Do you want to start doing business in Singapore but don’t know where to begin? Are you currently doing business in Singapore but aren’t sure if your company is legally compliant with all the regulations? Are you a consultant or agent hoping to help local businesses by guiding them through the legal hurdles of starting and operating a company in Singapore? Does any of these sound like you? If so, reading on will be your best next step. Doing business in any country requires careful attention to local laws and restrictions.
Doing Business in Singapore is not as difficult as many people think. This document explains the main legal requirements for businesses that operate there. Suppose you intend to establish an office or branch of an overseas company, register a subsidiary, open a warehouse, or hire employees locally. In that case, this information will help you prepare for those changes.
Here check out essential things for doing business in Singapore.
Basics for Doing Business in Singapore:
Businesses looking to set up in Singapore must comply with the country’s company law, which the Companies Act governs. Companies registered in Singapore must have a minimum paid-up capital of S$1 and at least one shareholder and one director, who can be of any nationality. The company’s financial year end must also be 31 December.
To register a company in Singapore, businesses must first apply to the Accounting and Corporate Regulatory Authority (ACRA). They will need to provide a proposed company name and the particulars of the company’s shareholders, directors and company secretary. Once ACRA approves the application, businesses will need to pay the registration fee and submit the required documents, after which they will be issued a Certificate of Incorporation.
Foreign companies looking to establish a presence in Singapore may register a branch office or set up a subsidiary company. A branch office is simply an extension of the foreign parent company, while a subsidiary is a separate legal entity. The process for setting up either is similar to setting up a local company.
Once a company is registered in Singapore, it must obtain the necessary business licenses and permits before it can commence operations. The types of licenses and permits required will depend on the nature of the business activities being undertaken. For example, businesses engaged in food and beverage service will need to obtain a license from the Singapore Food Agency
- Company Formation and Registered Office:
When starting a business in Singapore, the first step is to incorporate the company. This can be done online through the Accounting and Corporate Regulatory Authority (ACRA). The process is straightforward and can be completed in minutes.
Once the company is incorporated, you must obtain a business license from the Business License Office. This can be done online or in person at the office. The process is fairly simple and just requires some basic information about your business.
After the company is incorporated and registered, you will need to open a corporate bank account. This can be done at any of the major banks in Singapore. Once you have opened the account, you must deposit your company’s minimum share capital requirements.
The last step in setting up your company is to obtain a registered office address. This can be done through ACRA or renting office space from a commercial property owner. Once you obtain an office address, you must register it with ACRA.
- Employee Relations and Contracts:
When it comes to employee relations and contracts in Singapore, there are a few key things you need to know. First and foremost, it is important to have a written contract for all employees outlining the terms of their employment. This contract should include salary, job duties, working hours, and other relevant details.
It is also important to remember that Singapore has strict laws against discrimination, so be sure to treat all employees fairly and equally. Consult a qualified lawyer if you have any questions about employee relations or contracts.
- Tax Obligations for Singapore Businesses:
Singapore’s tax system is considered one of the most efficient and straightforward in the world. The country has a territorial basis for taxation, meaning that only income earned within Singapore is taxable. This system incentivises businesses to set up Singapore shops and helps attract foreign investment.
Three main types of taxes levied on businesses in Singapore are corporate income tax, Goods and Services Tax (GST), and property tax.
Corporate Income Tax: Companies are taxed at a rate of 17% on their chargeable income, defined as their profit after deducting allowable expenses. This includes salaries, rent, interest payments, and depreciation. Chargeable income is divided into two categories: resident companies and non-resident companies. Resident companies are taxed on their worldwide income, while non-resident companies are only taxed on income earned within Singapore.
Goods and Services Tax (GST): GST is levied on the supply of goods and services at a rate of 7%. GST-registered businesses can claim back the GST paid on purchases made for business purposes. Therefore, GST essentially functions as a value-added tax (VAT). GST is not levied on exported goods or services.
Property Tax: Property tax is levied on all land and buildings used for commercial purposes at a rate of 10%. The amount payable is calculated based on the rental value of the property.
- Limitations on Doing Business in Singapore:
There are a few key limitations to bear in mind when doing business in Singapore. Firstly, all businesses must be registered with the Accounting and Corporate Regulatory Authority (ACRA). Secondly, businesses are not allowed to operate without a valid business license. Finally, foreign businesses must appoint at least one local director who is a Singaporean citizen or permanent resident.
What are the different types of business entities in Singapore?
There are several types of business entities in Singapore, each with its own set of rules and regulations. The most common types are sole proprietorships, companies, and limited liability partnerships.
Sole proprietorships are the simplest business entity owned and operated by a single individual. They are not required to register with the Accounting and Corporate Regulatory Authority (ACRA). Still, They must obtain a license from the relevant authorities if they intend to operate certain businesses, such as food and beverage outlets or moneylenders.
Partnerships are similar to sole proprietorships but involve two or more individuals. Partnerships must be registered with ACRA and, like sole proprietorships, may require a license to operate certain businesses.
Companies are more complex business entities and must be registered with ACRA. Companies can be either private or public and must have at least one shareholder and one director. Private companies are limited to 50 shareholders, while public companies have no limit on the number of shareholders they can have.
Limited liability partnerships (LLPs) are a hybrid between companies and partnerships. LLPs must be registered with ACRA and, like companies, can have unlimited partners. However, unlike companies, the liability of the partners is limited to their contribution to the LLP.
What are the benefits of doing business in Singapore?
Singapore is a pro-business environment with a highly skilled workforce, low taxes, and easy access to capital. The city-state also has a stable political environment and a robust legal system. Additionally, Singapore is strategically located in Southeast Asia and is a gateway to the region’s burgeoning markets.
Singapore offers many advantages to businesses looking to expand their operations into Southeast Asia. The city-state has a pro-business environment, with low taxes and easy access to capital. The workforce is highly skilled, and the political environment is stable. Singapore’s strategic location is also a gateway to the region’s burgeoning markets.
Businesses expanding into Singapore will find that the city-state offers an ideal base for operations in Southeast Asia. With its pro-business environment, skilled workforce, low taxes, easy access to capital, and strategic location, Singapore provides everything businesses need to succeed in the region.
Conclusion
If you’re planning on doing business in Singapore, there are a few things you need to know about the legalities involved. This guide covers all the essential information you need to start, from setting up a company to employing staff. By understanding the laws and regulations surrounding business in Singapore, you can ensure that your venture is successful and compliant with all the relevant authorities.