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Why do businesses choose to set up in the small island nation of Singapore?
The World Citizenship Report places Singapore at the top of its list of the 10 best countries to do business.
And it’s no surprise – apart from economic growth shifting from the West to Asia, South America, and the Middle East, the city-state is also renowned for its business-friendly environment.
In an article posted on Business Insider, Saranya Kapur writes, “Apart from its business-friendly laws and flexible immigration policy, one big reason why Singapore has dominated the list for so long is its simple method for filing taxes.”
Singapore is also regarded as a buzzing gateway to the world’s fast-growing consumer markets in China and the rest of the Asia-Pacific for businesses and investors.
Find out more about why Singapore is such a great place to do business, and 3 steps to doing so!
Related Read: Why Singapore is the #1 location in Asia to Set Up Company »
Why is Singapore a Popular Business Destination?
Singapore has been a prominent location for companies worldwide to start their businesses in the region. There is little wonder considering these key influencing factors:
Low Taxes
Singapore has a low corporate income tax rate of 17%. Companies can also benefit from tax exemptions and reductions if they are new startups.
Some examples include the Start-Up Tax Exemption Scheme and Partial Tax Exemption Scheme.
You can also enjoy its robust network of Double Taxation Avoidance Agreements (DTAA) to access relief from double taxation. It will be useful if you are looking at business opportunities and investments beyond Singapore.
High-Quality Infrastructure
The Lion City is well-established as a regional infrastructure hub and ranks first on the CMS Infrastructure Index.
It has a strong infrastructure ecosystem that includes transportation, connectivity, political stability, network of advisory services, and investment policies.
Ease of Doing Business
It is simple to start a business in Singapore. All it takes is S$1 for your initial paid-up capital, as well as other basic requirements that you need to fulfil as explained below.
Your company can also be incorporated in just 1-3 business days if there are no issues, making it quick and easy.
Pool of Local and International Talent
Businesses venturing into Singapore can be assured knowing that it has access to a pool of local and international talent. The country has been stepping up its efforts to cement its position as a talent hub by introducing new schemes and policies.
For example, it recently unveiled the new Overseas Networks and Expertise (ONE) Pass designed for the cream of the crop.
Singapore also builds local talent and nurtures leaders by introducing schemes like the Global Ready Talent Programme (GRT) and Startup SG Talent Scheme.
Ample Assistance
Singapore is well-known for its streamlined bureaucracy. Government agencies work together to help businesses settle down and grow in the country.
Some of these agencies your business can tap into include:
- The Economic Development Board (EDB)
- The Accounting and Corporate Regulatory Authority (ACRA)
- Enterprise Singapore
- The Singapore Food Agency (SFA)
3 Simple Steps to Set Up a New Business in Singapore
Whether you need to set up a physical or online business, the procedure is simple. It can be summarised in 3 simple steps.
Related Read: How Long Does It Take to Register a Company in Singapore? »
1. Choose Your Business Entity
After deciding on your business model, you can decide on the business entity.
Though options exist, many new companies register with the Accounting and Corporate Regulatory Authority (ACRA) as “private limited companies” due to its scaleability.
On top of that, shareholders are not liable for debts and losses beyond their share capital.
Related Read: What’d I Wish I Known Before Starting My Own Business »
2. Set Up Your Company
The 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 include:
- Company name – Must be approved by the ACRA
- Shareholders – Minimum of one shareholder is needed
- Directors – At least one director must reside in Singapore
- Company secretary – Also must be a Singapore resident
- Paid-up capital – At least S$1
- Registered address – A physical office address is required
As a newly-incorporated Singapore company, you may purchase a business profile from ACRA.
This electronic report details information regarding your business. It includes your registration number (UEN), registration date, and shareholders.
This profile will be required to open a corporate bank account, apply for licenses and permits and check on potential business partners.
Related Read: Why Company Name Search in Singapore Is Important »
3. Open a Bank Account
After incorporating, you can open a bank account in Singapore. You may choose from a variety of local as well as international banks.
Some popular options are:
- DBS
- UOB
- OCBC
- Maybank
Business Processes That Follow Incorporation
Additional post-registration activities may include:
- Licenses and permits – Some business activities require approval or a license from government authorities. Examples include: private schools, video companies, travel agencies, liquor distributors, money lenders, banks, financial advisers, childcare centers, and importers, wholesalers and retailers of liquor.
- Registered office hours – You must register your office address and hours
- 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 the Singapore customs
- Goods and services tax registration (GST) – 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
- Registration with Singapore Central Provident Fund (CPF) – The Central Provident Fund or CPF is a compulsory pension fund scheme in which the employer and Singapore citizen/permanent resident employee contribute a percentage of their monthly salary to the fund
What Are Some Small Business Ideas?
Still considering the business type you want? You can pick a business idea from any of these suggestions:
- E-commerce business
- Online marketing business
- Freelance web designers
- Social media management
In particular, going online, like opening an online store or providing digital services, can be a good idea if you don’t have much funds to start.
These are less capital intensive because of the absence of fixed overheads as compared to brick-and-mortar options.
Related Read: 63 Side Businesses to Make an Extra $500 a Month »
Singapore Presents an Attractive Business Opportunity
Many factors point to Singapore’s desirability as a business hub, which makes sense to start a company here.
Setting up a new business in Singapore can be quick and easy. Enlist the help of incorporation experts to help you start the process and finish it quickly and successfully.
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