Got a great business idea? Thinking of starting your own business?
Starting a business takes more than just having a great idea. Oftentimes, you might get discouraged and even throw in the towel when you encounter various roadblocks required to get your business up and running.
One of the best things about starting a business in Singapore is that the government has done a lot to support entrepreneurs. Singapore has quickly become one of the most ideal places to start a business in Asia.
This doesn’t mean that entrepreneurs setting up base in Singapore don’t have to go through the many administrative tasks of setting up a business. These are unavoidable.
However, understanding what needs to be done and how it can be done ensures that as an entrepreneur, you can hit the ground running.
If you’re thinking of starting your own business in Singapore but are at a crossroads, this article might just be able to help!
From Idea To Reality
Taking an idea and turning it into a reality isn’t as easy as many people would like to believe. A lot of work goes from taking an idea from paper to business.
The following are steps that an entrepreneur with a great idea should consider when starting their own business in Singapore.
1. Have A Plan
Before anything can get started, it is important for you, as the entrepreneur to give your idea some structure.
You should sit down and turn the idea over in your mind. Having a pen and paper handy is advisable.
This first step is crucial for turning an idea into a business plan. The idea stops being just a thought and becomes an actual business concept that can be implemented.
This may require some research into the niche market that you are seeking to establish your business.
Some questions you should ask yourselves at this point include:
- What product or service do you wish to provide?
- Is this service or product in demand?
- Are there opportunities for this product or service?
Researching the industry will help in fine tuning the idea. If you require any changes, it is best to do so at this early stage to determine the best approach to the market.
2. Decide On A Business Structure
There are various options for entrepreneurs setting up businesses in Singapore.
Some of these include:
- Sole proprietorship
- Limited Liability Company
- Branch office
- Representative office
The structure chosen will impact various aspects of the business.
For example, a Limited Liability Company protects the business owner from personal liability. It is therefore important for you to carefully consider and take your time when determining the most suitable structure for their company.
Private limited company is one of the best options for new companies starting out in Singapore. This structure protects the entrepreneur’s personal assets.
Liability is limited to the company’s assets. This is the safest legal entity structure. This structure also gives the company more credibility when dealing with banks, customers and investors. It also offers greater flexibility and sustainability because of the increased options for growth and transfer of ownership.
Another great benefit of registering as a Limited Liability Company is for tax purposes. The government of Singapore strives to encourage entrepreneurs in establishing businesses. They provide various tax incentives and discounts for new private companies. At least one shareholder and one director are required for the registration of a limited liability company. This can be the same person.
However, if you are a foreigner setting up a company in Singapore, at least one director must be a Singaporean citizen or permanent resident. If entrepreneurs don’t know any Singaporean at the time of setting up their companies as foreigners in Singapore, they can opt for incorporation services from specialised agencies.
These agencies provide packages that include a nominated director and secretary if you choose. These services offer entrepreneurs the benefit of years of experience. Entrepreneurs can seek their advice on expenses and even their business plan. They are therefore, a great option for those who want to hit the ground running.
3. Selecting A Business Name
The selection of a business name is an important step in the registration of a company.
The business name will be the brand of the company. It is what customers, investors and other stakeholders will use to identify the company. It is therefore important to choose the right name for the business.
While not a requirement, it is best to choose a business name that reflects the company’s business philosophy.
Entrepreneurs should refrain from choosing a name that is similar or sounds like names of other existing companies. The business name should be unique and therefore, make their business stand out.
It is also important to avoid obscene names. Entrepreneurs should be sure to check the meaning of the name that they are considering, ensuring that it is not offensive.
After you are done choosing your name, registration will take a few days as names are checked against the database of currently registered companies.
If you wish to expedite the process, you can carry out a name check before proceeding to register your company. This helps to avoid the possibility of issues with the name and the delays that arise from resolving these issues.
Aside from registering the business name, entrepreneurs must also reserve a domain name for their website. It is best to match the domain name to the business name.
However, this isn’t always possible. Entrepreneurs should try to match the business name as closely as possible.
Hiring an incorporation service can help ensure that all this is done without much of a fuss. These services will carry out thorough name check to help save time.
4. Get The Right Location
One of the requirements for registering a business in Singapore is providing a Singaporean address.
Providing the right address is important as any official documents from relevant government agencies will be sent to this address.
Entrepreneurs will need to get approval from the Urban Redevelopment Authority to use the premises for commercial purposes.
Some companies opt to use a flat or house as their business address to save on overhead costs. In cases where an HDB flat is used, approval must be sought from the Housing Development Board. If a rented house will be used, permission must be sought from the Home Office Scheme (HOS).
It is important to note that various restrictions are applied depending on the premises chosen for the business.
For example, if your company seeks to use a rented house as an office and obtains approval through the HOS, the company will not be allowed to employ more than 2 foreign workers. They will also not be allowed to use signs such as boards to reveal the presence of their business.
Choosing a premise can be a tough decision for an entrepreneur. Those who are finding it difficult to decide can consult an incorporation service for assistance.
Many of these service providers offer free consultation. Therefore, those who are not ready to commit to full support in incorporation can get an assessment and valuable advice for free.
5. Get Your Business License
To run a business in Singapore, your company must have the required licensing.
You can either seek the licensing during the registration process or after your company is incorporated.
To avoid any issues, it is advisable to study the legal requirements of setting up and running the business in the niche that you are interested in.
Those that are unsure about what licensing is required can refer to the Licence One portal. This is the portal through which businesses can apply for all the required licenses.
Business owners can therefore check for the licenses required for their business. In many cases, businesses require several licenses and from different authorities. Business owners must ensure they have the required licenses to avoid issues with the different agencies.
6. Get Visas
Entrepreneurs starting up a business in Singapore as foreigners may have a foreign team that they would like to bring along with them. These may include executives, managers or professionals with specialized skills. It is important to ensure that every person on the team has the required paperwork.
Foreigners can work in Singapore with a valid Employment Pass which is usually issued for 1 or 2 years. If renewal is required, it can be done several times as long as the holder still meets the requirements.
The Employment Pass can only be applied for when the process of registering the business has been completed. Entrepreneurs will therefore, need to travel to Singapore to complete the incorporation process. This can be done with an EntrePass.
Registering a company and applying for visas as a foreigner can be a complex and tedious task. Foreigners are advised to seek out the services of an incorporation and migration company.
These services can see the entrepreneur from the business idea stage right through the incorporation of the company and relocation of staff.
7. Register The Company
Now that you’ve completed all the above points and have all documents are ready, your business can be registered.
Registration of businesses in Singapore is done through BiZFile. This is the Accounting and Corporate Regulatory Authority’s (ACRA) online portal where they provide valuable resources for entrepreneurs on various aspects of incorporating companies as well as their administration.
Registration of companies can be a tedious and complex task. It is important for you to ensure that you get everything right in registration to avoid problems later.
Those that are unfamiliar with the process or find these tasks onerous can opt to hire a professional incorporation company. They will be able to provide support to entrepreneurs through every stage of registration.
Starting a business in Singapore is by no means an easy feat. However, you should not let that deter you from building the business of your dreams. If you require any additional funding, our business loans can help.