Guide to starting a business in Singapore in 2024

You need a concrete business plan and strategy before you initiate the registration process.

If you already have an idea, it’s time to review and develop that. You will need a clear business plan in order to attract investors and hire directors.

Ask yourself the following questions to see if your idea is well developed already.

• Do you have a solution that caters to a particular need or concern of customers?

• Who are your direct competitors, and how different is your solution from theirs?

• Is your solution specific to a certain niche and caters to a certain group of audience, or is it common for everyone?

• Are your idea and goals achievable and viable?

Once you have a business plan, you are ready to convince the investors to offer funds for starting a small business in Singapore. There are multiple ways in which you can raise capital for your business.

Here are some of the most common ways to raise funds in Singapore.

Depending on how you want to establish authority in your leadership and split the decision-making responsibilities and risks, you will have to choose a business structure.

Any business that operates in Singapore should be registered with ACRA as one of the entities below.

Starting a business in Singapore requires legal registration of your business online. It hardly takes more than a few days to register your business for both local and international registrants.

Local registrants can use the online registration portal of ACRA, and foreign registrants can hire a local registration agency.

The registration steps and required documents slightly differ for foreigners. 

The incorporation process for starting a business in Singapore includes registering your office location.

The address will be used in letterheads, email signatures, and other official documents of your company.

Some criteria that your office location should meet are,

• The office address cannot be a P.O. box.

• The office should be a physical location in Singapore.

• The chosen office location should have your office that runs at least 5 hours a day during all business days.

The companies are allowed to have either a physical office with administrative personnel or a virtual office.

Companies operating overseas that don’t need an actual office and focus on reducing overhead costs can consider choosing a virtual office.

Locals, under the home office scheme, are allowed to register their home address as the office address.

However, your privacy will get compromised as your address will be visible in records to the public. For this reason, business owners prefer having a registered office even if they run their business from home.

For foreigners, they can make use of corporate service providers who will help with office address service.

Along with providing you a registered address, they will also upload and transfer the mails your address receives.

They can also use the company secretary provider’s office address as the business' registered address.

The best part about opening a business in Singapore is that you can create branding and attract leads for your business online, and operate it pretty much from anywhere.

This step involves doing the following steps that mold your business and brand identity. 

• Creating your business logo, slogans, and other unique identification factors.

• Answering questions that separate you from your competitors and identifying unique value propositions 

• Customer and market research, analysing market needs, pain points, customer requirements, etc.

• Carving your presence through social media, websites, blogs, and other physical and digital media.

You might have done the research part way before incorporating your company.

But you are in a different place now as your business is no longer an idea that exists on paper. Hence, doing it again with your team is essential.

Certain business activities in Singapore require you to obtain permission or licenses from the appropriate authorities.

You can apply for industry-specific licenses if you have already registered your business in Singapore.

Following are the types of licenses that are currently distributed to the specified activities next to it.

If you are setting up a business in Singapore that falls under any of the following categories, you will be required to obtain a permit before initiating your operations.

A smart business person knows how they should never mix up business and personal finances. It’s not only a lazy practice but unprofessional too.

You will need a business bank account to separate your business money management from personal financing.

Open your business bank account with a business or corporate bank section when you are setting up a business in Singapore. Banks like DBS, HSBC, Standard Chartered, Barclays, and other private banks help create bank accounts for entrepreneurs starting a business in Singapore.

As we have seen earlier, Singapore strives to provide better financial facilities and growth opportunities to startups with sophisticated and high-end products/services.

If you fall under one of these categories, you will be eligible for Singapore grants offered by the related departments of the Singapore government.

Check your eligibility and apply at the earliest as it is highly competitive to get through.

Some of the government initiatives that power startups in Singapore on their way to becoming a Unicorn are:

A Singapore-incorporated company is supposed to hire an auditor within three months from the date of incorporation and a company secretary within six months.

When you are opening a business in Singapore, you will also hire other important members who will act as pillars in the early stages of your business. 

When hiring and employing people in Singapore, as an employer, you must adhere to certain regulations laid down by the government to protect the workers' rights.

Following are some of the responsibilities and obligations of an employer while hiring an employee in Singapore.

• While hiring an employee. the employer is required to create an employment contract that carries the terms and conditions between the employer and employee. This contract should contain the package information, employee benefits, expected code of conduct, designation, duration of employment, and other details specific to the position.

• You should also note that the employer is responsible for the CPF contribution of the employee where the employers’ contribution percentage is 20%, capped at SGD 10,200 per year. 

• According to the Income-Tax Act, the employer must report their employees' monthly wages. The employer should fill the form IR8A, Appendix 8A, and Appendix 8B every year around March 1. The employer does not need to hold income taxes of employees as it’s the responsibility of the employee to pay taxes by mid-April every year.

• You are allowed to hire both part-time and full-time employees and can even employ students as interns.

• The minimum age eligible for employment is 17 years, but children of age 13 to 17 are also permitted, depending on the type of the job. The retirement age is 62 years.

• You are allowed to hire foreign professionals who are the skilled, unskilled, and semi-skilled workforce.

After opening a business in Singapore and registering it, it’s time to work on creating your online presence.

This means creating your online portfolio, website, social media profiles, and other marketing collateral. In today’s digital era, everyone has a phone, and even a basic purchase starts and ends with a phone. 

Having an online presence is important to cut through the noise and draw in more visitors. 

Receive reviews from your customers and publish them on your website as testimonials. Get reviews on Google and other review sites that customers from your niche regularly check in.

Start being active in responding to reviews and customers’ general inquiries. Just having a website and social media profile alone won’t fetch you results.

You should have a workable SEO, content, and digital marketing strategy to target and attract the right people. If organic targeting takes time, strategize and execute search engine and social media ads.

After setting up a business in Singapore and getting that up and running, you still have some tasks to finish.

Once you see revenue, you will have to register at IRAS and start paying taxes for the past financial year (year of assessment).

Any company in Singapore is taxed at 17% on their tax-applicable income. Known as a tax haven country, Singapore offers many tax benefits and exclusions, especially for new startups with a low revenue range.

The company is exempted from paying tax on the first SGD 100,000 chargeable income. And there is a 50% tax exemption available on your next SGD 200,000.

You can avail of this exemption within the first three consecutive years of your incorporation.

Here is how your business will register and pay taxes for the first time in Singapore.

• Before filing taxes, every company must declare their Estimated Chargeable Income (ECI) before filing taxes. IRAS will send this notification before the end of the financial year approaches.

• Those who do qualify for a tax exemption are not required to file the ECI, and they won’t receive a notification either.

• Many new companies won’t close their year-end accounts around the end of their first fiscal year. Hence, the notifications will be only sent during the next year. But the company is required to file the ECI for its first and second financial years after its incorporation.

• After this step, IRAS will send you the next notification to file the form C-S or Form C-S lite 

Suggested read: Best business bank account for eCommerce in Singapore

When you are ready to kickstart your journey as an entrepreneur and in the process of setting up a business in Singapore, you need to concentrate on the above mentioned things.

While most of them are conventional and don’t require second opinions, choosing your business account and banking services isn’t one of them.

Many entrepreneurs, when they are starting a small business in Singapore, think that they don’t need a business account as their transactions are low in numbers and value. 

What they forget to foresee is the increasing demand for professional financial services as they grow. We have already seen the impact of not using a business account for small business banking in Singapore.

So, how can you get yourself a business account effortlessly whilst starting a business in Singapore? 

Here is the solution. Leading startups and enterprisers prefer Volopay for their business account and money management needs.

What looks like low transactions might shoot up anytime and even include international payments.

Volopay will support your business in any stage with accounts payable management, budgeting, credit borrowing, and lots more. 

It has multi-currency accounts that let you store funds in different currencies that you will send payments in. You can schedule payments, create and use n number of virtual corporate cards, reimburse your employees, and do anything related to payments seamlessly. 

Cash flow management is one of the pressing concerns of new business owners. When you are starting a business in Singapore, you still look for financial assistance from multiple sources.

The odds of overspending and going overboard with money management are high during the beginning stage of your business.

You need a suite like Volopay that helps you keep track of payments, create data-centric budgets, and control all your finances in one spot.

You achieve financial freedom and organization that contributes to your business success and growth.