Do you want to start a business in Singapore as a foreigner? here is a complete guide to starting a profitable business in Singapore with no money.
Well, by providing an in-depth analysis of the Top 50 Small Business Ideas in Singapore and a series of industry-specific business plan templates; Now we will analyze the legal requirements, market feasibility, and everything you need to start a business in Singapore in detail. So put on your entrepreneur hat and let’s move on.
Singapore is a very good place to do business in the world due to its strong ethics of trade and investment. Singapore is one of the most competitive Asian countries and the easiest place to do business in the world.
The country is officially known as the Republic of Singapore and is often referred to as Lion City, Garden City and Red Dot, it is a global city and a sovereign state in Southeast Asia and the only island city-state in the world. . It is located one degree (137 km) north of the equator, at the southern end of mainland Asia and Peninsular Malaysia, with the Riau Islands in Indonesia to the south.
Singapore’s territory consists of a main diamond-shaped island and 62 islets. Since independence, extensive reclamation has increased its total area by 23% (130 km2) and landscaping policies have embraced a densely populated island with tropical flora, parks and gardens.
The economy is diversified: its main players are financial services, production and oil refining. Its main exports are refined petroleum, integrated circuits and computers, which accounted for 27% of the country’s GDP in 2010, and include important sectors of electronics, refining, chemicals, mechanical engineering and biomedical sciences. . In 2006, Singapore produced around 10% of the world’s production of casting plates.
Singapore facts and figures that will interest you as an investor / entrepreneur
There are plenty of facts and figures that make Singapore an investment destination. Not surprisingly, people flock to Singapore for this or that type of business. This is due to the enormous mental capacities and resources that the country possesses. Here are some real facts that you might find useful:
- Singapore has strong international trade links as its port is one of the busiest in the world in terms of tonnage.
- Singapore is a global center for trade, finance and transport.
- For ten years, the World Bank considered it the easiest place to do business.
- The World Economic Forum (WEF) has also rated this country as the most technologically ready country.
- The WEF also considered it to be the 2nd most competitive country in the world.
- is also the third largest exchange center.
- Singapore is the third largest financial center in the world.
- The country has the third largest oil refining and trading center.
- It also has one of the two busiest container ports since the 2090s.
- Over the past decade, it has been the only Asian country to achieve the highest AAA sovereign ratings from all of the major credit rating agencies, including SP, Moodys and Fitch.
- Singapore is the most influential city in Asia and the fourth in the world according to Forbes.
If you are looking for a healthy environment which is particularly good for supporting a start-up business, then Singapore is your one-stop destination. In fact, it is possible that all kinds of businesses will thrive here. Read on to learn about the most successful and profitable trading options you can start in Singapore.
Starting a Business in Singapore Without Money as a Complete Guide for Foreigners
1. Have a viable idea: The very first step in starting a business is to come up with a viable and potentially profitable idea to implement. Then you need to do surveys and inquiries with people who are in the niche you want to get into.
The goal is to find out if your product or service is really needed there and if the Idea is already oversaturated in the market. You will likely need to make changes to your business plan. Calculate your overhead costs and try to keep them as low as possible.
- Economic analysis
If you want to start your business in Singapore, you need to look at the economic situation a lot. point of view. Some of the factors considered are: Human capacity building and job creation, social policies and corporate social responsibility initiatives, improved infrastructure, transfer of technology and knowledge.
Did you know that Singapore also offers an extremely favorable business environment for foreign investors? In fact, it has recently been recognized as the city with the best value for money for foreign companies.
All the factors contributing to starting and running a new business, such as a strong forex market, a free market economy, financial stability, a robust regulatory framework, an advanced and efficient infrastructure, a corruption-free system, strategic geographic advantages and a skilled workforce are readily available. which makes it a very attractive investment center.
Large international companies such as Apple, Google, Credit Suisse, DBS Bank, Procter and Gamble, Microsoft and others have already assessed Singapore’s potential and established successful operating businesses here. There are also huge opportunities for business entertainment, which Singapore sees as an important element in encouraging foreign investment.
2. Write a Business Plan: Once you have developed an idea for your business, the next thing to do is to create a roadmap in the form of a business plan. Among other things, it should contain your business goals, how to achieve them, your funding needs, and your marketing plans. It can also contain general information about an organization or team that is trying to achieve these goals.
A business plan doesn’t have to be very long, it just needs to contain the basics of your plan and can be developed as the business grows. The focus of your business plan may also change over time depending on how you use it. For example, if you intend to use it for fundraising, you will need to focus very closely on the management, financial aspects, and growth potential of your business.
List of legal documents to start a business in Singapore
To do business in Singapore, you need several documents. Not having all or more of these documents in place means you may just end up in the queue. Here are some documents you will need:
- Registration certificate
- Return of ownership certificate
- Business license
- Business plan
- Non-disclosure agreement
- Memorandum of Understanding (MoU)
- Employment contract (letters with proposals)
- Operating agreement
- Company charter
- Operating Agreement for LLC
- Insurance conditions
3. Definition of a Business Structure: Singapore has many business structures that you can choose from. Some of them are sole proprietorships, partnerships, limited liability companies, subsidiaries, branches, representative offices, etc.
However, you should not choose at random, as the form of starting a business will actually affect many aspects of your business: your personal responsibility and confidence in the eyes of customers, your ability to borrow money and grow. the business, the attitude of banks and lenders to name a few.
Which one you install depends on a number of factors and you should choose the structure that best meets your needs. To determine what it is, ask yourself the following questions:
- how much capital are you willing to invest?
- how many owners will be in the business?
- What obligations and responsibilities are you prepared to take on?
- What risks are you prepared to take?
- Will it be easy to close the business of this particular structure?
For example, sole proprietorship is ideal for people who want to start a small business without partnering with anyone. If you are going to share your business with a partner, you should consider registering a partner business.
Both of these companies benefit from a tax point of view (your business is only subject to personal income tax), so you save a lot by avoiding corporate tax. Sole proprietorship is a great choice for sole traders or freelancers.
But the main downside to both forms of ownership is that your liability (as the owner) is not limited to your business assets, and when a legal claim arises, you risk losing your own assets. If all goes well you win, but if you have problems you can lose everything you own. So you are not protected.
- Limited partnership
A partnership should not have more than 20 partners. If the company has more than 20 partners, the partnership must be registered as a company in accordance with the Companies Act, chapter 50. Then it will have its own legal personality, that is, rights of real estate property, will have a permanent estate and may bring legal action under your name.
LLP partners will not be held personally liable for commercial debts incurred by the LLP; however, the partner may be personally liable for claims for losses arising from his own act or omission, but he will not be held personally liable for such wrongdoing or the inaction of any other LLP partner.
- Limited liability company
The best option for a new company in Singapore would be a limited liability company which limits the owner’s liability to the assets of the company, and gives the company more credibility when dealing with investors, customers and banks if you need a loan. It is more flexible and sustainable due to the wider possibilities for property transfer and growth. It usually contains the words Pte Ltd or Ltd.
Another important advantage concerns taxes. The Singapore government spoils new limited liability companies with incentives and tax credits. This releases a new Pte. The LLC pays corporate tax for the first 100,000 SGD of its profits and halves the tax (from 17% to 8.5%) for the next 300,000 SGD. In addition, this income is taxed at the rate of 17%.
It’s worth noting that you will need at least one shareholder and one director to register a limited liability company (although they can be the same person). A director must be a Singaporean or a permanent resident of Singapore.
If you are a foreigner without the right to stay in Singapore, you may be puzzled by the last requirement: how do you go about finding a Singaporean manager for your business? But in fact, it’s not at all a problem if you hire an agency that provides registration services.
Their registration packages include the appointment of a designated director and even secretarial services. Leveraging the expertise of incorporation teams is also a good choice as they can advise you on the most successful business object for your startup, help you calculate all possible costs, and customize your business plan.
4. Choose a business name: To register your business, you must first choose an appropriate and unique name for your future business. The government requires that this name reflect your business philosophy and not be the same as any other existing or obscene business.
To avoid unnecessary delays, it is best to verify the name before registering. Today, it would be a good idea to match your chosen name with the domain names it has if the website is essential for your business. If you hire an incorporation service company, they will do a thorough name verification to help you save time and better present your business.
5. Obtaining the correct address: To register a business, you must provide a true local address in Singapore where you intend to lease the premises. This address is essential as all official documentation will only be sent to this address. You must then approve the property with the Urban Improvement Authority (URA) and obtain permission to use it for commercial purposes.
If you have a small business, only want to hire a few people, and don’t want office space, you can use your home address to complete the registration. If you are renting an HDB apartment, you must get approval from the Housing Council.
If you intend to work in a rented house, you must apply for permission to do so through the Home Office Scheme (HOS). Please note that after registering your office in a private home under HOS, you will not be allowed to employ more than two foreign workers and communicate your business presence through signs (billboards, etc.).
If you are unsure which method to choose, contact your recording service provider. Most of them offer free consultations (quotes), so even if you don’t order full registration assistance, you can get a full estimate and valuable advice absolutely free.
Top 5 cities for doing business in Singapore
Although it is possible to do business in Singapore in general, however, some cities and states have superiority over others due to the very favorable terms they offer. Various businesses have sprung up here and they spawned other businesses as well. Here is a list of the 5 best cities for doing business in Singapore;
- Bukit batok
6. Business Licenses: Most businesses in Singapore require one or the other license to operate. And while you will only be allowed to obtain the necessary licenses after registering your business (registered with ACRA), it makes sense to study the legal field in advance to avoid any future legal issues.
You can link to OBLS for the specific licenses required for your niche. You may need multiple licenses from different authorities if your future business is in entertainment, finance, education, or the production of beer, cigarettes, and other controlled things.
7. Subsidies for SMEs: Singapore is often cited as one of the easiest places to do business in the world, and this is partly due to the large number of subsidies and support programs available to businesses. small enterprises. Many of these programs are offered by the government agency SPRING (currently Enterprise Singapore) and can be used to fund everything from skills development and innovation to new product development and overseas expansion.
One popular scheme is the Performance and Innovation Credit (PIC) provided by the Singapore Internal Revenue Authority, which allows your business to receive tax deductions of 400% up to $ 400,000 or cash payments of 60%. up to USD 100,000 for investment in innovation and increased productivity.
There is also a seed grant from ACE, the private entrepreneur leading the movement. The grant helps finance Singaporeans who are starting their first business.
8. Registering your business: You can register your business in Singapore by applying online using ACRA’s BizFile service.
Log in to BizFile using your username and SingPass to submit a transaction online. You can do this using your own computer at CitizenConnect centers located in community centers or at one of the ACRA BizFile kiosks on its premises.
You can also use the services of a professional firm such as a lawyer, accountant, or chartered secretaries to submit an online application on your behalf. Company registration takes approximately 15 minutes after registration.
However, it can take from 14 days to two months if the request needs to be referred to other authorities for approval or review. ACRA will assign your business a Registration Number (BRN) that serves as a unique identifier (just like your NRIC) for your business.
Business licenses and permits required to start a business in Singapore
To start a business in Singapore, you will need federal and state permits and business licenses. However, there are basic and most common licenses and permits that all businesses need. Without these licenses, you run the risk of being restricted by the authorities involved in the enforcement of trade laws in Singapore. They include the following:
You can easily register your business, including overseas subsidiaries, online at Bizfile with the help of accounting and corporate regulator. Foreign companies wishing to open a representative office in Singapore can contact the following government agencies:
- Singapore Banking, Finance and Insurance Authority.
- Legal Services Regulatory Authority.
- All other branches of international entrepreneurship in Singapore.
List of government and parastatal agencies responsible for business registration and licensing and permits in Singapore
Depending on the business you want to operate, business permits or licenses may be required to run a specific type of business. Your registered business may need to apply for permits or business licenses if you are in these professions: Professional services such as doctors, lawyers, accountants, pilots, potential traders need a professional license. Other private schools, travel agencies, nurseries, employment agencies for foreign workers Spas must apply for a compulsory business license.
There are different licensing bodies around the world. Singapore is no exception, as it has agencies that handle business permits and licenses. They make sure they have a good license before a business can fully trade.
All businesses must be registered with the Business Accounting Regulatory Authority (ACRA). This includes any individual, firm or corporation that does business for a foreign corporation.
A foreign company wishing to open a branch for its business in Singapore will need to appoint two local agents to act on its behalf. These agents must be Singapore residents, i.e. citizens or permanent residents, or employed foreigners or dependents. Registration information for branches of foreign companies can be found here.
Some businesses, such as banking, insurance, and stock exchange, require special licenses. Special licenses are also required to manufacture products such as cigars and firecrackers. A step-by-step guide to registering a business or company in Singapore is available on the company website .gov.sg.
Many companies around the world prefer to locate their bases in Singapore. Many global brands are also using Singapore as a gateway to other emerging Asian markets. However, there are still problems inherent in starting a business in this country.
Here are some of the challenges faced when starting a business in Singapore as a foreigner or non-citizen. It goes without saying that some of these problems may also exist in the entrepreneur’s home market.
Threats and potential challenges of starting a business in Singapore as a foreigner and non-citizen
- Huge tax
- The language barrier
- Disunited cities
I. Culture: Singapore as a nation retains its cultural value, which is strongly influenced by Asian philosophy. For example, in Singapore there is a firm belief that business relationships should not be rushed and should be based on personal development first, rather than business statistics.
In other words, there is a general consensus that a good relationship must exist between the parties before starting a business relationship with them. It is good to note that for a foreigner, striving for a warm bond when starting a business in Singapore can be beneficial in the long run. It is also very important to respect hierarchy and seniority.
ii. Criticism: “saving face” while communicating is a concept ingrained among Singaporeans. The face is the basis by which a person’s personal pride, social status and reputation are assessed. Therefore, to “save face” in public, many Singaporeans hold back their emotions and do not directly criticize people.
When doing business in Singapore, avoid excessive confrontation and criticism, as this behavior can have disastrous consequences for building healthy business relationships.
iii. Diversity among its people: Singapore is a diverse country and to some extent is one of its strengths as a nation. Singaporeans are mainly made up of Chinese, Malays or Indians. To be able to successfully run and maintain a business in Singapore, you must understand and appreciate this diversity.
The different customs, cultures and traditions that affect business must be fully understood and put into perspective. A business can offer the Doing Business in Singapore program to help them understand the ins and outs of doing business in Singapore and get the most from it. the opportunities available there.
iv. Workforce challenges: Hiring workers to fill positions in your business can be a daunting challenge in Singapore, especially if your business is in the service or retail industry. This can be attributed to the protective nature of government, as well as the attitude of citizens.
For several decades, Singapore has made a lot of efforts in the field of education and therefore has been a concerted effort to channel its workforce towards higher value-added occupations. Professions such as medicine, biochemistry, engineering finance, etc. are more likely to be favored by Indians than occupations in tourism, retail, service, etc. due to the status given to older professions and prestige. with which they come.
An easy way to combat this dichotomy would be to employ more foreign nationals, but the state of Singapore makes this quite difficult due to the imposition of high fees and quotas on foreign workers.
v. High physical overheads: Labor isn’t the only expensive part of doing business in Singapore. Due to the size of the country, land also tends to be priced high. building a factory, renting an office or a small store will cost the investor twice or more compared to other neighboring countries.
In addition, a large number of materials and resources that can be used in production may not be produced in Singapore and therefore will have to be imported, which will further increase the cost of manufacturing goods in Singapore.
vi. Building Permits : When getting building permits in Singapore, you need to complete at least 11 procedures before you can get them. This whole process will take you at least a month. Companies must also obtain written permission from the City Reconstruction Authority (URA) before a structural plan can be approved.
vii. Long Electrical Procedure : Connecting to electricity can be quite a lengthy process for anyone who wants to start a business in Singapore. The electrical connection will take at least thirty six (36) days. However, most of that time is spent opening an electricity bill and then paying any required connection fees.
viii. Property Registration: Registering property for foreigners in Singapore can be a long and confusing process, especially when you consider the fees involved. Companies that are not familiar with in-country operations may spend a lot of time researching with various government agencies, which may or may not be involved in this process, such as Internal Revenue Department, Land Transportation Branch , the Ministry of the Environment, etc.
ix. Access to Credit: As Singapore ranks 12th in the world in terms of ease of obtaining and accessing credit, businesses should remember that individuals and businesses are exempt from liability in the public credit registry with information on their borrowing history over the past 5 years.
X. High level of competition: As mentioned earlier, Singapore is a great place to do business and therefore attracts the interest of many investors. However, it can also be a particular problem for a foreigner who wants to start a business in Singapore. The increasing competitions with other foreigners and non-citizens, online platforms and local businesses pose a huge risk to anyone intending to start a business here.
Factors or Incentives Encouraging Investors to Invest in a Business in Singapore
Investors want to tear it apart when they sow, so it is very important that the country to invest in has very fertile soil that can generate income. Several incentives attract investors to Singapore. Here are some of the benefits of investing:
- A strong economy based on GDP.
- Zero tolerance for corruption.
- Open market economy.
- Stable prices.
- Illuminated trolley.
- Singapore has a highly developed and prosperous free market economy.
- Labor and skilled labor.
- Low tax rate.
- Advanced infrastructure.
- Singapore’s economy is known to be one of the freest, most innovative, most competitive, dynamic and business friendly.
The 2015 Index of Economic Freedom ranks Singapore as the second freest economy in the world. According to the Corruption Perceptions Index, Singapore is consistently ranked among the least corrupt countries in the world, alongside New Zealand and the Scandinavian countries.
Singapore has the eleventh largest global reserve in the world and one of the highest in the world. net external position per capita. Singapore’s currency is the Singapore Dollar (SGD or S $), issued by the Monetary Authority of Singapore (MAS).
It has been interchangeable with the Brunei dollar at par since 2067 due to their historically close relationship. MAS manages its monetary policy by allowing the Singapore dollar to move up or down within an undisclosed trading range. Facebook – The privacy index for the world’s major tax havens, slightly ahead of the United States.
Singapore has the highest percentage of millionaires in the world, with one in six households having at least $ 1 million in disposable wealth. This excludes real estate, business and luxury goods which, if included, would increase the number of millionaires, especially since real estate in Singapore is one of the most expensive in the world.
There is no minimum wage in Singapore, believing that this would reduce its competitiveness. It also has one of the highest income inequalities in the developed world.
List of 10 famous foreign brands doing business in Singapore
Over the years, several brands have grown from small to well-known brands. One of the advantages of these brands is that they are foreign. Here is a list of 10 famous foreign brands in Singapore:
- General Electric
List of Top 10 Most Notable Indigenous Businesses in Singapore
- Chin Khan
- Creative technologies
- Lean pizza
- Thai express
List of Top 10 Most Popular Indigenous Entrepreneurs in Singapore
- Razer-Tan Min-Liang
- Banyan Tree – Ho Kwon Ping
- Oil Ax – Leung Kai Fook
- X-Mini Xmi Pte Ltd.
- OSIM – Ron Sim
- Thai express
- BreadTalk – George Keck
- Charles and Keith