How Can a Foreigner Start a Business in Singapore?
When it comes to starting a new business, you are likely to have a lot of questions in your mind. If you are a foreigner and want to start a business in Singapore, you’ll face more complications if you are not familiar with the process.
Therefore, this post aims to discuss how a foreigner can start a business in Singapore easily.
Requirements for Foreigners to Start a Business in Singapore
There are certain requirements that every foreigner must keep in mind while starting a business in Singapore. These requirements are:
1. Appoint a Local Director
You will need a local person to act as the resident director of the company. This is necessary during the process of Singapore company registration. The shareholders of the company will have to pass a resolution to hire a local director. The person must be older than 18 years old and have the skills to carry out the duties of a director.
2. Employment Pass Holders
The law also allows employment pass holders to register a company in Singapore. However, they cannot work as the local or resident directors of the company. Hence, the employment pass holders must hire at least one local director while starting a company.
Type of Company
Choosing the right type of company is also an important part of establishing a successful business in Singapore. A foreigner can establish the following types of companies in Singapore:
A. Private Limited Company
A private limited company is a highly popular type of company in Singapore company registration. Such companies can have up to 50 shareholders. If you are establishing a private company, you will have to hire at least one local director who does not reside in Singapore.
It is important to note that a private limited company has a separate legal entity from the owner. In other words, it will have all the rights of a natural person. The owner of a private limited company will have to pay a corporate tax of up to 17%. However, this tax can be significantly reduced with the help of tax concessions.
Generally, the banks and financial institutions in Singapore consider private limited companies to be much more credible than a sole proprietorship or partnership. As a result, it is easier for private companies to get funds and expand their business activities.
B. Sole Proprietorship
A sole proprietorship is a business firm suitable for people who want to establish a risk-free company. It does not have a separate legal entity from the proprietor. Moreover, the owner of the company has unlimited liability for the debts and losses. The owner will have to pay a personal income tax of up to 22%.
C. Limited Liability Partnership
According to the Singapore Company Law, two or more individuals can register a limited liability partnership. An LLP is considered to be a separate legal entity from the owners. The liability of the owners of LLP is dependent on actions, inactions, and losses of the LLP. The partners are required to pay a personal income tax of up to 22% from the income generated through LLP.
Things to Consider After Singapore Company Registration
Once you have incorporated your company in Singapore, you will have to consider some important factors.
Generally, running a business in Singapore is easy because most service businesses do not require a special license. However, it all depends on your type of business. If you are running a company related to industries like financial services, construction, education, or another such sector, you should get help from the experts and accounting firms in Singapore to ensure you have all of the required licenses.
You will have to find a suitable workplace to set up your offices. Co-working spaces attract a lot of attention nowadays, so you can also find such affordable places. Moreover, you will have to focus on hiring skilful and qualified people who can help you in running a successful business.
All in All
By keeping these factors in mind, you should have no issue getting through the Singapore company registration process. If you still face any issues, you can contact professional accounting firms in Singapore to get help from experienced and professional individuals who can help you in setting up a business in Singapore.
For more information, feel free to get in touch with us.