Navigating Singapore’s Business Landscape: Tips for Entrepreneurs

Singapore is renowned for welcoming businesses from all over the world. Boasting a strategic location, political stability, and an open economy, it is no surprise that it has become a hotbed for enterprise. It is widely considered to be one of the easiest places on the planet to do business, but like anywhere else, entrepreneurs there must comply with the local laws and tax scheme. Here are some things to consider before doing business in Singapore.

Your Business Structure

Like they would do in any other country, one of the first things entrepreneurs coming to Singapore need to do is decide is the legal structure of their business. The available options include sole proprietorship, partnership, limited liability partnership, and private limited company. These offer different levels of flexibility and liability for shareholders, and can have a big impact on taxation, as well as what happens if the company gets into legal difficulties or becomes bankrupt.

The choice of structure also depends partly on the business model and how it will be scaled. Consulting with an agency that offers Tax advisory & planning in Singapore can help entrepreneurs make the right choice regarding this foundational decision.

The Tax Regime

The services of a tax advisor can also be useful for making the most of Singapore’s generous tax regime. This is one of the most attractive features for business people, as Singapore’s authorities charge no capital gains tax and a flat corporate tax rate of 17%. There are also exemptions for startups.

However, taxes for businesses are never totally straightforward, especially for those with income streams in multiple countries. Careful planning can help minimise your liabilities while remaining compliant, ensuring that your business retains the money it needs for growth and provisions, as well as receives any relief it is entitled to.

Tax Residency Status

Not every company operating in Singapore is recognised as a tax resident there, meaning that they may not benefit from its generous policies. Generally, a company needs to be registered and governed in Singapore to have its tax residency there. This means that board meetings must take place locally, which is something else that entrepreneurs must factor into their plans.

Banking and Finance

Once a business has been registered in Singapore, it is usually quite straightforward to open a corporate bank account. This is essential for keeping your business finances separate from your personal finances. Typically, you must provide the bank with your registration documents, details of the shareholders and directors, and a business plan. The banks will then do their own due diligence, but once your account is open it will be easier to access business loans and other types of finance.

Many banks in Singapore offer corporate accounts which are specifically designed for SMEs, and these usually include features such as support for multiple currencies, online banking, and integration with popular accounting software.

Employment Regulations

Singapore’s workforce is well-educated and multilingual, with particular expertise in areas like finance and technology. However, it is important that businesses that employ them comply with the local laws, which include paying a minimum wage and contributing to a pension scheme. The rights of foreign employees are similarly protected, and they are also required to meet certain criteria relating to their salary, qualifications, and experience.

Employment policies in Singapore are regularly updated, and it is important to keep on top of the changes. This is another area where a local advisor can be valuable, or it can be the duty of somebody involved in the human resources side of the business.

Licenses and Industry-Specific Regulations

Depending on your area of business, you may require permission from certain departments of Singapore’s government before you can start operating. For example, financial firms usually need approval from the Monetary Authority of Singapore, while food businesses are regulated by the Singapore Food Agency. Receiving the approval or licenses your business needs should be done as soon as possible to avoid operational delays.

Once your business is approved and operating, it is essential to ensure that you continue to comply with Singapore’s safety, health, and consumer-protection protocols.

Government Grants and Support

While businesses in certain industries must seek approval from relevant government departments, many are also entitled to the grants and support that the business-friendly government offers. These are provided to help incentivise entrepreneurship. Of course, these schemes are often highly competitive, and success requires selling the governing bodies on your business plan. But the rewards can be substantial, making an especially big difference to SMEs.

Conclusion

Few countries are considered as business-friendly as Singapore, but there are still lots of important factors for entrepreneurs to consider before establishing themselves there. In return for offering such an attractive commercial environment, the city-state expects strict compliance with its legislation, meaning that businesses must operate with the permissions they need and meet their employment and tax obligations.