Singapore is a great place for new businesses to start, thanks to its strategic location, world-class infrastructure, political stability, streamlined business processes and notably advantageous tax frameworks, including low business taxes, competitive personal income taxes, attractive tax incentives, and a strong tax treaty network. These factors converge to make Singapore a prime choice for start-ups aiming to establish a presence in the dynamic Asia-Pacific region.
Starting a new business, whether in Singapore or elsewhere, is exciting, but it requires careful planning and detail-focused execution for a successful launch. Building a strong foundation is essential for long-term growth and success irrespective of the industry, be it tech, retail, or professional services.
In this step-by-step guide, we explore 10 essential factors for successfully starting a new business in Singapore.
1. Define Your Business Idea
Clearly define your business idea and identify your target market. Conduct thorough market research to validate your concept and assess if it is feasible. Understanding your unique selling proposition and revenue model is essential for setting the stage for success. If you are new to Singapore, you should check out the Singapore Economic Development Board's (EDB) website for useful information.
2. Choose a Business Structure
Choose the right corporate structure for your venture in Singapore, as it will impact taxes, liability, and compliance. You can choose from: Sole Proprietorship, Partnerships, Companies (Private Limited, Variable Capital, Public), Branch or Representative Office. Trident can assist you in selecting the most appropriate structure, tailored to your specific needs and objectives. Additionally, if needed, Trident can connect you with a legal and tax advisor.
One of Singapore’s appeals is the attractive tax system with a corporate tax rate as low as 17%. The Inland Revenue Authority of Singapore (IRAS) offers tax reliefs to further incentivize business establishment. For instance, the start-up tax exemption grants a 75% exemption on the initial S$100,000 of chargeable income and 50% on the subsequent S$100,000, totalling a maximum exemption of S$125,000 per Year of Assessment. Start-ups must meet specific criteria to qualify for full tax exemption within their first three years. Moreover, various grants, such as Startups Grants and Research & Development Grants, are provided by local government bodies like the EDB to support businesses.
3. Register Your Business Name
Register your business with the Accounting and Corporate Regulatory Authority (ACRA). Choose a name that is unique, non-controversial, and which follows ACRA guidelines. Conduct a thorough name search to verify its availability before proceeding with registration.
4. Secure Necessary Licenses and Permits
Depending on your business activities, you may need different licenses and permits to operate lawfully in Singapore. These could include licenses for specific industries, permits for importing or exporting goods, and approvals from regulatory authorities. Research the relevant requirements and ensure that you obtain all necessary licenses and permits before commencing operations. For example, for a Variable Capital Company, it must be managed by a Permissible Fund Manager.
5. Arrange Business Banking
Choose a reputable bank and open a corporate bank account in the name of your business entity; this will help you keep track of your finances and meet regulatory requirements. Our team can help find the right bank and guide you through the account opening process.
6. Raise Capital
Determine the financial resources required to launch and sustain your business in Singapore. Explore funding options such as personal savings, bank loans, venture capital, government grants, and angel investors. Create a thorough business plan and financial projections to secure investor or lender confidence.
7. Establish Accounting and Bookkeeping Systems
Set up strong accounting and bookkeeping systems to keep track of finances and meeting Singapore’s regulations. You might opt for cloud-based accounting software or hire a professional firm for bookkeeping.
8. Obtain Business Insurance
Protect your business against unforeseen risks by securing appropriate insurance coverage in Singapore, for example general liability insurance, professional indemnity insurance and other relevant policies to safeguard your assets and mitigate potential liabilities. Review your insurance coverage regularly to ensure that it remains adequate and up-to-date.
9. Hire Employees or Contractors
Recruiting the right talent is key in any business. Adherence to Singapore's employment laws and regulations when hiring employees is imperative, as well as ensuring fair compensation and employment benefits for staff. Singapore offers various passes for foreign workers. The Employment Pass (EP) targets professionals with a minimum salary requirement based on qualifications. The S-Pass is for mid-skill workers, also with a salary threshold, levy, and quota considerations for employers hiring S-Pass holders. Outsourcing non-core functions to reputable service providers enhances efficiency and cost-effectiveness. Trident can guide you through the steps and assist you with the application of the relevant work passes for your employees, if required.
10. Create a Marketing Plan
Build a strong presence by crafting a marketing strategy that connects with your target audience. Leverage digital marketing channels, social media platforms, content marketing, and networking opportunities to promote your brand and attract customers.
And Finally...
Maintaining compliance with local regulatory obligations, including filing audited accounts (if required) and updating statutory registers, ensures that your business will remain in good standing. Our team in Singapore offers comprehensive Corporate Secretarial Services to handle administrative tasks, allowing you to focus on your company's core operations.
To learn more about our services, visit our Singapore page . There, you can watch our Singapore Corporate 101 video or explore our detailed Singapore Key Facts. You may also reach out to Singapore Business Development team to discuss your business needs in person.