Working in Singapore: How to start a business?
Singapore is one of the world’s biggest economies with a gross domestic product (GDP) of $400 billion, or $73,000 per capita. It is also recognized as the most friendly country to conduct business by the World Bank. Thus, it is no surprise that many people want to start a business in Singapore. If you fall into this category, this article will show you how to go about that.
Make sure you are ready
People tend to glamourize entrepreneurship, but the truth is that running a business is challenging. It is even more challenging than being an employee, so ensure that you are ready to face the obstacles. Ideally, you should be passionate about the industry that you are getting into.
You should also try to get some experience in a traditional workplace before diving into entrepreneurship. Entrepreneurs that founded a successful business straight out of high school or college tend to be glamorized, but they are in the minority. According to Harvard Business Review, the average age of a successful entrepreneur is 42.
Key steps to start
If you are sure of being ready, there are some key steps to follow to start your business:
1. Raise capital
Every business requires capital to start. It could be small or large capital depending on the type of enterprise you are starting. For example, you can build a mobile game for a few hundred dollars but will need thousands of dollars to design and build hardware.
Estimate how much capital you need and decide on how to fund it. You could rely on debt, angel investors, friends & family, venture capital, etc.
2. Register your business
You will need to incorporate your company to make it look more legitimate to customers. This is easy in Singapore, thanks to ACRA’s Bizfile website. First of all, you will have to reserve a corporate name for $15. Then you will need to pay to incorporate the entity:
- Limited Company ($315): This structure lets you create a business that is separate from your assets. You won’t be personally liable for any debts or claims incurred by the firm.
- Sole proprietor ($100): This is basically a one-person show. It is the easiest type of corporation to register. However, you are personally liable for any debts incurred by the firm.
- Partnership ($100): This is when two or more people set up a firm and agree to be personally liable for debts incurred by their firm.
3. Open a business bank account
You will need to open a business bank account to make transactions with customers or other firms easier. Most banks in Singapore offer this type of account, so you shouldn’t find it difficult to set up one. But you should watch out for important details like the minimum deposit, maintenance fee, wire charges, etc. Choose the one that is affordable and convenient for you.
4. Set up your office
After incorporating your firm, you will need to provide an office address to receive mail that concerns your operations. It isn’t compulsory to rent an office space for this. You can “rent” an address from a virtual office or apply for the Home Office Permit to use your home as an office.
5. Hire a team
You may need to hire other people to help you run your firm. Firstly, you must understand your employees’ rights and avoid breaking the law. Non-executive employees earning less than $2,600 and workmen earning less than $4,500 monthly are covered by the Employment Act. They must get at least 7 days of annual leave in their first year and at least 14 days in the following years. You must also give them at least 14 days of sick leave annually.
6. File corporate income tax
Ensure to pay the appropriate taxes to the Singaporean government. Corporation tax is a standard 17%. You won’t need to file a formal tax return if you have no chargeable income in a year or revenue of less than $5 million.
Need private health insurance in Singapore to cover you or your company?
If you need private insurance for yourself or your company, you can consider choosing MyHEALTH, which offers flexible plans.
Conclusion
Starting a business in Singapore isn’t difficult, given it is ranked as the most business-friendly country by the World Bank. We have shown you the steps to take to do that. But, if you are experiencing challenges, you can enlist the help of a platform like Osome.
