Setting up a business
Business licenses, ownership models and other must-knows
Between ample government support, its strategic location and its reputation as a global business hub, Singapore ranks among the best places in the world to start a business. Yet, many are hesitant to do so, holding the misconception that starting a business is a long and difficult process.
Follow these steps and you're on your way to a promising business venture:
1. Know your market
Conduct in-depth research on the fundamentals, including your competitors and target demographics. SingStat is a good place to start for the latest statistics on your intended industry.
Become well-acquainted with the Accounting and Corporate Regulatory Authority (ACRA), where you can file to register and run your business, buy more detailed market data and get vital information about running a business in Singapore. You can also use ACRA to find your Singapore Standard Industry Classification (SSIC) code—a requirement for every business. Be sure to also check up on the latest regulations to ensure your business is compliant. Compliance rules include appointing a local company secretary, fixing your Financial Year End (FYE) and appointing auditors within 3 months of incorporation.
2. Decide your business ownership model
Understand and decide what type of business ownership model you would like your company to have, whether it's a sole proprietorship or a private company. Commonly, a Pte Ltd structure is advised:
"The best option for a new company in Singapore would be a private limited company .... Pte. Ltd. is considered to be the perfect and the safest form of legal entity in Singapore; plus it gives the company better credibility when dealing with investors, customers, and banks"[i].
3. Familiarise yourself with local legislation
There is a lot of paperwork and regulation involved in starting a legitimate business in Singapore. Here’s a non-exhaustive rundown of some requirements you need to know:
4. Identify your business type
Decide what type of business presence you would like to have, whether it's an online shop or a business with a physical office. A home office is also an increasingly popular option, with more Singaporeans driven by "an increasing preference for flexibility, and a desire for a greater sense of control in managing one's own career development"[ii].
If you are intending to set up a physical office, you'll need a local address approved for business use by the Urban Development Authority. Real estate search platforms like CommercialGuru are good places to start looking for a conducive new workspace. For a cost-effective space that lets you meet and collaborate with like-minded entrepreneurs, consider co-working properties such as OneSpace.
5. Open a bank account
Set up a bank account to manage your cash-flow and transact with business partners. When looking for the right bank, consider the annual fees you’ll need to pay, how convenient your transactions will be, as well as value-added services such as availability of key industry insights.
For a banking partner that meets the criteria, look to DBS, which lets you manage your finances on the go with mobile banking and access to exclusive networking events through DBS BusinessClass.
6. Get funding
Ascertain where the bulk of your funding is going to come from, whether it’s from your own pocket, angel investors or crowd funding. The local scene is primed for venture capital opportunities, with 2016 seeing "the highest deal value and volume in the last five years for Singapore"[iii]
You can also check out websites like SPRING Singapore and SME Portal for a list of government initiatives to help fund your venture.
With all the red tape and legislation, starting your own business can seem like an impossibly daunting task. Fortunately for Singapore businesses, help is always readily available. You may approach corporate service providers such as RIKVIN, which specialises in corporate compliance, HR services and expansion advisory services.
Alternatively, you can also turn to your nearest SME centre or ACE for advice from industry veterans on starting and growing your business. Remember to stay on top of the daily economic and industry-specific news, so you’re the first to know about the latest legislative updates or technologies to ensure that your business grows and ultimately, thrives.