Singapore is considered quite a business-friendly nation for starting any kind of new business. The city-state, in fact, ranks #2 (only after New Zealand) in the ease of doing business index, though that’s a combination of factors such as dealing with permits, registration, electricity, international trade regulations, and so on. In getting credit, it ranks in the top 40 countries in the world and #9 in terms of taxation.
But it is also not easy to start a new business in Singapore for the uninitiated like any other country around the world. For the companies looking for new opportunities in the Asian region, Singapore offers a highly productive environment for them to grow. With a stable economic and political structure along with the well-established judicial system and pro-business government, Singapore’s framework has created an ideal platform for several good investments making it a major commercial, financial, and wealth management hub.
Singapore is also constantly ranked as the easiest place to do business worldwide by the World Bank and several other organizations repeatedly. On top of that, Singapore has highly educated and skilled manpower fluent in speaking English along with many Asian languages.
Singapore is considered one of the best countries in Asia to grow a business due to one of the lowest corporate tax rates (17%) in the region. But that’s not all. There are certain things that you should keep in mind as an entrepreneur if you want to start a company of your own.
All the things that you would need to know before you start your business will be discussed in this article. Make sure you don’t skip any major pointer!
Let’s have a look at some key points before you opt for starting your company or business that will help you understand things more clearly.
#1. How to start a business: Registering your business
After you realize your ambitions regarding your business, the first step will be to consolidate your company by registering for your business in Singapore. And to do that you need to determine the kind of business that would be well suited for you. Most of the businesses are private limited organizations in the country, but it doesn’t necessarily mean that you shouldn’t register otherwise.
Having a sole proprietorship may look enticing while dealing with opening a new business, but you need to keep in mind that it has its downsides too. If you go for a sole proprietorship, it would mean that you are to be solely responsible for all the risks and liabilities that are acquired by your business.
This may push you to sell the assets to settle the losses and debts you accumulate over time. But if you do not want to risk it all, registering as a company will be much safer. After deciding what type of business fits the bill for you and you want to go ahead with, registering is a reasonably fast and easy process.
In Singapore, while registering for your business you can go for self-registration or opt for an agency to do it for you. However, all business registrations in Singapore are handled by the Accounting and Corporate Regulatory Authority (ACAR).
#2. Acquiring capital for your new business
Have you given a thought to how you are going to get the funds to start your small business or company in Singapore? You need to go through sources and find out some potential channels of capital available for funding to help you set up your business.
Mostly, entrepreneurs start with their own savings or borrow some initial operating capital from their friends, family, and acquaintances.
Although, based on the kind of business you want to set up and the funding it may require, those options might not be your best choice.
That is why starting a business in Singapore comes with its own set of perks. There are many attractive schemes already in place to help set up a small new business which ensures new and innovative business ideas that come forward get transformed into workable plans by offering support that is necessary and motivation for more business ideas to start their journey.
#3. Setting up an office or headquarters
It is essential to find the right place to set up your business for it to survive and operate properly. When you find a suitable site for your business, it will require you to sign a lease in order to secure the place in which you will entail to pay the rent of the first month along with 1-2 months of rental deposit.
It will do you good if you purchase business insurance to protect your employees and yourself which will cost you a couple of hundred dollars a year. With this, you might require to renovate the place according to whatever business you start, which can easily cost you thousands of dollars but as said before, all the things that you might need to add will depend solely on the nature of your company or business.
#4. Recruiting employees
You will require a proper plan to combat the staffing challenge. You will need to recruit some employees to make sure that your startup business runs smoothly. You also need to keep in mind that the business needs consideration in the areas like how many employees you will be needing in the first year of your business. It may also be necessary for you to hire staff from abroad and someone for specialized positions, in this case, recruitment services go up to 20% of the candidate’s salary.
You need proper figures to estimate relevant expenses so that you can plan around the upcoming challenges. It helps to do your fair bit of market research to figure out current average salaries and whether or not you can afford them. If not, you are left with only one option: a business loan to handle all the payroll.
It also helps to ask your colleagues or acquaintances if they would like to work with you, though whether or not personal relationships remain intact when someone works for you differs from case to case.
#5. Running the business
For running a successful business an entrepreneur cannot simply depend on great ideas for their business to survive. A proper action plan is in order if you want to turn your dreams and brilliant ideas into reality.
When you formulate a plan of execution there will be many expenses that you need to keep track of. A majority of your total business expenses will be spent on your office space depending on the space you acquire along with the payrolls which depend on how many employees you will be needing for your company and the nature of your business.
All these expenses will require hundreds and thousands per month to keep your company operating smoothly.
In order to develop your business, you need to do the right kind of marketing which will be another expense in your business venture. You need to set a budget aside for marketing in order to get a clear view of the money you will be spending.
#6. Filing relevant taxes
Singapore has entered into an agreement for Avoidance of Double Taxation with more than 73 nations. So, in case you think starting a company or a new business can lead to double taxation in Singapore, you need to think again.
With the government of Singapore offering these kinds of advantages all they expect is for the entrepreneurs to pay their taxes on time. You can also hire an accountant to manage and keep track of your taxes, which will cost you considerably and you need to pay them on time.
Alternatively, if it’s a fairly small company even by the end of a year, you can hire a CA during the tax season to do your books in a timely manner. This way, you don’t have to pay an accountant year-round just to fill your taxes. Bigger companies, however, need a full-time accountant because they have a lot of money coming in and going out and consequently, someone to keep track of it all and organize it properly is a must.