Singapore is a vibrant and prosperous nation with a favorable business environment. As a result, it is no surprise that many foreign entrepreneurs and investors flock to the city-state to establish and grow their businesses.
However, starting a business as a foreigner in Singapore can be a daunting process, with many legal and regulatory requirements to navigate.
In this guide, we will provide a comprehensive overview of the key steps involved in starting a business in Singapore as a foreigner and help you get your venture off the ground.
From company registration to obtaining the necessary permits and licenses, we have you covered. So, if you are a foreigner thinking of starting a business in Singapore, read on to learn more.
Registering a Business in Singapore With the Accounting and Corporate Regulatory Authority (ACRA)
Foreigners can own 100% shareholding of the company that they incorporate in Singapore, making it an attractive offer for potential foreign directors eyeing the vibrant city-state.
However, it is important to note that non-residents and foreigners cannot register a Singapore business themselves.
If you wish to run a business in Singapore, you must register it with ACRA via an authorised registered filing agent. ACRA is the national regulator of business entities, public accountants, and corporate service providers in Singapore.
The agency is responsible for the registration and regulation of businesses and companies operating in Singapore, as well as the enforcement of regulatory and compliance requirements.
ACRA ensures that businesses and companies in Singapore operate in a transparent and ethical manner, and comply with all local laws and regulations.
We walk you through the steps of incorporating a business in Singapore as a foreigner below:
Step 1: Choosing a Business Entity
There are 4 key business entities in Singapore, namely:
- Private Limited Company (Pte Ltd) – most common
- Limited Partnership (LP)
- Limited Liability Partnership (LLP)
- Sole Proprietorship or Partnership – least common
Business Entity Requirements for a Private Limited Company
Here are the five key requirements to setup the most common entity:
- 1 Shareholder (individual or corporate entity)
- 1 Resident Director
- 1 Company Secretary
- Initial paid-up share capital of at least S$1
- A physical Singapore registered office address
Getting a Nominee Director for Your Company in Singapore
All Singapore-incorporated businesses must have at least 1 resident director for compliance reasons.
If you wish to incorporate a business in Singapore as a foreigner, you can appoint a nominee director, or local director, to fulfil the requirements under the Companies Act.
A nominee director must be a Singapore citizen or Permanent Resident with a permanent Singapore address. This director is typically appointed for compliance and regulatory requirements and does not partake in company operations.
Here are some of the main responsibilities of a nominee director:
- Fulfill statutory requirements: The nominee director is responsible for ensuring that the company complies with all applicable laws and regulations. This includes filing annual returns and submitting tax documents on time
- Represent the company: The nominee director acts as the company’s representative and is responsible for making important decisions related to the business, such as signing contracts and agreements
- Maintain proper records: The nominee director is responsible for ensuring that all company records, including financial records, meeting minutes, and resolutions, are properly documented and kept up-to-date
- Safeguard the company’s interests: The nominee director is obligated to act in the best interests of the company at all times and to protect the company’s assets and reputation
Step 2: Choosing a Company Name
You must decide on a company name and turn in a name application through ACRA’s online company registration and filing platform BizFile+.
The company name you propose must not be similar to an existing name or have banned and unwelcome words.
After your application is approved, you can incorporate your business and must do so within 120 days from the date that your business name is approved.
Note that under the Company Act, your company name and business registration number (UEN) must be indicated in all business correspondences such as invoices.
In addition, registering your company name does not give you the exclusive right or intellectual property (IP) rights to it. It is not the equivalent of registering a trademark, which must be done by filing a separate application with the Intellectual Property Office of Singapore (IPOS).
In some cases, such as for the incorporation of a real estate firm, your name application will be referred to the Council for Estate Agencies (CEA).
Referred applications may require 14 to 60 days for processing.
Other referral authorities include, but are not limited to;
- Enterprise Singapore
- Board of Architects (BOA) Singapore
- Singapore Tourism Board (STB)
- The Monetary Authority of Singapore (MAS)
Understanding SSIC Codes
When you submit a name application, you must detail your business activities by choosing the Singapore Standard Industrial Classification (SSIC) code with the greatest relevancy.
The SSIC is the national standard that categorises different business fields for administrative purposes. There are 3 key objectives of this code:
- To enable Singapore to remain updated on global standards, nascent businesses, and economic trends
- Helping ACRA discern the businesses that require a licence to carry out business activities
- Assisting IRAS to determine if the business can benefit from tax incentives
You can use ACRA’s free SSIC search tool to find the code that best corresponds to your business activities.
We detail the different primary characteristics of each company type:
Step 3: Filing Requirements
There are certain filing requirements that companies must adhere to, which are choosing a financial year end, holding an AGM, and filing annual returns.
Choosing a Financial Year End (FYE)
In Singapore, you must choose an FYE when you incorporate a business. This date represents the final day of your business’ accounting period.
The period is the acknowledged interval required to finish an entire business accounting cycle. This period of time provides insight into a business’ profitability on an ongoing basis.
Accounting periods can be either:
- 12 months
- Over 52 weeks
While you can choose any date as your business’ FYE, it is important to do so carefully because it will decide the due dates of your corporate taxes and filings yearly.
Private companies must hold their Annual General Meetings (AGMs) within 6 months after their FYE and file their annual returns within 7 months.
Holding an AGM and Filing Annual Returns
Companies must hold an AGM unless exempted. The AGM makes sure that shareholders are regularly updated on the firm’s financial position and overall direction.
Private companies in Singapore, including dormant and inactive companies, must file their annual return timely.
Even if your business is IRAS-exempted from filing your income tax return, you must still file your annual return with ACRA if your operating status is “live”.
Step 4: Choosing Key Personnel
After settling your filing requirements, you must designate key personnel, or officers, in your company. Companies in Singapore must appoint at least 1 resident company director and 1 company secretary.
Other company officers in Singapore also include:
- Auditor (mandatory unless exempted)
- Chief Executive Officer (optional)
- Managing Director (optional)
Before you submit your company incorporation application, you must obtain these details of the officers you are appointing:
- Full name and NRIC
- Contact details, including their phone number and email address
- Residential address
Step 5: Getting a Registered Business Address
In Singapore, it is mandatory for companies to establish a local registered office that serves as the designated location for receiving official correspondence and documents, as well as keeping the required registers in accordance with the law.
All registered companies in Singapore are obligated to maintain a registered office address, which must be a physical address and cannot be a PO Box.
In certain cases, businesses are permitted to use a residential address as their registered office, depending on the specific type of business.
Related Read: 43 Ways To Improve Your Company Business Profitability
Unique Entity Number (UEN)
After completing your Singapore business registration, you will be issued a system-generated UEN. It is a business identification number that business entities must use when transacting with government bodies.
Special UEN (SUN)
ACRA also provides a Special UEN service that enables you to reserve a UEN you prefer from an approved list at an additional cost.
Things to Do Post-Incorporation
Opening a Business Bank Account
It is highly encouraged that you open a corporate bank account. It will help you separate your business transactions from your personal transactions.
It will also enable you to track your company’s cash flows, income, and expenses, which will be useful when filing your company income tax returns.
Business Bank Account Requirements
Most banks in Singapore have these requirements:
- Both account signatories and majority directors must be present in person in Singapore to sign paperwork at the time of opening a business bank account. Some banks may allow documents-signing at one of their overseas branches or before a Notary Public
- Supporting documents required (some banks may require additional documents on a case-by-case basis):
|Completed Corporate Account Opening Forms||Must be signed by authorised signatories according to the board resolution|
|Board of Directors Resolution||Must sanction the account opening and the account signatories and prepared by company secretary|
|Certified True Copy of Resolution||Must sanction the account opening and account signatories. Most banks have their own format so you only need to sign it|
||Must be certified by one of the directors or the company secretary|
|Certified True Copies of Passport (or Singapore IC) and Proof of Residential Address of the Directors, Signatories, and Ultimate Beneficiary Owners||If you stay in Singapore, you only need to bring the original copies. The bank will make a copy|
There are several local banks that allow for corporate bank account opening services:
- DBS Bank
- UOB Bank
- OCBC Bank
Foreign owners can also choose to set up a corporate bank account with these digital banks in Singapore, subject to requirements:
- ANEXT (Ant Group)
- Green Link Digital Bank (Greenland Group)
- Trust Bank (Standard Chartered and FairPrice Group)
These are some neobanks in Singapore that offer business banking services:
Every registered business in Singapore is allocated a CorpPass, which is a corporate digital identity for businesses. It enables individuals acting on a company’s behalf to transact with government entities online, such as ACRA.
Registered officers of a company, such as the director or company secretary, have to log onto the site with the UEN and their SingPass account.
If your business entity has a turnover of over S$1 million over a continuous 12-month period, or if you reasonably expect it to do so over the next 12 months, it is usually compulsory to register for GST.
The GST rate is currently 8% and will increase to 9% on 1st January 2024.
GST registration can be done with the Inland Revenue Authority of Singapore (IRAS) through BizFile+.
After starting your company in Singapore, you must hire an auditor within 3 months and a company secretary within 6 months from the incorporation date.
Getting Local Talent
These are the steps to follow to hire local employees:
- Apply for a CPF Submission Number
- Do up a contract that complies with the Singapore Employment Act
- Obtain Work Injury Compensation Insurance for specific employee groups via MOM’s appointed insurers
Getting Foreign Talent
You can also employ foreign employees through these steps:
- Setting up a work pass account
- Get familiar with the rules on employing foreign employees, including:
- Dependency ceiling ratio
- Foreign worker levy (FWL) for a work permit and S-Pass
- Fair Consideration Framework (FCF) for Employment Pass (EP) and S-Pass
- Apply for and get the suitable work passes for foreign employees using Work Permit Online (WPOL) or Employment Pass Online (EPOL)
- You must also file taxes for your employees annually
Related Read: An Overview of the ONE, EP, and PEP Work Passes
Renting a Commercial Space
You may require a commercial space for your business depending on its nature. For example, you could rent an office space for a corporate firm, or a retail space if you run a retail business.
You can refer to GoBusiness’ e-Advisor function to check whether a property is approved for your intended use.
Getting a Business Licence
Certain types of business activities may necessitate the procurement of a business licence. Getting a business licence in Singapore is a straightforward process.
The first step is to determine the type of licence required based on the nature of your business. The Singapore government provides a comprehensive online platform called GoBusiness Licensing that allows these features to be performed:
- Licence application
- Payment of licence-related fees
- The simultaneous application of multiple licences
- Updating, termination, and renewal of licences
The portal offers a user-friendly interface and a step-by-step guide that takes you through the application process.
Some licences may require additional documentation, such as permits and approvals from other government agencies. Once you have submitted your application, you can track its status and receive updates via email or SMS.
The processing time for a business licence application in Singapore typically ranges from 14 to 60 days, depending on the type of licence and the complexity of the application.
Types of Business Licences
There are several types of business licences in Singapore, and the specific type of licence required will depend on the nature of the business activity. Some of the most common types of licences include:
- Trade-specific Licences – Required for specific trades, such as food establishments, massage parlours, hotels, childcare centres, and travel agencies
- Financial Licences – Required for businesses in the financial sector, such as banks, fund management firms, and insurance companies
- Special Licences – Required for businesses involved in activities that pose potential risks to public health or safety, such as the import and storage of hazardous substances or the handling of radioactive materials
It is important to note that some businesses may require multiple licenses, depending on the nature of their activities. The Singapore government provides a comprehensive guide to business licenses.
Businesses can consult the GoBusiness Licensing portal to determine the specific licenses required for their business.
Managing Your Intellectual Property (IP)
As a business owner, it is necessary to protect your IP, such as trademarks, designs, and patents, which account for a large share of your business value.
Protecting and managing your IP can support your business in its growth. A robust IP portfolio can also be a way to open up commercial opportunities for your business, such as licensing, R&D collaborations, and more.
It is typically recommended to file for IP protection before you launch a product or service. If you wish to file it in multiple countries, the time-saving Madrid Protocol is a good choice to do so.
Applying for Business Grants
The Singapore government offers various business grants for business owners to leverage. You must fulfil these eligibility requirements:
- Business owner must be a Singaporean or PR (hence, foreigners must obtain permanent residency before applying for a grant)
- Business must be Singapore-based
- Business must have at least 30% of local shareholding
Accessing Investors in Singapore
Singapore boasts a thriving startup ecosystem, teeming with a multitude of venture capital firms and angel investors who are enthusiastic about funding prospective ventures.
One way to get access to these investors is to attend startup events and meetups, which provide an opportunity to network with investors and pitch your business idea.
Another way is to leverage online platforms and directories that connect entrepreneurs with investors. It is also important to have a solid business plan and a pitch deck that clearly communicates your idea and its potential for growth and profitability.
With the right strategy and preparation, entrepreneurs can secure funding from investors in Singapore.
Start Your Business in Singapore With InCorp
As a newcomer, it can be confusing to work your way through the various processes involved in setting up your business, and even the post-incorporation requirements.
This is where we come in. As dedicated company setup specialists, our experts are highly knowledgeable and have the required experience to ensure a seamless experience for you.
Contact us today to find out more!
FAQs About Setting Up a Business in Singapore as Foreign Director
- The price varies depending on several factors. Contact us to find out more about the fees with our transparent advice!
- It is relatively easy to start or expand a business to Singapore. In fact, if all of the documents required are presented, you can incorporate a company in 1-2 days.
- When it comes to starting a business, Singapore offers numerous advantages, such as:
- A strong and stable economy
- Access to a pool of skilled workers
- Favourable tax laws
- Global market integration