The small island nation of Singapore rose to the top of World Bank’s best places to do business report six years ago and has never surrendered the number one position since.
The report claims it takes just three days to start a business in Singapore. And isn’t that the way businesses owners like it? Fast and easy. No fuss.
In an article posted on Business Insider, Saranya Kapur writes, “Apart from its business-friendly laws and flexible immigration policy, one big reason why Singapore has dominated the list for so long is its simple method for filing taxes.” The World Bank report puts the U.S. in 4th position overall, but 64th in terms of ease of paying taxes.
The process of Set Up a New Business in Singapore can be summarized in 3 simple steps:
1. Choose your business entity
Though options exist, many new companies register with the Accounting & Corporate Regulatory Authority (ACRA) as “private limited companies” due to its scalability. On top of that, shareholders are not liable for debts and losses beyond their share capital.
Designated as such, your company is recognized as a taxable entity.
2. Set up your company
The private limited company is governed by the Singapore Companies Act, and must comply with its laws under ACRA and the Inland Revenue Authority of Singapore (IRAS). Designations include:
- Company name – Must be approved by the ACRA.
- Shareholders – Minimum of one.
- Directors – At least one director must reside in Singapore.
- Company Secretary – Also must be a Singapore resident.
- Paid-up capital – At least S$1
- Registered address – A physical office address is required.
As a newly-incorporated Singapore company, you may purchase a Business Profile from ACRA. This electronic report details information regarding your business, including your registration number (UEN), registration date, shareholders etc. This profile will be required to open a corporate bank account, apply for licenses and permits and check on potential business partners.
3. Open a bank account
After incorporating, you can open a bank account in Singapore. You may choose from a variety of local as well as international banks.
Business Processes That Follow Incorporation
Additional post-registration activities may include:
Licenses and permits – Some business activities require approval or a license from government authorities. Examples include: private schools, video companies, travel agencies, liquor distributors, money lenders, banks, financial advisers, childcare centers, and importers, wholesalers and retailers of liquor.
Registered office hours – You must register your office address and hours (minimum of three hours per weekday).
Registration number – The business registration number issued by ACRA must be on all your documents used for official business communications.
Customs registration – If your business involves importing or exporting, you must register your company with the Singapore customs.
Goods and services tax registration – Goods and Services Tax (GST) is a tax on the supply of goods and services in Singapore and on the import of goods into Singapore. You must register for GST if your annual taxable revenue exceeds S$1 million per year.
Registration with Singapore Central Provident Fund (CPF) – The Central Provident Fund or CPF is a compulsory pension fund scheme in which the employer and Singapore citizen/permanent resident employee contribute a percentage of the monthly salary to the fund.