore must have a registered office address. This acts as the official place of business for the corporation and is where tax documentation is sent. Foreigners living in Singapore may use their own residential address if their business is under a certain size. Others living outside of Singapore must hire a registered agent and use their address. Having a registered address allows you to receive official documents and business correspondence.
Secure Government Investment
The Singapore government offers a number of grants and initiatives to assist new business owners in starting their businesses. The Economic Development Board offers insights in to Singapore, networking opportunities, and development investments for qualifying business owners looking to complete their business startup checklist. For example, entrepreneurs can qualify for grants if they found a technology company, train employees in the use of technical equipment, or improve efficiency in manufacturing techniques. New business owners should research the grants offered by the government to see if their business can qualify for any.
Starting a small business in Singapore can be a lucrative option for foreign entrepreneurs as long as they follow Singaporean law. Business owners should start by deciding which type of business they want to incorporate. During or after this process, they should apply for an Entrepass, a type of visa designed for foreign business owners. They should create a business bank account in order to comply with local tax laws. A registered address should be created or obtained as it is a requirement to doing business in Singapore. Finally, the Singaporean government offers a wealth of grants and resources that new business owners should take advantage of. Following these steps will allow foreign entrepreneurs in Singapore to easily set up their new small business.