You have heard that setting up a business in Singapore is the way to go for any business owners or individuals that has an interest into Asia. You heard and read that it is one of the easiest markets to establish your presence fairly quickly, and the requirements are a walk in the park. However, it seems that the process is more complicated than what you read in the internet. Whether you are an existing business owner thinking about expanding into Singapore, a startup entrepreneur taking that first step, or an individual who is planning to relocate and move your life to Singapore, the factors to consider and steps you need to take are absolutely different.
Well in general the applicable rules don’t change, but how you engagement the relevant authorities and critical 3rd parties (e.g. banks) involved are very different.
Let’s take a look on how the journey or experience changes depending on who you are.
Setting up a business in Singapore
When it comes to setting up a business in Singapore, there are a couple of basic rules to take note of. It really doesn’t matter whether you are a business owner or a startup entrepreneur as you will need to meet these rules regardless.
Number one, you need to appoint a company secretary. Technically this can be anyone who is a resident here in Singapore but appointing someone without the right knowledge or skills set can make it an absolute compliance nightmare for your business. First, this appointment holder needs to ensure that the right documentations are in place and properly done up during the incorporation process. He or she will need to know the proceedings to act as a company secretary and ensure the company is compliant against all regulating rules and authorities (e.g. ACRA & IRAS). Consider outsourcing this role to a professional services firm, the cost impact is way cheaper comparing to employing a full-time employee to do this inhouse.
Next, we look at the appointment of the resident director. If you are not local, identify a friend, a family member or anyone you can trust who holds a Singaporean citizenship or a permanent resident status, and appoint them to be the resident director of your Singapore company. Please take note as this individual can exercise full authority to act or on behalf using the company’s name as a director. Almost every company outsource this role to a professional services firm at the initial stage for at least a couple of months to a few years, then appoint an employee, someone they can trust or even themselves to be the resident director if their status qualifies. Yes, this role can be outsourced but get yourself better protected by engaging a licensed professional services firm to be safe.
A business address will be required during the point of incorporation, this has to be a commercial address, not some random residential address. If you already owned an established business and already have some business dealings lining up, you can consider renting a physical office and use that same address for the registration. But if you are an entrepreneur, don’t hurry to look for an office and lease the place down without having any business, you can rent an address at an annual fee which is way more cost efficient than renting down a physical office space. You hear me right, you don’t need a physical office, engage a professional services firm and ask for the “Registered Office” or Registered Address” services. They usually charge an annual fee which can be pretty negligible at times, but it also depends on where the address is. The more prime the location, the higher the charges. Some providers coupled their mail & admin services to this annual charge, ask around and see what’s the best offer you can get.
Now let’s talk about getting a bank account setup. When setting up a business in Singapore, you can only legally operate when you have that corporate bank account setup. This is quite a critical step since you will need it to receive or make payment, pay salaries and all miscellaneous charges incurred when the entity is fully operational. Singapore is one of the first country in the world to allow the opening of a bank account remotely without you having to be physically here in the country. Well understanding it is not a challenge for established businesses to book a first class flight into the country to meet with the banks, for an entrepreneur where cost is a concern, this helps better facilitate their business plans ahead and not worry about having to travel down physically to meet a banker and sign papers in person.
That’s right, video conferences and electronic signatures are accepted here by almost all local banks and those are enough to get you through the KYC checks that the banks will conduct when they review your application. But beware, such fluidity doesn’t mean everything is straight forward, well it can be but not knowing exactly what to do will bring you into a spiral of email threads, long waiting helpdesk calls and re-doing your application over and over again until you get it right. Fortunately, there is light at the end of the tunnel, that is to engage a professional services firm. Commonly, each firm have established some form of relationship with the banks and have a good understanding of what is required to get your bank account open. Ask them for advice or just throw them the job.
In summary these are the things you need to look at when setting up a business in Singapore.
- Appoint a company secretary
- Appoint a resident director
- Get ready a registered business address
- Open up a corporate bank account
- Talk to a reliable and licensed professional services firm
For sure this is not the end of the journey for you, there are the usual accounting and tax work you need to prepare along the way when your business starts to take flight. Again, don’t hurry yourself to employ resources to get these managed, the smartest way to do it is to outsource to a professional services firm until your commercial activities hit critical volume, or whenever it makes sense from a cost perspective for you to manage it inhouse.
As you can see, the journey can be simple if you get the right help. Of course feel free to try sorting these out yourselves, there are people who have done so successfully but not before they get beaten up by the pitfalls and knowledge gaps, wasting time and a lot of money in fact before they get themselves to where they want to be, not worth it I would say.