Are you about to embark on a new journey in your career? Perhaps, you’re thinking of starting your own business in Singapore. Well, that sounds great since starting a business here has its perks but setting up a business is a whole other discussion.
Back then, starting a business required a long process with a lot of paperwork. Today, many people have the dream to become their own boss – that means doing what they love and working at their own hours. With the help of technology too, setting up a company has never been more seamless and simple.
Yet, there are some who are still unaware of how businesses are set up in the city. For this reason, we believe that you should consider these questions before you even go there. It’ll help you expand on how to set up your business the right way!
Here are frequently asked questions answered.
1. How long does it take to incorporate my business in Singapore?
Your company can be set up in a matter of hours or weeks, depending on the information you’ve provided – like the name of the company, the type of business you’re running, and your details.
Before you register a company, you’ll have to come up with a name for the company. If there are no objections to the name, the process can be completed in less than an hour. But, if the name is duplicated or contains vulgar/sensitive words, the name approval process might delay to a few days or weeks. So, choose wisely!
On another note, local citizens might get their businesses approved much quicker compared to foreigners. Hence, it’s a quick and easy process for them. With a foreigner, a few additional details are needed from them which requires signatures hence the process might take even longer.
2. How much do I need to invest to start my company?
This question depends on whether you’re local or a foreigner. For locals, permanent residents (PR) or Employment Pass holders, you will need a minimum of SGD1 paid-up capital during the registration. Foreign entrepreneurs who are moving their business to Singapore under the Employment Pass will be eligible for this too.
If you’re not under any of these passes, the minimum paid-up capital is SGD50,000 for foreigners for EntrePass holders.
3. What do you mean by paid-up capital?
Paid-up capital is the sum of the total funds contributed to a company by shareholders. This means that a shareholder would invest in a share(s) based on their confidence that the business is able to generate enough profits and attract enough revenue to support their investments. This provides shareholders with an incentive to invest and take part in the growth of the company.
4. Will my company need a local resident director?
Yes, you would need at least 1 local to act as a director in your company. This is a requirement otherwise the Ministry of Manpower (MOM) will not approve your application.
Here lies the qualification for the local director:
– He/she must be a Singaporean citizen
– He/she can also be a Permanent Resident
– He/she is under the Employment Pass or Entre Pass under the same company
– He/she must be above 18 years of age
If you know someone who is Singaporean and available to act as a local director in your company, then this will be an added advantage to you. Otherwise, you can apply for a work visa (Employment Pass or EntrePass) under your new entity and become the local director. That works too! But it’s always better to have someone who is a local resident.
5. Where do I go to apply for my visa and register my business in Singapore?
To apply for a visa, you will need to visit the Ministry of Manpower. To register your business, please visit the ACRA website.
6. If I’m a local director, can I also act as a secretary of my company?
Unfortunately, you can’t. You must appoint someone else who is either a local, a PR, or an Employment Pass or Dependent Pass holder to qualify for this role. She/he must be someone who is knowledgeable and possesses an understanding of the Singapore Companies Act.
7. Can a foreign individual or foreign company be 100% shareholder of the company?
Yes. According to the Singapore Companies Act, foreigners or foreign entities have every right to secure 100% ownership of their company. There aren’t any restrictions on the type of business activities that a company pursues in unless illegal, of course. As a foreigner, you wouldn’t need special approvals either.
8. What are the risks involved in starting a new company incorporation in Singapore?
That’s an important question and it depends on the type of business you’re running.
Start-ups in Singapore face challenges in getting adequate funding due to a limited number of investors. This lack of investment capital results in start-ups having to face more burdens in operating costs, which can lead to a lack of revenue. It is important to focus on generating high revenues in order to build up a strong revenue and sustain the company.
Other risks involved in running a new company in Singapore include difficulty securing suitable staff due to the tight competition in the local market, and not having enough funds to meet the costs of operating, such as staff costs and rent.
Well, this is only the highlight of the possible risks your company might succumb to. You will need to research more if you want your company to thrive accordingly.
9. What type of business can I run in Singapore as a foreigner?
As a foreigner, you can only register for a Private Limited company (Pte Ltd). It’s also said to be the best of three types of businesses (Private, Public and Sole Entrepreneurship) in Singapore. This is because it provides the best protection for personal assets, enables capital to be used quickly for growth, and makes it easy for foreign professionals to set up a business.
10. Anything else I should know about to prepare better?
There are certain things that Singapore citizens should know before starting a business, like:
A company incorporation in Singapore has many benefits, from retaining personal assets to enjoying an attractive tax regime. It can provide the ideal vehicle for a start-up business in Singapore. The benefits of incorporation are excellent, but are lost if one does not have adequate knowledge about the rules and regulations.
Ready to start a company in Singapore?
If you would like to know more or have any questions, don’t hesitate to chat with us at EBOS. We will happily assist you in every step of the way!