May 12, 2020
Embarking on a new business venture can be scary, but also incredibly rewarding. If you’re looking to take the jump and kick-start a new business, here are some key points to consider.
Before anything else, you would have to decide on the type of business structure that is most appropriate for you and the nature of your business. After figuring out the type of business you would like to run and the industry you would be in, you may then proceed onto registering your business in Singapore.
The various business structures are listed below.
The liabilities of the owners of an LLC are limited to the companies assets, while their personal assets are protected from business liabilities.
In essence, a Limited Liability Company is an enterprise that is limited by shares, for their liabilities are limited to the amount of its share capital.
The three kinds of LLC are Private Limited Company, Public Limited Company, and Public Company Limited by Guarantee.
A Sole Proprietorship is a business built and run by one person. The owner of the business owns all the assets and plays all roles in the business. In this, there is zero protection of personal assets in the case of business risks. If the business is unable to meet obligations, creditors are entitled to procure the assets that have been agreed upon.
While a sole proprietorship may seem enticing and the easiest way to get your business off the ground, it is important to note that it is essentially a one-man show, where you will have to wear many hats and carry out many different tasks. In terms of risk, it is considerably high as the owner of the business is liable for all the liabilities and risks incurred by their business. The selling of personal assets to settle losses and debts of their businesses is a possibility.
Partnerships involve two or more people forming a joint business. The three business structures are General partnership, Limited partnership, and Limited Liability partnership.
Now that you've got an idea of what you want to do, you'll need to fund your dreams before they turn into reality. Many people start by using their personal savings and borrowing from acquaintances. Depending on the type of funding you require, this might not be the best option.
There are several schemes available for budding entrepreneurs:
Obtaining the right scheme requires you to figure out which matches your needs best. SPRING is one good option to seek out as they aim to provide support for workable innovative business ideas. For more information on schemes, check out our article on it here.
For other resources to receive guidance and obtain funding, do check out the following:
Now you need to network to get a better grasp of the industry you're entering. Seek out a trade membership and industry associations to get opportunities and network with trade veterans. Be proactive and take part in industry events, be it start-up meets, trade shows, exhibitions, and seminars.
Working from home is a viable option for fresh start-ups, especially amidst the current pandemic. Working from home saves money and is efficient if you implement the proper communication tools. This is suggested if you are a sole proprietor or have 3 persons or less in your company.
As your business grows, you can shift to a proper office space. Establishing a proper office has two considerations to keep in mind: space itself, and your staff.
Rent for commercial spaces is high, and competitive to obtain. Before renting, consider your staffing needs.
A proper plan with regards to staffing is needed. Be sure to map out the number of employees necessary for your first year of operations. It is important to get a proper estimate of the amount you'll spend on staff so that you can plan around it.
Before hiring employees or starting operations, you are required to register your business. To register your business, you would need to prepare the details of all aspects of your business; from the company name to the details of leadership. Registration can be done with the Accounting and Corporate Regulatory Authority of Singapore, ACRA.
If registration is successful, you will receive a confirmation email with the business registration number enclosed. The email and e-certification are eligible for use in Singapore.
The original email regarding the successful application and the registered business profile are two vital documents that you will need when applying for anything related to your business.
Once you have registered your business, you may proceed to apply for the necessary permits to start your it.
After deciding which structure is most appropriate for you, it is best to conduct research on the permits you are required to obtain with relevance to your business.
GoBusiness Licensing, a government initiative, has a full list of resources for enterprising individuals. You may refer to their website for the exhaustive list of permits, as well as apply for them here.
Businesses can tap into the resources provided by the government to ease the hiring process. The Workforce Development Agency, WDA, has initiated a job bank so that start-up businesses can access a pool of talented potential employees.
It is also beneficial for you to read up on the responsibilities of an employer. For instance, the Employment Act mandates that employers pay their employees within a week after their stated salary period. Employees are also entitled to rest days and medical leaves. Taking note of the duties of an employer is vital in ensuring your business runs smoothly by happy employees.
A tax-resident company in Singapore is one if it has been operating in Singapore for the preceding Year of Assessment; a 12-month period in which the company will be evaluated.
A Singapore tax-resident company enjoys benefits such as being able to avoid double taxation of certain incomes in countries that Singapore has signed an agreement with.
Apart from not being taxed twice in foreign deals, for the first 3 Year of Assessments, start-ups can enjoy 75% tax exemption for the first S$100,000 of chargeable income.
More information on corporate taxes can be found here.
For the application of a bank account, a rough gauge of the necessary documents would be the account application, a copy of the owner’s NRIC, the latest print out of the business profile, a minimum deposit, and other documents per the banks request.
Most banks offer quick, digital account applications so we do not expect this to be an issue for most, provided all required documents are furnished.
With the booming of fintech, There are also some digibanks or neobanks providing fully online digital banking experiences. We will cover them in another article.
The key difference between starting a business at home and a regular business is an office space. Operating from home eliminates your need for a traditional office and gives you more flexibility with your budget.
As your business operates out of your home, you will need a designated space to work efficiently. Depending on your work and type of business, it could either be a room, portion of your living room, or a simple desk.
You will need to keep your workspace organised so that you can work effectively. Seek out what you need to boost productivity. Alternatively, if you're working in a trade, you'll need to obtain the necessary tools and keep the space tidy.
You'll need to communicate and stay online if you're working from home. Here is a list of items you might need to function:
A business plan will help you figure out what you want to do and how you're going to do it. You will need to figure out your target audience and the type of business you're opening. The key features of a standard business plan include an executive summary, products and services, company overview, market strategy and analysis, and a financial overview. It is essential to establish these points before beginning operations.
Now that you have decided what and where you want to operate your business, you'll need to obtain the necessary licensing and registration. For instance, if you're working from home, you need to apply for the Home Office Scheme. There are some guidelines you need to follow on the URA website and HDB website.
If your new business needs financing, do contact our sales team to have a chat!
The requirements for company registration in Singapore are:
1) Company name – Must be approved by the ACRA.
2) Shares and Shareholders - must have at least one shareholder and the minimum issued capital must be at least $1.
3) Directors – At least one director must reside in Singapore.
4) Company Secretary – Also must be a Singapore resident.
5) Paid-up capital – At least S$1.
6) Registered Office Address and Constitution – A physical office address is required.
More information on company registration can be found here.
Basic cost of company incorporation with ACRA involves two things:
Application to register a company name (S$15)
Fees for Singapore company registration (S$300)
Once all the documents are ready, it normally takes 1 day to incorporate a company in Singapore.
The legal requirements to register a Singapore company are the same for Singaporeans and foreigners. They are as follows:
A minimum initial paid capital of S$1
At least one shareholder (maximum 50)
At least one local resident director
At least one qualified local company secretary
Registered local address for the company