Guide to Starting a Business in Singapore
So you have finally decided to set up a business in Singapore. While you may have heard that starting a business in Singapore is pretty straight forward, it is important to know that there is no shortcut to doing so. Here’s a quick guide to the steps you need to take in order to start your business.
Ready yourself
Starting a business is not an easy feat, let alone running one. It takes courage and commitment. At this point, make sure you are 100% ready to turn your idea into one real business. You have to be passionate about entrepreneurship and motivated enough to create a good strategy to earn through your business.
Prepare your capital
Needless to say, you need money to start your business. Estimate how big your capital must be. To be able to do this, you have to have a clear picture of the size, scope and type of your business. For example, a small sole proprietorship business promoting a service such as private tutoring may use a humble amount for capital. In cases like this, personal saving may suffice. But for bigger ventures such as a brick-and-mortar retail shop or food business, bigger capital is needed.
Your capital can be raised through a number of ways. You can get loans from a bank, invite family and friends to invest, apply for government grants, for example.
Register your business
Incorporating your business is made easier by the Singaporean government. To do so, you have to reserve your company name first. The name should be approved if it is not already taken and does not include vulgarities.
You will also have to decide what type of business entity you plan to incorporate. Your options include company (business as a separate entity from the owner), sole proprietorship (one-man business), and partnership (business is owned by two or more people). Sole proprietorship and partnership businesses are less expensive to register than a company.
Open a business bank account
You have to open a business bank account unless you are a sole proprietor who wishes to receive payments in your personal account. Find a good bank to open your account with. Look into their monthly maintenance fees, minimum initial deposit, and other related fees. Some banks do not have a minimum deposit or fall below fees, others do not require monthly maintenance fees, but make sure to compare your options carefully so you can choose the best bank for your business.
Put up your office
Incorporating a business requires an office address for mailing purposes, but for those that do not require a physical office, you can rent an address from a virtual office. If you plan to use your home as your business office, you have to apply for a home office permit. Make sure that you are not hiring more than two non-resident employees.
For a business with bigger operations, you will need a legitimate office space registered. You can either buy or rent an office space or rent in a coworking space offering business addresses.
Know your employees’ rights and your duties as employer
Make sure you have a good understanding of your responsibilities as an employer and the rights of your employees. Make sure to know details on compensation, leaves, etc. In addition, you will also have to have your Singaporean citizen and PR employees registered with the CPF Board and pay contributions.
File your corporate income tax
Lastly, know your tax duties as a business owner. Take note that the deadline for corporate tax e-filing is in December and that as a Singapore tax-resident company, you have to pay a flat rate of 17%. There is no need to file a tax return if your business has an annual revenue of not more than $5 million and has no chargeable income for the year. This applies to fledgling companies who are yet to break even.
Luckily, there are many legitimate companies that assist people in starting their business in Singapore. Find one that is registered and reputable to make things a lot easier.
