Complete guide to starting a business in Singapore

Singapore, The Merlion City, has always been dubbed as one of the best places to do business in the world. The city offers strong trade and investment opportunities, including the ease of setting up business in Singapore has made the small island nation an ideal place to start your business. 

There are a number of benefits if you establish an international business HQ, here in Singapore. You will be able to gain benefits such as:

• Singapore’s network of over 50 comprehensive Double Taxation Avoidance Agreements.
• Singapore’s many free trade agreements and the Investment Guarantee Agreements.
• Protection for your ideas and innovations thanks to Singapore’s strict enforcement of its strong intellectual property laws.

Four simple steps to start your business

To help you quickly know what the steps are when establishing and starting your business in Singapore, we have created a step-by-step guide for you.

1. Registering your business

You can easily register your business, including foreign branch offices, online at Bizfile by the Accounting and Corporate Regulatory Authority (ACRA).

But first, you need to reserve a company name for SGD15. Your company name should be approved provided it’s not already taken and doesn’t contain vulgarities. After that, you have to decide what type of business entity you want to incorporate:

• Company (SGD 300) – This type of structure lets you create a business that is separate from the owners. So, any debts and liabilities incurred by the business are separate from the owners’.
• Sole proprietor (SGD 100) – If you’re a one-man-show, this type of business entity is the most fuss-free option. However, it also means you are liable for any debts and liabilities your business incurs. Great if your business doesn’t require much capital, such as if you’re a home-based private tutor.
• Partnership (SGD 100) – This type of structure is for two or more people setting up a business together, and who also agree to be personally liable for the debts and liabilities incurred by the business. If your business is fairly simple and small-scale without many overheads, a partnership might be more convenient than a company.

The most common business entity — a private limited company, is governed by the Singapore Companies Act and must comply with its laws under ACRA and the Inland Revenue Authority of Singapore (IRAS). Designations needed include:

• Company name – must be approved by the ACRA.
• Shareholders – minimum of one.
• Directors – at least one director must reside in Singapore.
• Company Secretary – also must be a Singapore resident.
• Paid-up capital – at least SGD1
• Registered address – a physical office address is required.

Foreign businesses that wish to set up a representative office in Singapore may approach these government agencies:

• Banking, finance, and insurance – Monetary Authority of Singapore.
• Legal – Legal Services Regulatory Authority.
• All other industries – Enterprise Singapore.

2. Opening a business bank account

Unless you’re a sole proprietor and are okay with receiving payments in your personal account, you’ll need to open a business bank account.

When evaluating your options, you’ll want to compare the monthly maintenance fee, as well as any minimum initial deposit or minimum balance/fall below fees. There is a myriad of business accounts in Singapore that you can opt for:

CIMB BusinessGo

CIMB BusinessGo requires and demands the highest initial deposit and minimum balance out of all banking accounts featured in this list; a minimum $30,000 SGD must be deposited and kept as the minimum balance for the account.

Should you be unable to maintain the minimum balance, there will be a fall-below fee of SGD 88 per month, which is also the highest fee charged by banks in Singapore.

However, if you are a startup business, then you can opt for Business Plus Current Account-i, which starts at SGD 3,000 for its minimum deposit and balance with a SGD 20 fall-below fee.

There are also other perks that can be gained through BizChannel@CIMB such as preferential FX rates, free payroll transaction fee, and a fee waiver for the first cheque book.

DBS Business Digital Account

The DBS Business Digital Account is a very well-known business bank account in Singapore. For all accounts transacting in Singapore dollars, it only requires  SGD 1,000 for deposit and minimum balance in the account. This means there will be no fall-below fee.

One of the most attractive perks DBS Business Digital Account has is the Multi-Currency Account that allows you to do transactions in Singapore dollars as well as 12 other different currencies such as Euro, British pounds, Australian dollars, and US dollars. This account, however, requires a slightly higher deposit which is SGD 3,000 for the initial deposit and SGD 10,000 for the minimum balance. You will be charged SGD 35 for the fall-below fee.

Though if you’re a startup company then DBS Business Digital Account can be costly because you will be charged SGD 18 a month to maintain the DBS Business Digital Account. In addition to that, it will charge you SGD 30 for every foreign currency transaction.

OCBC Business Growth Account

The OCBC Business Growth Account requires no initial minimum deposit or balance, it offers an attractive set-up at no cost. You can apply to open an account online and you will receive the account number almost immediately. This certainly helps save a lot of time and you can use the spare time on other matters concerning your business.

Compared to DBS’ Business Digital Account, OCBC Business Growth Account charges a relatively lower monthly fee of SGD 10, and the first two months’ fee will be waived. You also have the option to add an additional multi-currency account set up together with OCBC Business Growth Account. The multi-currency account allows transactions in US dollars and Euros. Both will be charged under the same fee of SGD10  a month.

Maybank Flexibiz Account

If you are prioritising minimisation of cost, the Maybank Flexibiz Account is for you. The account requires an initial deposit of $1,000 SGD and you are not required to have a minimum balance or will be charged a fall-below fee.  It also won’t charge you for monthly fees or annual maintenance fees.

But it does have and charges the highest Forex mark-up rate, almost twice as high as other banks on this list. However, if most of your transactions are exclusively local, then Maybank offers a very compelling low-cost option.

Aspire Digital Business Account

For a more unconventional option, and not the traditional big banks, you will want to look at Aspire Digital Business Account.

To compete with the incumbents, Aspire offers very attractive terms; no minimum deposit, no minimum balance, and no maintenance fee. In addition to these terms, Aspire charges significantly lower foreign transfer fees than local banks thanks to their partnership with Transferwise and offers the only business debit card in Singapore that has 1% cashback for all online marketing and Saas spend.

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3. Finding premises

Since technically you’ll need to include an office address when you are incorporating your business, you will need to either get a physical office space or a virtual office space.

There’s no lack of offices in Singapore considering new businesses are mushrooming in Singapore every single day. Here are some of the office types that you may consider:

Virtual office

After the recent global pandemic, some offices have adopted new working schedules which allow their employees to work remotely, either from home or virtual offices. So if you are planning to adopt the same, then subscribing to a virtual office might be the best option for you and it also offers the lowest cost.

If you are concerned about details such as address; you can get a business address in the CBD, without having to pay for a physical office.

Virtual offices are a great option for businesses, especially the ones that are still in process of setting up or small startups. It enables you to incorporate a company with an address in Singapore, print business cards, and start prospecting activities without having to actually rent an office space.

Serviced office

If you have a budget to spare and prefer actual physical office space for you and your team to work in, you might want to consider serviced office space.

A serviced office is a fully furnished office managed and maintained by a dedicated team as a part of the monthly cost. Serviced office allows you to enjoy shared services such as admin, receptionist, or concierge as well as a professional IT team.

In addition, most serviced offices also provide a shared pantry, breakout area, and meeting rooms that you can rent for an hour. If you are wondering about the cost, serviced offices offer extremely flexible leases; you can rent an office for two and upgrade once you have a larger team. You also can choose the lease terms according to your business needs, so it can be as short as two weeks to two years.

Co-working space

Co-working spaces are very much similar to serviced offices. The only difference is that they lean more toward hot desks instead of private office rooms. It also offers more breakout areas and community spaces.

Typically, co-working spaces offer a range of options such as hot desks, dedicated desks, and private rooms. You can purchase day passes to use your workspace on selected days of the month.

Co-working spaces might not be suitable for a company that values privacy and confidentiality, but if your company is not such and doesn’t mind the vibrant and open work environment plus and want the no-moving-in hassle, then co-working spaces might just work for you.

Enterprise suites

If you are not a big fan of the hassle involved during moving in and want to get work as soon as you can then enterprise suites might be the one you are looking for.

Enterprise suites are offices cut out from a larger floor plate, each with its own entrance. Commonly, enterprise suite space sizes range from 500 square feet to 1,000 square feet and are furnished with the basics such as air conditioning, lighting, carpets, and electrical sockets.

The terms are identical to that of residential terms, unlike co-working spaces and serviced offices, where both are more akin to hotels than residential.

Typically, enterprise suites are run by a building landlord or a serviced office provider. Usually, premium-grade buildings will not cut out offices that are smaller than 1,000 square feet. In such circumstances, the said space will have a master tenant who is in the shared office space industry.

Enterprise suites are more suitable for companies that have outgrown their serviced offices or co-working spaces or have more than 5 employees.

Shophouse office

Shophouse offices provide a more creative and unconventional work environment. Shophouse offices are usually located and can be found in the central area of Singapore. The shophouse offices in the following locations are the most sought after by companies; Boat Quay, Amoy Street, Telok Ayer, Tanjong Pagar, and Chinatown.

The lease terms for shophouse offices are similar to regular office spaces which is 2 to 3 years. The rent is usually cheaper by 30% or 50% from regular and prime office spaces. So it is a great option for companies that want to rent a physical office space but still want to save.

B1 light industrial building office space

B1 industrial building office could save you around half the price of a similar commercial grade office in Singapore.

Some industrial buildings offer and have a corporate image comparable to those of Grade A buildings in the CBD, they also come with security gantries, office lobby, elevators, and ceiling-to-floor windows. The cost is usually around SG 4 to SGD 6 per square foot.

While other industrial buildings will not have some fanciful features and are usually located not so near to the MRT stations. They would cost approximately around $2.00 to $4.00 per square foot.

However, the cheap prices do come with their restrictions; all businesses that want to operate on a B1 office space will have to abide by URA’s (Urban Redevelopment Authority) rules; ensure your business in one of the approved businesses, and adhere to the rule 60-40 space allocation.

In addition, B1 industrial buildings are usually located outside and far from the central business area. The buildings and environments will have a more industrial feel than an urban and city feel to it. The buildings also only offer concrete flooring and exposed ceilings by default. So if you have proper flooring and ceiling then you will have to renovate it.

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B2 industrial building or warehouse space

If your company is leaning towards more production and industrial then a B2 industrial building or warehouse space would be a great option. The perk is that you will have a lot of space for a cheap price.

The trade-off is the almost bare condition of these buildings; no air conditioning, no lights, and maybe some noise.

These buildings are specifically for production and manufacturing businesses only according to Singapore’s regulations.

Business park

Business parks are usually home businesses involved in high-tech, R&D, and knowledge-intensive activities. The lower rental price has encouraged many qualified businesses in Singapore to move their businesses to a business park.

The business parks are located in the East, West, and Central region of Singapore.

Conventional office space

The most common and straightforward office type in Singapore or anywhere else in the world. Conventional spaces in Singapore are expected to have a presentable office lobby area, security guards, reception desks, and elevators.

The corporate office lease term in Singapore is usually 3 years and with the option to renew for another 3 years.

Most of these conventional offices can be found in the CBD area as well as in every commercial hub across Singapore.

Home office

As the name suggests, home office is when you turn a section or the whole house into your office. This is usually for companies that allow their employees to work from home as long as they have a good Internet connection to ensure smooth communication via video conferencing.

However, before you actually commit to any of the above spaces, you need to ask yourself these questions to make the right decision.

• Do I need a physical office space
• What’s my headcount going to be
• How long would this space hold up to my growing business
• Do I need storage, production, or manufacturing space
• Is there R&D involved

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4. Hire a team

For a business to succeed, it requires teamwork and so hiring a team should be your top priority. Singapore has been facing a serious talent crunch lately, especially in the technology industry. But fear not, as there are various avenues for you to secure your first and ongoing hires.

• Recruitment agencies
• Job boards
• Community & networking
• Referrals

However, before you proceed with your hiring, here are some of the things you need to know before hiring in Singapore.

• Employment Act – Applicable to both Singapore and Foreign Employees as defined by the Act

In Singapore, the relationship between an employer and an employee is usually regulated and tied by a contract, and the primary legislation governing the employment and dismissal of employees is the Singapore Employment Act (Chapter 91).

• Employment of Foreign Manpower Act – Applicable to All Foreigners Employed in Singapore

As for foreigners’ employment in Singapore, it is regulated by the Employment of Foreign Manpower Act (EFMA). Some employment laws also apply to foreigners regardless of the contract clauses. Such as compensation for work-related injuries, maternity benefits, and childcare leaves for parents.

All foreigners require work visas granted by Singapore’s Ministry of Manpower (MOM) before they start and are allowed to work for an employer in Singapore. These work visas can be either work permits, S Pass, or an Employment Pass (EP).

• Singapore Employment Contract

In general, and commonly an employment contract in Singapore must include; the date of commencement, salary details, duties and job profiles, working hours, leaves detail, termination clauses and notice period, confidentiality clauses, and governing law.

Statutory Filings per Employee

• Central Provident Fund (CPF)

CPF contributions are payable for each permanent Singapore citizen. Employers are required to pay both the employer’s and employee’s monthly CPF contributions which are determined by the CPF rates and the employee’s salary. Employers may deduct the employee’s share from their salary.

• Skills Development Levy (SDL)

The Skill Development Levy (SDL) is used to fund workforce upgrading programmes and provide training grants to employers. Employers are required to make SDL contributions for all employees (local and foreign); casual, part-time, and temporary employees. This must be paid by the employers and cannot and must not be deducted from employees’ shares.

• Foreign Workers Levy

Singapore’s companies are required to pay Foreign Worker Levy (FWL) for their Work Permit and S Pass holders. This levy was introduced by the Singapore Government to regulate foreign manpower numbers.

The amount of FWL to be paid is determined by the sector the employer/company belongs to, and the educational qualifications and skills of the worker.

Work visas for foreign workers

• • Employment Pass (EP)

For roles such as executives and managers, or specialised jobs. With a fixed monthly salary of at least $4,500 SGD monthly for younger candidates and higher for older candidates and with acceptable professional and educational qualifications.

• S Pass

Usually issued to mid-level foreign workers such as technicians.

• Work Permit

Issued to basic-skilled workers from an approved country, which depends on the sector the worker is going to be employed in.

Other business processes

• Licences and permits – Some business activities require approval or a licence from government authorities. Examples include private schools, video companies, travel agencies, liquor distributors, money lenders, banks, financial advisers, childcare centres, importers, wholesalers, and retailers of liquor.
• Registered office hours – You must register your office address and hours (minimum of three hours per weekday).
• Registration number – The business registration number issued by ACRA must be on all your documents used for official business communications.
• Customs registration – If your business involves importing or exporting, you must register your company with Singapore customs.
• Goods and services tax registration – Goods and Services Tax (GST) is a tax on the supply of goods and services in Singapore and on the import of goods into Singapore. You must register for GST if your annual taxable revenue exceeds S$1 million per year.

Useful resources for your business

Here you can find more info and resources from the government:

• GoBusiness Singapore – Your one-stop shop for all the licences, permits, government grants, and e-services you might need.
• EDB’s 2021 Guide to Setting Up Your Business in Singapore – Downloadable PDF guide targeted at foreigners looking to set up a business in Singapore.
• IRAS’s New Company Start-Up Kit – Guides you through your first corporate tax return.
• StartupSG – Government website with programmes and grants targeted at startup founders, incubators and investors.

Looking for a business payment solution for your company?

For startups and young businesses, every step is filled with many uncertainties. But one key thing that does not change is the belief and motivation to survive and the constant need to balance cost and reinvest the profits.

Instarem for Business can help support your finances by providing a simple and efficient way to pay and get paid as well as receive payments in multiple currencies.

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*Disclaimer: This article is intended for informational purposes only. All details are accurate at the time of publishing. Instarem has no affiliation or relationship with products or vendors mentioned.