Singapore stands as one of the most attractive destinations for entrepreneurs worldwide, thanks to its dynamic economy, business-friendly environment, and exceptional infrastructure. If you're a foreigner eager to establish a business here, you’re making a wise choice. However, starting a company in Singapore as a foreigner requires understanding legalities, meeting compliance requirements, and making informed decisions.
This detailed guide breaks down everything you need to know—from business incorporation to regulatory compliance—to help you confidently navigate the process. Whether you're starting a tech startup, consultancy, or trading business, this user-friendly guide will simplify your journey.
Why Start a Business in Singapore?
Before diving into the step-by-step process, let’s explore why Singapore is a magnet for foreign entrepreneurs:
- Pro-Business Ecosystem: Ranked consistently as one of the easiest places to do business, Singapore has transparent regulations and efficient processes.
- Tax Advantages: With a low corporate tax rate of 17% and various tax incentives, such as exemptions for startups, Singapore provides fertile ground for financial growth.
- Strategic Location: Located in the heart of Southeast Asia, Singapore serves as a gateway to rapidly growing regional markets.
- Skilled Workforce: With access to a highly educated and multilingual workforce, finding talent is never a challenge.
- World-Class Infrastructure: Singapore offers robust digital and physical infrastructure, ensuring seamless operations for businesses of all sizes.
Step 1: Choosing the Right Business Structure
One of the first steps in setting up your business in Singapore is selecting the appropriate business structure. Here are your options:
1. Private Limited Company (Pte Ltd)
This is the most popular choice for foreign entrepreneurs. It offers limited liability, scalability, and a professional image.
2. Sole Proprietorship
Ideal for small-scale businesses, but this structure doesn’t offer protection for personal assets.
3. Limited Liability Partnership (LLP)
Best for professional partnerships, such as law or consulting firms, where liability is shared among partners.
Pro Tip: Most foreigners prefer to incorporate a Private Limited Company because of its flexibility, tax benefits, and separate legal entity status.
Step 2: Understanding the Legal Requirements for Foreigners
Singapore welcomes foreign investors, but there are specific requirements you must meet:
1. Local Director Requirement
Every company must have at least one local director who is a Singapore citizen, Permanent Resident, or Employment Pass holder. If you don’t know anyone who qualifies, you can hire nominee director services.
2. Work Visa Options
If you plan to relocate to Singapore to manage your business, you’ll need to apply for an Employment Pass (EP) or an EntrePass, depending on your business type.
3. Registered Address
You must have a local registered address in Singapore for your business. Virtual office services are a popular choice for startups.
4. Paid-Up Capital
The minimum paid-up capital to register a company in Singapore is just SGD 1. However, raising this amount can enhance your company’s credibility.
Step 3: Registering Your Company with ACRA
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The Accounting and Corporate Regulatory Authority (ACRA) is responsible for company registration in Singapore. Follow these steps:
1. Reserve Your Business Name
Choose a unique name for your company that complies with ACRA’s guidelines. The name must:
- Not infringe on trademarks.
- Not contain offensive terms.
- Be approved by ACRA (takes about 1-2 days).
2. Submit Incorporation Documents
Prepare the following documents:
- Passport copies and proof of address for all foreign directors and shareholders.
- Company Constitution (formerly Memorandum & Articles of Association).
- Signed Consent to Act as Director and Company Secretary.
3. Pay Registration Fees
The total registration fee is SGD 315 for most companies.
4. Receive Your UEN (Unique Entity Number)
Once your application is approved, ACRA will issue your Company Registration Number (UEN) and Certificate of Incorporation.
Step 4: Opening a Corporate Bank Account
A corporate bank account is essential for managing business transactions and meeting tax compliance requirements.
Documents Needed for Account Opening
- Certificate of Incorporation
- Company Constitution
- Identification documents of directors and shareholders
- Proof of business operations (e.g., invoices, contracts)
Singapore’s leading banks, such as DBS, UOB, and OCBC, offer competitive account packages tailored to businesses.
Step 5: Meeting Compliance and Regulatory Requirements
Once your company is incorporated, ongoing compliance is critical to avoid penalties. Here’s what you need to know:
1. Filing Annual Returns
You must file annual returns with ACRA and submit your company’s financial statements.
2. Corporate Tax Filing
File your corporate tax returns with the Inland Revenue Authority of Singapore (IRAS) by November 30 each year. If your company earns more than SGD 1 million annually, you must register for Goods and Services Tax (GST).
3. Employment Compliance
If you hire staff, ensure compliance with CPF (Central Provident Fund) contributions and employment laws under the Employment Act.
4. Business Licenses
Certain industries, such as food and beverage, education, or financial services, require specific licenses to operate.
Step 6: Leveraging Professional Services for a Smooth Setup
Setting up a company in Singapore as a foreigner can be simplified by engaging professional service providers.
How Velarys Can Help In Making Your Business Successful
At Velarys, we specialize in:
- Company Incorporation Services: From name reservation to compliance setup.
- Tax and Accounting Services: Ensuring your business meets all tax regulations.
- Nominee Director Services: Assisting you with the mandatory local director requirement.
- Virtual CFO Services: Providing strategic financial insights to help your business grow.
Step 7: Scaling Your Business for Success
Once your company is operational, focus on scaling effectively. Invest in digital tools, build a strong team, and network within Singapore’s thriving business ecosystem. With the right strategies and support, your business can thrive in Singapore’s competitive landscape.
Conclusion: Your Roadmap to Business Success in Singapore
Starting a company in Singapore as a foreigner is a rewarding journey if approached strategically. By understanding legal requirements, selecting the right business structure, and meeting compliance obligations, you can establish a strong foundation for growth.
Singapore’s pro-business policies, skilled workforce, and strategic location make it the perfect place to launch and grow your venture. With expert guidance from service providers like Velarys, you can simplify the process and focus on scaling your business.
Ready to take the leap? Contact Velarys today to turn your entrepreneurial vision into reality in Singapore’s thriving business environment.