The small city-state of Singapore rose to the top of the World Bank’s best places to do business and also became the most business-friendly economy in the world. Singapore’s regulatory environment is highly beneficial for entrepreneurs. It is no wonder to us if many foreign investors like venturing into the country. However, there are things that you should do’s or don’ts when setting up a business in Singapore. Thus, this article will provide information about how to start a business in Singapore: do’s and don’ts. Let’s find out!
READ MORE: Viettonkin Consulting Global Business Registration service to help you start a business in Singapore
How to Start a Business in Singapore?
All types of businesses in Singapore must be registered with the Accounting and Corporate Regulatory Authority (ACRA). These business activities may refer to carry out on a continual basis for gaining a purpose, including web-based business and home-based business.
But, before registering your business, there are some considerations that you will need to decide. What are these? Let’s check them out!
The first important step is to choose a business structure based on your considerations, regarding capital, number of owners and risks. If you are the only person running a business, you can register as a sole proprietorship, which has less administrative requirements and requires less management.
If you want to form a business firm with one or more partners, you can register as a partnership, because a partnership does not have to file its accounts or have them audited. The next choice is an LLP, which your partners and you wish to limit your liabilities by not being personally liable for partnership’s debts.
Lastly, if you intend to expand your business and would like to raise your capital easier in the future, you can incorporate a Singapore company. This would be a separate legal entity which would allow you to limit your liabilities.
The second step is to decide on a business name. You should do research on Google to find out if your proposed name has already been used by a currently registered business, or if it is extremely similar to the name of an existing business. In addition, you should run your proposed business name through the entity search function on the BizFile+ website, which is ACRA’s online filling and information retrieval system.
Registered a Business Address
The last step is to have a business address. If you do not intend to rent any office space, you can consider registering your home address as your business address under the Home office Scheme. This is a residential scheme by the Housing and Development Board (HDB), and the Urban Redevelopment Authority (URA), which allows you to run an approved small-scale registered business from your home address.
Register a Business in Singapore
You need to submit an online application via the BizFile+ website to register your business.The application itself will take about 15 minutes to complete. However, certain types of business require approval from certain regulatory authorities before registering it, for instance, architecture, real estate, and defence businesses.
Additionally, the regulatory authority may only get involved in approving your registration after it has been submitted to ACRA. Getting the approval may require an additional 14 working days to 2 months.
When the period of registration has expired, you need to renew your registration. There is a renewal fee of $30 for 1 year or $90 for 3 years. Unless you have incorporated a company, then it will not expire.
After that, you also need to register online with the Accounting and Corporate Regulatory Authority, where a name search can be conducted and filling for the company incorporation and tax number (GST) can be completed. A company seal and registration for Work Injury Compensation Insurance at an insurance agency should be completed too.
Nonetheless, the process of doing business in Singapore should be unhurried and based on your personal development, rather than the facts and figures of corporate life. In the end, Singapore draws influences from both East and West, which can make it a centre of cultural values.
What Should You Not Do When You Start a Business in Singapore?
The journey to start a business can be a little daunting and risky. It is inevitable to commit mistakes when setting up a business. However there are errors that you can avoid before starting your business, so that you can do it carefully!
Late Renewal or Failure to Renew Business
You can get the penalty up to $250 if you are late for renewal. Additionally, for a sole proprietorship or partnerships, the registration will expire once it has expired and was not renewed. However, the business name remains registered until the registration is cancelled. If you keep carrying on a business, after its registration has expired, it will be liable upon conviction to a fine of up to $10.000 or a term of imprisonment up to 2 years or both.
Small Networking Won’t Help You on How To Start a Business
Growing a network is the essential thing to do because your network will determine the net worth of your business. The wider your network is, and the deeper your engagement with them, the more ammunition you have to succeed in your business.
According to Li Ka-shing, Hong Kong business magnate, an aspiring entrepreneur should be prepared to dedicate one-fifth of their time to network. This includes building relationships and establishing contacts at conferences, fairs and events. You may taste success in your business with proper follow-up and sincerity in friendship. After all, people would depend on other people that they can count on, to do the business.
Focusing on a Niche Market
Targeting a niche and small segment of the market is a crucial risk, and your business may not be taking off because it failed to connect with the more consumers. A sizable market allows room to be flexible with ideas and experimentation.
A good example to demonstrate the significance of market size is the success of instagram. At first, it had failed because it was pitched as a way to check-in at various locations and only appealed to a small market. Then, after restructuring itself as a photo-sharing app, Instagram has landed a huge market demand, and until today, we cannot live without Instagram.
Expecting Immediate Profit
It has been long said that an entrepreneur should not expect profits for at least 2 years from the time of incorporation. In this growing and learning phase, the entrepreneur should have enough financial backup to support the daily needs, as well as liquidity for spending on the business. Once you accept this fact, you should stay afloat and avoid getting disappointed in not gaining profits in less than 2 years.
Multi-tasking All by Oneself
An entrepreneur will need assistance in many fields, such as taxes, legal and compliance, bookkeeping, accounting, and so on. If entrepreneurs try to handle something in which they are incapable, then they may commit mistakes that are difficult to fix. Therefore, it is advised to take assistance from the most reliable expertise in the area.
Setting up a business in Singapore may be relatively easy, if you know the drill and avoid the errors from day one. In order to have a successful business, you have to be well-prepared. In conclusion, if you are still unsure about how to start a business in Singapore, you can contact us below. Viettonkin will always be ready to assist you anytime!