Why Start a Business in Singapore?
Singapore has long been recognised as a prime destination for foreign entrepreneurs due to its business-friendly environment, strategic location, and strong infrastructure. With a low corporate tax rate, access to global markets, and a stable political climate, the country provides an ideal setting for business success.
This guide outlines the key benefits of setting up a business in Singapore, the available business structures, and the essential steps to establish your company.
Benefits of Establishing a Business in Singapore
1. Business-Friendly Policies and Regulatory Framework
Singapore’s well-structured and transparent regulatory system encourages entrepreneurship and foreign investment. The streamlined company registration process, managed by the Accounting and Corporate Regulatory Authority (ACRA), ensures that applications—when properly submitted—can be processed within one to three working days. The simplified regulatory framework reduces bureaucratic obstacles, allowing business owners to focus on growing their enterprises.
2. Attractive Tax Incentives
Singapore’s corporate tax rate is capped at a competitive 17%, making it an appealing choice for foreign investors looking to maximise profitability. Additionally, newly established businesses can benefit from tax exemptions through the Start-up Tax Exemption Scheme (SUTE), which provides significant reductions on the first SGD 100,000 of chargeable income. These tax benefits allow businesses to reinvest their savings and fuel long-term growth.
3. Political Stability and Strong Legal Protections
Singapore’s stable political landscape fosters a secure and predictable business environment. Its robust legal system ensures fair dispute resolution and protects business interests, giving foreign entrepreneurs confidence in their investments.
4. Highly Skilled, Multilingual Workforce
Singapore boasts a well-educated, multilingual workforce, making it easier for businesses to operate across diverse markets. The government’s focus on education and professional training ensures access to talent across various industries, supporting innovation and business expansion.
5. Strong Intellectual Property (IP) Protections
Ranked among the world’s top countries for IP protection, Singapore enforces stringent laws covering patents, trademarks, and copyrights. These protections encourage businesses to invest in research and development with the assurance that their innovations are safeguarded.
6. World-Class Infrastructure
Singapore offers an advanced infrastructure network, including efficient public transport, secure banking services, and cutting-edge telecommunications. These elements collectively enhance business operations and facilitate seamless international transactions.
Access to Global Markets and Talent
1. Strategic Location for Regional and Global Trade
Positioned at the heart of Southeast Asia, Singapore serves as a gateway to ASEAN markets and major economies such as China, India, and Australia. Its strategic location enables businesses to establish strong regional networks and optimise their supply chains.
2. Favourable Trade Agreements
Singapore has secured Free Trade Agreements (FTAs) with multiple global economies, providing businesses with tariff-free access to international markets. These agreements reduce trade barriers, simplify customs processes, and enhance business expansion opportunities.
3. Open Economy and Support for Foreign Talent
The government actively fosters an open business environment that attracts global talent. Businesses can tap into a diverse talent pool while benefiting from policies that promote cross-border collaboration and knowledge-sharing.
4. Visa Schemes for Hiring Foreign Professionals
Singapore offers various work passes tailored to business needs, including:
- Employment Pass (EP): For hiring professionals and executives.
- S Pass: For mid-skilled workers.
- EntrePass: For foreign entrepreneurs starting innovative businesses.
These visa schemes help businesses build strong teams and sustain long-term growth.
5. Government Grants for Innovation and R&D
Singapore’s commitment to innovation is reinforced through government-funded research initiatives such as the Research Innovation Enterprise 2025 Plan (RIE2025). These programmes offer financial support to companies investing in cutting-edge solutions, fostering a thriving innovation ecosystem.
Pathway to Permanent Residency (PR) and Citizenship
1. Strengthening PR Applications Through Entrepreneurship
Operating a successful business in Singapore can significantly enhance an entrepreneur’s PR application. Contributing to the economy by creating jobs and investing in local talent demonstrates long-term commitment, which is a key factor in PR eligibility.
2. Global Investor Programme (GIP)
The Global Investor Programme (GIP) allows high-net-worth entrepreneurs to apply for PR by making substantial investments in Singaporean businesses or government-approved funds. This initiative offers a streamlined PR application process for qualified investors.
3. Advantages of Singapore Citizenship for Business Owners
Singaporean citizenship grants access to exclusive government funding schemes, competitive tax rates, and greater ease in securing contracts and partnerships. Additionally, citizens benefit from simplified banking processes, enabling easier access to financing.
Business Structures Available for Foreign Entrepreneurs
Foreign entrepreneurs can choose from several business structures when incorporating in Singapore.
1. Sole Proprietorship
- Best for: Small-scale businesses or freelancers.
- Pros: Easy registration process, minimal compliance requirements.
- Cons: Unlimited liability—business debts and legal issues can affect personal assets.
2. Private Limited Company (Pte Ltd)
- Best for: Most foreign entrepreneurs due to tax advantages and liability protection.
- Pros: Limited liability, eligibility for tax exemptions, higher credibility.
- Cons: Requires more compliance (e.g., appointing a company secretary, filing annual returns).
3. Branch Office
- Best for: Foreign companies looking to establish a presence without creating a separate entity.
- Pros: Direct extension of the parent company, leveraging its reputation.
- Cons: Liabilities extend to the parent company, limiting operational flexibility.
4. Subsidiary Company
- Best for: Foreign companies wanting operational independence.
- Pros: Separate legal entity, local tax benefits, full foreign ownership allowed.
- Cons: More complex setup and administrative requirements.
Essential Steps to Register a Business in Singapore
- Register the Business with ACRA
- Choose a unique company name.
- Select a business structure (e.g., Private Limited Company).
- Submit company details, including director and shareholder information.
- Open a Corporate Bank Account
- Required documents: ACRA registration, director’s identification, business plan, and financial projections.
- Appoint Directors and Shareholders
- At least one resident director is required (Singaporean, PR, or EntrePass/EP holder).
- Foreign entrepreneurs can own 100% of the shares.
- Hire a Company Secretary and Register an Office Address
- A company secretary must be appointed within six months of incorporation.
- A registered office address is mandatory for receiving official correspondence.
- Meet Minimum Capital Requirements
- A Private Limited Company requires only SGD 1 in paid-up capital, though certain industries may have higher requirements.
Work Passes and Permits for Foreign Entrepreneurs
1. EntrePass
Designed for foreign entrepreneurs starting innovative businesses, requiring proof of funding, intellectual property, or partnerships with research institutions.
2. Employment Pass (EP)
Suitable for business owners acting as company directors or professionals meeting minimum salary and qualification criteria.
3. Overseas Networks & Expertise (ONE) Pass
Aimed at top-tier global talent, offering flexibility to manage multiple businesses and bring dependents to Singapore.
Frequently Asked Questions
1. Can a foreigner start a business in Singapore without PR?
Yes, foreigners can fully own a business in Singapore without PR. However, they must appoint a local resident director to comply with regulatory requirements.
2. What is the best business structure for foreign entrepreneurs?
A Private Limited Company (Pte Ltd) is the preferred choice due to its liability protection, tax incentives, and credibility.
3. Is physical presence required to start a business in Singapore?
No, foreign entrepreneurs can register a company remotely. However, being in Singapore may facilitate operations, such as opening a corporate bank account.
4. What is the Global Investor Programme (GIP)?
The GIP allows high-net-worth individuals to apply for PR by making significant investments in Singaporean businesses or funds.
Conclusion
Starting a business in Singapore offers foreign entrepreneurs a wealth of opportunities. From a pro-business regulatory framework to global connectivity, the country provides a conducive environment for long-term success.
For tailored assistance, consider consulting an immigration and business setup expert to navigate the registration process and maximise your business potential in Singapore.
