A Guide on Singapore
- Overview of Singapore.
- How would you like to expand?
- How to choose the right service provider?
- How can Greenhouse help?
Here, you’ll find all the basic guidelines to enter the country and choose the right service provider to help you through the process.
Disclaimer: This content is intended for educational purposes only and should not be taken as legal instructions. You should contact consultants in your target markets before making decisions related to company incorporation or service execution.
Overview of Singapore
Across all the Southeast Asian countries, Singapore has consistently ranked top on World Bank’s Ease of Doing Business and even prides herself in being an economy that can grow, attract, and retain talents. It is no wonder why many businesses flock here to leverage the business opportunities available on this small little island.
There are many advantages of establishing your business on this sunny island. Here are a few attractive points to consider:
1. Few regulations and political stability
The Singaporean government is intolerant to any forms of corruption and since everyone, including the government officials, is under the law, they will also receive harsh punishments if found guilty. As such, with such strong governance, it is why politically, incorporating your business here is very stable.
The country has a bureaucracy-free regulatory framework and procedures are straightforward to follow.
2. Rational tax system
Singapore’s tax system is one of the simplest in the world and is very attractive especially for new firms. Although the corporate tax rate is capped at 17%, there are many tax rebates and incentive programs that the government offers too. As such, your company may be experiencing an overall lower effective tax rate.
3. Booming economy
Being a free market economy, the country is experiencing a growing interest in fintech and cybersecurity companies. It is also a regional tech hub to its neighboring countries with its strong technological infrastructure and growing pool of talent.
Yet, with the overwhelming knowledge available on the internet, some opinions and information might be inaccurate. As such, it is still always better to hear from local service providers on the ground to help in various services from registering your company to managing your business services.
How to Enter
Depending on your company goals, there are several ways to enter. In the event you are still not sure about the market, most businesses typically find it useful to conduct proper market research.
Additionally, with the current situation of Covid-19 as well, most businesses also find it really helpful to connect to relevant people before having the business established. As such, other than doing market research, we also recommend networking extensively or have your company established directly. Greenhouse can help guide you through these processes.
1. Market Research
This method of entering is mostly suitable for companies or businesses that are still not ready to venture into the new market just yet. It is also an effective method to understand the characteristics and opportunities of the local market.
Typically proper research conducted by a service provider will take about 1 - 2 months, depending on the objective and the procedures. When you choose to do some market research, there are essential topics that you may need to consider and you should ask to be covered. These topics are as follow:
- Overview of the country where you plan to expand into.
- Overview of your company’s industry.
- Competitive analysis of the product or service you’ll be offering.
- Potential partners in the country.
- Market entry strategy to enter the market
2. Business Matching
Another popular way for foreign businesses to enter the market is by connecting with strategic people on the ground. That service is known as “business matchmaking”.
Most companies use such services to meet potential distributors, agents, resellers, strategic partners, customers, investors, and other relevant people that are strategically important.
We encourage companies to gauge demand by meeting strategic partners because of the following benefits:
No need to travel to new markets immediately (such meetings can take place online).
No need to hire local teams so early.
No need to spend money on corporate services.
Attend meetings with curated prospects for partners without spending any time on research and cold outreach.
Here are a few tips if you’re not ready to set up your company just yet, but would like to be connected to relevant people.
- Work with a reputable service provider to protect your company.
- Ask them about their network in your given industry.
- Prepare documents to support the service providers like partnership/sales deck, brochure, and company profile. Preferably translated in the local language.
- Make sure the service provider shares the profiles of all companies they will meet you with.
- Ask for a list of prospective meetings before the service provider starts scheduling calls, and explain to them who your priorities are.
Incorporation and Post-Incorporation Service
1. Figure out what structure your business needs
Before you start doing business in any new market, you should already have a clear idea of your business plans. Specifically, you should have at least a general idea of how to answer questions like:
- What are your planned business activities?
- How much capital are you going to have?
- What are your revenue projections?
- How quickly do you want to scale your company?
- How many partners or shareholders are you going to have?
Knowing these things is essential in choosing the right legal structure for your business when you start your incorporation process.
Singapore offers many legal entity structures for businesses like sole proprietorships, partnerships, Limited Liability Companies, subsidiaries, branch offices, representative offices, and so on. These options can impact a lot of things, including your credibility to consumers, tax exemptions, and ease in expanding the company.
You can consult a business incorporation service provider in Singapore to help review these options. However, having a clear business plan will help you choose a legal structure that better fits your needs.
2. Pick the right company name
Next, you should pick a name for your company that accurately represents your business activities. For Accounting and Corporate Regulatory Authority (ACRA) — the Singaporean governing body for business incorporation — to approve it, your company name should fulfill a few criteria including:
- Must not contain any obscene words.
- Must not infringe on any trademarks.
- Must not be too similar to any existing business.
You should prepare a shortlist of at least three company name options that you like.
Also, you can take this chance to check if a website domain that fits your company name is available — if you plan to create a website for your business.
3. Prepare a registered business address
During the incorporation process, ACRA also requires you to submit an official address for your company. This location will be the official destination for your all mailing and communications, so it needs to fulfill a few criteria:
- The office must be open and accessible for at least five hours during ordinary business hours on each business day.
- It should be a property designated for commercial, industrial, or office purposes located in Singapore.
- It should be an actual location and not a P.O. Box.
Virtual office and coworking options are also available as business addresses in Singapore. You can consult an incorporation service provider to decide if this is the right option for you.
4. Get a resident director
The next step is especially crucial if you’re a foreign entity seeking to incorporate into the country. For this step, you need to choose at least one director for your company that fits these criteria:
- A Singapore citizen, Permanent Resident, or holding a Singapore Pass such as the Entrepreneur Pass.
- A director may also be an Employment Pass (EP) holder. However, in these cases, the director must first get a Letter of Consent (LOC) from the Ministry of Manpower.
- At least 18 years old.
- Have a clean criminal record.
- Never have declared bankruptcy.
If you fulfill these criteria, you can be the director yourself. Otherwise, you can appoint a trusted business partner. Most incorporation service providers offer a nominee director service for foreign companies to fulfill these requirements.
5. Get a company secretary
Besides a director, you also need to appoint an official company secretary. This secretary needs to fulfill these criteria:
- A Singapore citizen, Permanent Resident, or holding a Singapore Pass such as the Entrepreneur Pass.
- At least 18 years old.
- Appointed within six months of company establishment.
This step is just as important as deciding on your director or shareholder. Corporate compliance is a big deal there, and your company secretary should be able to provide the directors with guidance about compliance issues.
Also, a director of the company can’t also be the company secretary unless the company has more than one director. For this reason, you will most likely have to appoint a different person well-versed in Singaporean corporate practices as your secretary.
Most incorporation service providers also offer a corporate secretarial service. This allows you to outsource your secretarial affairs to professionals fully accountable to your company.
6. Difference between Employment and Entrepreneur Pass
For that, you will need to understand the Employment Pass (EP) and Entrepreneur Pass (EntrePass). Both passes are valid and common work visa options for foreign business owners or workers who plan to move there. However, these options have certain differences that make them suited for different types of foreign nationals.
A Singapore Employment Pass, or EP, is a work permit for company staff and executive personnel who wish to work or have been offered a job there.
To be eligible for the EP, you need to meet the following requirements:
- Fixed monthly salary of minimally S$3,600 (for young graduates) and S$4,500 for professionals
- Hold managerial or executive positions
- Tertiary degree, from a reputable university, and good professional background
An Entrepreneur Pass, or widely known as EntrePass, is another type of work permit for foreign entrepreneurs who wish to start their business in Singapore. More specifically, these businesses should be entrepreneurial and innovative in nature.
To be eligible for the EntrePass, you need to meet the following requirements:
- Shareholding requirement of at least 30 percent
- Present a business plan showcasing entrepreneurial and innovative ideas and plans for local hiring
- Your business should not have been set up for more than 6 months (otherwise, you should apply for an EP)
Usually, applicants will apply for an Employment Pass if they’re:
- Getting a job in an existing company in the country.
- Starting a local branch of a foreign company in Singapore.
- Moving to Singapore later to work in a company they started from overseas.
Meanwhile, applicants will consider an EntrePass if they’re:
- Planning to start a company in Singapore.
- In the process of incorporating a company in Singapore, that is 6 months old
- Business is one of innovation and entrepreneurship
There are also other cases where either an Employment Pass or an EntrePass would be the right solution for a foreign national seeking to work in Singapore.
In any case, you should still consult an experienced service provider to find out which option best suits your case. Every case is different and requires a solution that’s tailored to your needs.
7. How much to register a company in Singapore
For company incorporation, ACRA charges around USD 12 fee for name application and around USD 230 registration fee, for total administrative fees of around USD 240. However, the total set up cost will depend on the service provider you choose to work with. Most corporate secretarial firms in the country provide incorporation packages costing between USD 380 and USD 1135 depending on the precise scope of services needed. Additionally, the nature of your business may also affect the fee for your company incorporation as it may require additional licenses.
How to Choose a Service Provider
After you have decided which way you would like to enter the market, it is also important to choose a service provider that you can work with. There are many reasons why businesses hire a service provider to help them. It is also important to carefully choose a service provider, lest the process might be delayed or the project you’re working on might not be successfully completed.
However, how do you know which service provider is right for you? What should you look for when seeking a service provider?
Although the right fit is highly dependent on your project plan, here are five things that can help you figure out if the service provider is worth working with.
1. Track record
You should always ask who they have previously worked with and what project they have worked on. Some service providers may be great at pitching without having a track record of success.
Always make sure that the service provider you’re talking to can refer you to past clients who can confirm a successful project they have assisted. Actual client references will help you determine which service provider can address your issue more efficiently.
2. An experienced team
You can learn about a service provider based on how they pitch to you as a client. The best service provider will care about your time and focus on your problems. Whoever presents to you at the beginning should also be who your team actually works with in the long run.
3. Get a reference or talk to others
Ask around to find out about the service provider and other successful businesses that have been working with them. Here at Greenhouse, we will give you contact prior to signing an agreement with the service provider.
4. Don’t fall for name-dropping
It is easy to be impressed by large service providers with many years of experience and offices around the world. But every company has different needs.
Consider what kind of service, responsiveness, and support you will need given your unique circumstances. At times, it may make more sense to work with smaller service providers where you will be their number one priority rather than with a large brand that works with hundreds of companies at the same time.
5. Reasonable cost-structure
The cost structure is especially important when determining which service provider you would like to work with. Everyone is looking for a vendor that can offer great value for money.
Determining a reasonable cost requires more than simply finding the cheapest vendor. An inexperienced consultant who is cheaper may take a longer time to get the job done which will result in further costs for your business.
If you are in doubt about what’s a reasonable cost, get in touch with our team and we will provide examples.
Additionally, here’s a few questions you can address to the service provider before deciding to sign an agreement with them:
- How many projects (specifically what kind of projects: setting up of a foreign-owned business, market research, accounting, tax, etc.) have they worked on in the past years?
- Who are their clients?
- What is their service specialization? (Be mindful when service provider mention how they can do all kind of services, it is better to work with a service provider who has one strong service instead of ‘can do everything’)
- How big is their team or employee?
- Will there be any main PIC for the project?
- To whom should you address if there are any issues in the middle of the project?
- Will there be any compensation for any damage caused by the service provider?
How can Greenhouse Help?
Choosing the right service provider can be a hassle. On average, it takes months to research specific regulations. Not to mention the contradicting information, comparing service providers, and negotiating the fees before you agreed to work with a service provider.
Greenhouse takes care of these steps, so you don’t have to.
Whether you need market research, business matching, or company formation, Greenhouse’s platform provides a simpler, more transparent way for you to source the services you need to launch your business across the region.
Here are few simple steps you can take :
1. Sign up as a client on our platform here.
2. Login as a client here.
3. Select the scope of services you need.
Choose services you need on the marketplace.
4. Select your preferred service provider.
Click and select your preferred service provider on the marketplace.
5. Confirm payment.by using your credit or debit card, or bank transfer.
6. Service rendered.
The service provider will receive notification and confirm to work on your case.
In any case, if you still have any doubt in the middle of the process, our in-house consultant can always help to guide you in the process here.
Greenhouse will manage the invoicing process with no additional fees and be the 2nd point of contact throughout your entire process to make sure you understand the process.
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