How to start your business in Singapore from the Philippines/Cambodia?
Many multinational corporations have based their headquarters in Asia's most prominent business hub, Singapore. Many are even using it to enter the emerging markets in Southeast Asia. So, what attracts them are, in fact, interesting telltale signs of business opportunities waiting to be explored. Besides, there are multiple reasons that have helped Singapore become the business epicenter of Southeast Asia.
If you are a business owner from the Philippines or Cambodia, trying to know how to start a business in Singapore, read the guide below.
We have divided it into three parts:
- Why is Singapore a great place to set up a business?
- How to start a business in Singapore?
- What to do to start a business in Singapore?
Why is Singapore a great place to set up a business?
Starting A Business Is Easy
Registering a company is easier and quicker in Singapore than most other countries considered business friendly. The process may take only a day if all the requirements are duly met.
The proximity to emerging markets has made Singapore a top player across industries. Daily inbound and outbound flights make running a business easier. Also, Singapore’s port is one of the busiest ports in the world.
Stable Political System
The stability in the political environment provides security to investors and entrepreneurs. Also, the crime rate is low, and the anti-corruption laws are strictly imposed, turning the legal system into one of the best in Asia.
The world’s top organizations such as the World Economic Forum, World Bank, and Global Information Technology recognize Singapore as one of the most business-friendly countries. As a result, many MNCs have now based their headquarters in Singapore.
Wide Air Connectivity
Every 80 seconds, a flight takes off or lands at the Singapore Changi International Airport. Over 100 airlines fly to approximately 400 cities in 100 countries.
Best IP Protection
In the World Economic Forum’s Global Competitiveness Report 2019, Singapore is ranked second in Asia for delivering the best IP protection. It is also the best innovative nation in Asia and ranks eighth worldwide.
Easy access to funding
The banking hub of Southeast Asia, Singapore, has over 200 banks operating from its land. It is also the largest foreign exchange center globally. Businesses get access to banking services at as low as 1%.
Best Corporate Tax Rates
The corporate tax rate of Singapore is the lowest in the world at 17%. Moreover, a new startup can enjoy several tax exemptions. 75% on the first $100,000 of the chargeable income and another 50% on taxable income of $1,00,000.
World Class Infrastructure
The infrastructure quality in Singapore is considered one of the best in the world. By 2030, it is estimated that 8 in 10 residences would be at 10 minutes distance from a railway station.
How to start a business in Singapore?
The previous section highlights the various reasons why Singapore is the best country to start a business. Now we will discuss how to start a business in Singapore.
Before we proceed, please read the legal obligations one needs to fulfill to start a business in Singapore.
- An initial paid capital of S$1
- At least one shareholder (maximum 50 allowed)
- One residential director
- One company secretary (must be qualified)
- Local address registered
Any foreigner, including a Filipino or Cambodian, can set up a business in Singapore if he has attained the age of 18. However, a foreign national has a few additional requirements not needed by a Singapore resident.
Let’s begin to understand them.
Singapore law states that a foreign company registered in Singapore should have a minimum of one director who is a Singapore resident. If a foreigner seeking registration for his business has no person to act as a nominee director, he can seek a local resident to act as a director at a price.
Some businesses do not want outsiders to be appointed as a director in their company. They can appoint themselves after the Singapore government approves their Entrepreneur pass or Employment pass. In this case, they would not need a nominee director.
However, to apply for a work pass, one should move and have a place of residence in Singapore. Do not seek a pass if there is no desire to relocate. Hiring a local is a better option.
Note: Nominee director should be a permanent resident or citizen of Singapore and have a permanent Singapore address.
As a foreigner opening a company in Singapore, one must appoint a company secretary. He must be a resident of Singapore who understands Singapore company laws. This appointment should be done within the first six months of the incorporation of the company.
The Company’s Board of directors can pass a resolution for the new inclusion. The person to be appointed should also complete the consent to act for the position. Moreover, a third-party provider can also be asked to act as a company secretary.
Not everyone can act as a company secretary. He must fulfill a few requirements, such as,
He must be a Singapore citizen, a permanent resident, or an Entrepass holder.
His main residence should be in Singapore.
He must have deep knowledge of Singapore company law. Experience in company fillings is sometimes preferred.
When appointing a company secretary, a foreign company must file a form with Accounting and Corporate Authority (ACRA). The locals can use the BizFile - Business Filing Portal of ACRA for this purpose. However, foreigners are not allowed to self-register. They can take the services of a company incorporation services provider or an agent.
A company secretary has several roles to play in your company:
Advisor: He guides the directors on their duties. He ensures that the company is in line with Singapore company regulations.
Liaison Officer: Maintains communication with the shareholders and beholds their interests.
Compliance officer: Guide on ethical business practices and corporate governance.
Act as a Fiduciary: Safeguard trade secrets and confidential information of the company.
You might want to consider Ecovis,
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A Filipino or Cambodian owner must have a local Singapore address registered as their company address. As a foreigner, one requires to have three addresses as highlighted in the table.
(for Sole Proprietorship, Partnership, and LPs)
Applicable on HDB and private properties.
It requires approval from URA and HDB.
Registered office address
(for LLPs and Companies)
The registered office address may or may not be at the same place as its activities.
At the time of registration, provide a home address to ACRA.
Consider an alternate address if you do not wish to provide a residential address.
It is shown in the business profile and not under the residential address. It must be a contactable address.
Note: By no means, the local address can be a PO box.
Once you are through the above, it is time to get rolling to the main procedure.
What to do to start a business in Singapore?
Get your company's name approved by ACRA. To get quick approval, keep the name thoughtful, unique, and readable. Do not use vulgar words in the name, and it should be free of copyright infringement. Words like "Bank," "Media," "Finance" may require approval from other authorities and thus may take time.
Go online and open Bizfile+ for online registration of the company’s name. Once approved, incorporate your company within 60 days or ask for an extension.
Documents required to set up your company:
- Company name (as registered with ACRA)
- A small description of the business activities
- Details of the directors, shareholders, and company secretary
- Details of the company’s registered address
- Copy of passport and foreign residence
- Copy of memorandum and Articles of Association
After you have registered your company, look to accomplish the following:
Certificate of Incorporation
You will receive an email from ACRA verifying the company's incorporation containing the company's registration number. You can also make an online request to obtain a hard copy; however, the soft copy received is sufficient and is considered an official Certificate of Incorporation.
After receiving a Certificate of Incorporation, get the company's business profile. This includes the company's name, registration number, date, principal business activities, registered address, paid-up capital, directors, company secretary, and shareholders' details.
Pay a nominal fee to get the business profile. It arrives in a PDF file format. One can download it in an hour of making the request. Both Certificate of Incorporation and Business Profile are required for purposes such as to open a business account, sign a lease, subscribe to telephone and internet, and more.
Business Permit and Licenses
Whether one needs licenses and permits or not depends on the business activities. For instance, travel agencies, cleaning services, restaurants, educational institutes, import/export require permission to start their operation.
A company stamp is a rubber stamp needed to authenticate some documents. This is usually kept by the company secretary and is unique to all companies.
A foreigner must comply with ACRA requirements to obtain a customized company stamp. It may cost anywhere between $10 to $35 and can be made in a few hours to a few days by dealers and sellers.
The table below shows the tax rate for the first three years of a newly incorporated company in Singapore.
100001 - 20000
200001 - 2000000
A Business Account
To start your business in Singapore, one must open a corporate business account. The account signatories and company directors (all major) should be physically present for the paperwork. A few banks may allow doing so at their overseas branch in the presence of a Notary Public.
Besides, the bank seeks the following documents from a Filipino or Cambodian business owner:
Corporate Account Opening Forms. These must be duly filled with signatures of all the authorized signatories.
A resolution by the Board of Directors that sanctions opening of business accounts.
A certified copy of Certificate of Incorporation. It must be validated by one of the directors or a certified company secretary.
Company's business profile, a certified true copy of company registrar. It must be validated by one of the directors or company secretary.
A copy of Memorandum and Articles of Association. It must be validated by one of the directors or company secretary.
Passport or Singapore IC along with residential proof of the signatories, directors, and beneficiary owners. All certified true copies.
Note: The signatories' physical presence helps prevent delays in opening a business account, be it a Singapore bank or an international bank.
Cost to start a business in Singapore
Besides knowing how to start a business in Singapore, you must know the price of getting started. The process is simple if you do it right. The starting fee is segregated into two parts to help you understand the cost division:
Application for registering a company name - (S$15)
Singapore company registration fee (S$300)
Other than the above, you may have to shell money for hiring a company secretary, nominee director, office address.
Open a business account with AP-1.
If opening a business account with a bank is too overwhelming, try AP-1 Business. It is an excellent alternative to the traditional banking system. AP-1 is a digital account that offers all the financial services one would need to run a business efficiently on foreign land.
While a bank typically asks to maintain a minimum balance, AP-1 doesn’t have any minimum balance requirement. Due to its digital onboarding process, it also doesn’t require a company director’s physical presence to open a bank account. In addition, no limitation is extended on the number of shareholders and foreign ownership. Remittances and business payments are much faster and certain than a typical bank. AP-1 has an integrated UnionPay and Visa solution for money transfers to China and the rest of the world, while enabling prompt settlement and collection of sales proceeds at T+1 for various payment acceptance methods – UnionPay, WeChat Pay, PayNow, JCB, Discover and Diners Club.
The remittance time to a UnionPay personal account is less than a minute while it may take days with a bank as it verifies several things. When sending money to another bank’s account, it may take 3-5 days with AP-1. Lastly, its ATM cash withdrawal feature will also be rolled out soon, in the second quarter of 2021. So, if you’re looking to save time and save money, sign up for the digital account and let your business soar on the island city of Singapore.