As a growing hub of Asia-Pacific economic might, Singapore offers locals and foreigners the prospect of a high return for new and existing business ventures. However, for anyone unaccustomed to the country’s specific regulations and processes it can be difficult to know where to begin.
How to Register
The World Bank recently listed Singapore as the world’s most ‘business-friendly’ economy, and the registration process is simple. New businesses need to register with ACRA, the Accounting and Corporate Regulatory Authority, who provide an online application platform called BizFile.
Typical fees for registration total no more than 60 SGD (£30 or $50 approx.), and applications are generally processed within 15 minutes of the fee being paid. However, a wait of up to 2 months can be incurred if the application needs to be sent to one of the ministries for review.
Limited companies are the most common start-up, and there are several requirements to be adhered to for local or foreign investors:
- One director must be a Singapore resident, or hold a valid Employment Pass (EP)
- One corporate secretary must be a Singapore resident
- A local registered address is a requirement – a PO Box is not enough
- There is no minimum amount of paid-up capital required to register
?For foreign investors, a network of over 50 Double Taxation Avoidance Agreements is enhanced by many Investment Guarantee Agreements and free trade agreements. The corporate tax rate remains a mere 17%, and businesses pay 0% on the first £50,000 of profit.
There are four key tax dates:
- Individual Income Tax Return for Sole Proprietors: 15th April
- Partnership Income Tax Return: 15th April
- Companies Tax Return: 30th November
- Companies Estimated Chargeable Income: 3 Months after accounting period ends
Security Issues and Resolutions
Singapore has one of the lowest crime rates of the Asia Pacific region, but businesses still need to address three key security areas: protection of physical assets, protection of information and intellectual property rights and staff safety.
Many of the security issues faced in Singapore can be resolved through a robust security management process. Outsourcing things like things like on- and offline security monitoring systems is rapidly becoming the industry standard for small and medium businesses who lack the resources to fully protect themselves.
Laws and Regulations
The IFC and World Bank website contains a full list of civil procedure codes and laws surrounding the matters of business and credit, commercial and company, labour, land and building, securities, tax and trade. The Singapore Statutes Online website is also useful as it contains a full list of statutes. It is important to thoroughly educate yourself prior to making this commitment in order to avoid any potential confusion or mistakes when business is up and running.
Similarly, foreign investors would do well to verse themselves in local etiquette as Singapore has a reputation for strictly enforcing penalties for even minor infractions. Business Insider recently published an article listing the strictest laws and customs, which not only affect business travellers but everyone who enters the country. These include everything from rules on the importation of chewing gum and public displays of affection, to public transport laws and using your right hand rather than your left. An additional section of the article covers considerations which are particularly important for anyone conducting business in the country.
Licenses and Permits
Broadly speaking, there are three types of license depending on your business model:
- Compulsory: i.e. for travel agencies, liquor distributors and moneylenders
- Occupational: for businesses offering certifiable professional services, such as doctors or financial planners
- Business activity: for those selling controlled goods, exporting goods or hiring foreign worker.
It is vital that you obtain the correct license for your business to avoid running into problems from the get go. Full information can be found on EnterpriseOne.gov.sg, where the Online Business Licensing Service (OBLS) contains a full list of licenses by sector and business activity.
Money Matters: Currencies and Cards
Singapore has developed a robust payment services industry, with a wide range of options. All major credit cards are accepted in Singapore, and visitors and traders have the added advantage of being able to spend Australian Dollars, US Dollars, Yen and Pound Sterling at many of the major shopping centres. This does mean, however, that business owners should consider offering the most up to date credit and debit card processing services to avoid falling behind their competitors by having slow or substandard payment options.
Starting a business in Singapore is really a seamless process, provided you have your ear to the ground and avoid certain forms of business that simply don’t offer much of a return. Private gyms, for example, are likely to go bust simply because many housing complexes already have them, and the interior decorator market is saturated. Nevertheless, as an international trade hub, investing in business in Singapore is a lucrative proposition if handled in the correct way. The best thing to do is arm yourself with as much knowledge as possible before even considering to take the plunge.
Jamie is doing a diploma in business management. He wants to set up his own App.