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Starting a Business in Singapore

Kimberley Kan

Singapore has long been known as an attractive place to set up a business. Its strategic location, strong regulatory framework, business-friendly policies, and political stability make it ideal for entrepreneurs as well as established businesses looking for an Asia hub. But like any location, there are some Singapore-specific advantages and considerations to be aware of before you set up shop. 

Getting Set Up

Singapore offers three primary business structures: Private Limited Companies (the most popular), Sole Proprietorships, and Limited Liability Partnerships. Foreigners can retain 100% ownership of their companies here, but must appoint a Singapore resident director. 

You register your business through Accounting and Corporate Regulatory Authority (ACRA). Applicants must choose a company name, register a corporate secretary, and share details of your directors and shareholders among other requirements. Paid up capital varies by industry, with small businesses only requiring S$1. 

Taxes

Singapore’s corporate tax rate of 17%, which applies to both foreign and local companies, is one of its most appealing and compelling business-friendly policies. This flat, or one-tier, rate makes it very competitive in ASEAN. For qualifying companies, Singapore also offers a three-year start-up tax exemption on the first S$200,000/yr of chargeable income.

Companies that have an annual turnover of S$1 million or more are required to register for Goods and Services Tax (GST). Depending on where you’ve lived or traveled previously, you can equate GST to VAT (Value-Added Tax). The current GST rate is 9%, and the government has said there will be no further increase in this amount before 2030. 

Business owners are also required to pay Singaporean and permanent resident employees’ Central Provident Fund (CPF) contributions. Both employers and employees pay into this forced savings program, which has parallels to Social Security in the United States. This is an added cost to familiarize yourself with before deciding to establish your business here.

Talent

Singapore is blessed with a highly educated local population making it very competitive. Its universities are considered some of the best in the world, and there are many tech, pharmaceutical, and R&D companies based here that draw from this talent pool. 

In addition to the local population, there are also about 800,00 foreigners working in Singapore in 2024 (excluding domestic workers and those working in construction, maritime shipyards, and process). The Ministry of Manpower (MOM) has specific requirements for fair employment practices, and also oversees work and employment pass requirements for hiring foreign talent. 

It is important to note that when hiring for a job, positions must be posted on MyCareersFuture for a minimum of 14 days before submitting a foreigner’s employment pass application. 

Next Steps

Avrio has worked with many clients establishing both large- and small-scale businesses in Singapore, whether it’s to launch a new venture, create an alternative source of income, or bring a product or service to market. Our depth of experience and local knowledge make us a trusted advisor as you begin, extend, or exit your business in Singapore. 


Sources:

https://www.mom.gov.sg/foreign-workforce-numbers


This material is intended for educational and informational purposes only. It is not intended to provide specific advice or recommendations for any individual. Additionally, you should consult with your Financial Advisor, Tax Advisor, or Attorney on your specific situation. The views expressed in the material are that of the author and do not necessarily reflect those of any market, regulatory body, State or Federal Agency, or Association. All efforts have been made to report or share true and accurate information. However, the information may become materially outdated or otherwise rendered incorrect due to subsequent new research or other changes, without notice. The author nor the firm are able to always verify the content from third-party sources. For additional information about the firm, please visit the MAS Website at https://www.mas.gov.sg/  and the SEC Website at www.adviserinfo.sec.gov. For a copy of the firm's ADV Part 2 Brochure, please contact us at info@avriowealth.com.