Singapore is one of the most welcoming and appealing places in the world to expand your business.
A favourable tax system. Incredible infrastructure. Consistently rated highly in education, healthcare, housing and more. Not to mention its incredible position – both geographically and politically – as one of the major business hubs of the Asian Pacific (APAC) region.
Singapore is also rated second in the world – behind only New Zealand – as the easiest place to set up a business. It is often measured as the fourth-largest financial hub on the planet for very good reason.
But what are the key considerations when expanding your business to Singapore? Are there are any common mistakes? What do most business owners overlook?
Why expand your business to Singapore?
Large numbers of multinational corporations and overseas organisations, including many charities, have been flooding to use Singapore as a base for their activities in the region in recent years. There is a wide range of reasons for this, all contributing to Singapore’s reputation as a safe, sensible and reliable place to do business:
1) Easy business set-up
The World Bank rates Singapore as second in the world in its “ease of business” rankings. It’s also highly rated by the World Economic Forum and various other major international bodies.
The process of setting up a business in Singapore can take a matter of days or even hours. It’s not uncommon for a private limited company (the most popular business type) to be set up only a day or two after due diligence has been completed. Incorporation costs are low, you only need a single resident director, and there is no minimum paid-in share capital.
The application process can take place online via ACRA (the Accounting and Corporate Regulatory Authority of Singapore). This is so much easier than traditional methods of setting up a business that it is often mentioned as part of the attraction of Singapore by entrepreneurs who have recently decided to incorporate here.
2) Stability and security
Singapore is perhaps the most stable country in Asia in terms of politics. Local investors feel confident and secure and enjoy living in a country that has one of the lowest crime rates and highest personal safety rates in the entire world.
The country also consistently does well in quality of life surveys. It features large numbers of great places to dine, a huge variety of entertainment options, globally famous schools and universities, and a kind of positive cosmopolitan atmosphere that it’s difficult to find elsewhere.
3) Great infrastructure
On top of the conveniences and extra benefits of being a truly global city, Singapore’s success is based on its excellent infrastructure.
This can be seen both in its technological infrastructure – Singapore has one of the fastest internet speeds in the world – as well as the legal codes and government policies in place, most of which are designed to support and promote businesses of all kinds. Intellectual Property rights are very well protected too.
There are also many opportunities for start-ups and SMEs to get government or venture capital funding. Singapore, as may be obvious by now, wants your business.
4) Beneficial tax system
Both at home and abroad, Singapore’s tax system makes business owners love it. At home:
- The highest corporate tax rate has been 17% for over a decade and applies to both local and foreign companies.
- There are numerous government subsidies, incentives and other ways to actually end up paying less than this.
- There is a 0% tax on capital gains and dividend income.
Internationally, foreign income that has been subjected to tax in a country that has a tax rate of at least 15% is tax-exempt in Singapore. This is because Singapore has Double Tax Agreements with over 80 countries, enabling the island nation to set up preferential systems that allow taxpayers to avoid paying twice.
This all adds up to Singapore being one of the leading choices in the world for companies to incorporate themselves or to set up local offices.
5) Strategic location
Singapore also benefits hugely from its strategic position in the Asia Pacific region. It has variously been called the “Gateway to the ASEAN” (the Association of South-East Asian Nations, an economic union of 10 major economies of South-East Asia), noted as being on the direct sea route between India and China, and recognised as one of the world’s most powerful transportation hubs.
From Singapore Changi International – often touted as being the best airport in the world – you can reach 50% of the people on the planet within six hours. Singapore’s sea-based transport hubs are equally impressive and have won several awards.
6) Talent and recruitment
Say goodbye to Silicon Valley as the global home of world-leading talent and hello to Singapore – as of 2017, reputed to be the best place in the world for start-ups and SMEs to look for skilled professionals.
Singaporeans are almost always multilingual, they come from a multicultural, multiracial society that is largely harmonious, and many can be highly skilled thanks to the incredible education facilities available locally. The reputation that the Singaporean workforce has gained globally is of people who tend to be hardworking and highly motivated.
The Singaporean government is committed to attracting global talent too. There are several different visa schemes for professionals and the country has very liberal immigration policies.
How to expand your business to Singapore
For all its benefits, expanding your business to Singapore does taking some forethought and planning. There are certain challenges of operating here. They are outweighed by the advantages to be sure, but they are still present.
Some of the most important steps to take before you start the application process include:
1) Research the market
As you would when entering any new market, prior research is an absolute must. Working with a local partner is often the best way to accelerate the process. You need to be able to answer the usual key questions about a new market:
- Does the type of product or service you offer have a ready audience in Singapore or the APAC region?
- What does an ideal customer from the APAC region look like to you?
- Are you aware of potential local and international competitors?
Extensive market search and analysis is vital. Make sure you have a proper plan in place before you are lured in by the benefits of expanding your business to Singapore.
2) Choose the right business structure
There are several types of business structure available to those opening a company in Singapore. Chiefly, these are the sole trader, partnership, LLC (Limited Liability Company), and PLC (Private Limited Company). Most businesses in Singapore are PLCs, primarily because they scale easily and offer the usual limited liabilities.
Since 2020, the COVID-19 pandemic and the various issues experienced by global companies have led to an increased desire to insulate various constituent parts of companies from danger. Splitting a business between holding companies and management companies is a common strategy for addressing this.
There is also the “re-domiciliation scheme”. This is the result of the Singapore government’s desire for foreign corporations to transfer their registration to Singapore and allows them to do so while keeping all of their same branding and history.
Overall, the ideal business structure for you will vary depending on the type and size of your organisation and almost always calls for professional advice from those with experience in the region. But the odds are that Singapore offers the right solution for your needs.
3) Get an address
Before you can move on to register your business, you need to have a physical address to list on all of the relevant documentation. This cannot be a P.O. Box number.
Choosing the right location for your business is as important a consideration as ever. It should also be said that renting commercial property in Singapore can be very expensive and highly competitive.
There is a Home Office Scheme that may be suitable for some business types, allowing you to use your home address as your business address. Only certain business types – these tend to be very small-scale and need to cause zero disruption to your neighbours – qualify for this scheme though.
4) Register your business in Singapore
The next step of expanding your business to Singapore is registration. The relevant body is again the ACRA. To register, you need two local agents who must be permanent residents of Singapore or foreigners with the relevant employment pass.
The Ministry of Manpower – often abbreviated as MoM, the government ministry responsible for creating and implementing labour policies – also offers an EntrePass. This allows eligible foreign entrepreneurs to start or run a business in Singapore.
Applying for anything from the MoM requires precise translations of many relevant documents. The standards the MoM expects are high. Asian Absolute has not yet failed to meet them. But be aware that not all translation agencies can say the same.
There are very few types of business that are exempt from the need to register. Trade unions and tax-exempt organisations are two entries from a very shortlist. Even online or web-based businesses that sell goods need to register to do business in Singapore, as do small home-based businesses.
5) Apply for license and permits
As soon as you have incorporated and registered your new or existing company in Singapore, you need to apply for the correct permits and licenses.
These are required by many different types of businesses if they want to operate in Singapore. For instance, if you are a manufacturer, you need to register your factory premises with the MoM before you start operating.
Some types of businesses need multiple licenses and permits, so it is always best to confirm with an expert that you have all of the correct ones. However, the application process itself happens online and is relatively straightforward.
6) Register your domain and localise your website
Of course, your website will be the first point of interaction the vast majority of your local Singaporean and possibly all South-East Asian clients will have with your business. This makes choosing and registering a suitable Singaporean domain name an absolute must. You should also be sure to correctly localise your website for Singapore and most likely other South-East Asian audiences.
Singapore alone has four official languages. Malay might be the national language, but English is the de facto main language – it is the standard language in most classes in the educational system. Mandarin, as well as other varieties of Chinese, in addition to Tamil, are also in heavy use by segments of the population.
It is important to remember not only that the quality of translation you use for your website demonstrates your company’s commitment to the region – Google Translate will do you no favours – but also that you should localise as oppose to translate.
Localisation involves fully adapting your website so that it is natural for people from different cultures to use. Directly translating the words on the screen will achieve substandard results at best.
7) Locate funding if necessary
Singapore is widely regarded by those leading financial institutions – as well as among businesspeople worldwide – for the support it provides to businesses. There are a number of schemes and organisations in place through which you may be able to secure funding even as a foreigner:
- The Business Angel Scheme
- The Sector-Specific Accelerator Programme
- The Start-up Enterprise Development Scheme
- The Technology Enterprise Commercialisation Scheme
- The Asian Community for Entrepreneurship (ACE)
- BANSEA, Asia’s oldest Angel investor network
8) Struggling? Get expert advice
Singapore has done a lot of hard work to make itself as pro-business as possible. You can even get free government advice as to how to best take advantage of the various schemes on offer. Enquire with:
- ACRA (the Accounting and Corporate Regulatory Authority)
- Your chosen Language Service Provider (LSP) and other local partners
- SPRING (the Standards, Productivity and Innovation Board)
- EDB (the Economic Development Board)
What to consider when expanding your business to Singapore
Singapore is a very inviting place to expand your business into. The island state has done almost everything it can to provide a welcoming environment for foreign business and investment – to the point where the government even offers you advice as to how to best take advantage of the schemes they have in place. The city itself also has many advantages:
It is an incredibly strategic regional trading centre. It has a smart, business-friendly tax regime. Businesses are easy to set up. It has an ever-expanding talent pool for recruitment.
Yet you can’t expect this welcoming environment to lead to automatic success when expanding your business to Singapore. You need to make sure you research the right market, register correctly, apply to the right authorities, and master the multilingual nature of Singapore society if you want your latest expansion to achieve the results you deserve.
Expanding your business to Singapore?
From Asian Absolute‘s local office in central Singapore and our other offices around the world, we help companies in every industry take their first steps into South-East Asia with confidence.
Discuss your latest move with an expert today. No commitment. Just clear information about how we can help you blaze a trail.