What do you need to know before starting a business in Singapore as a foreigner?
- 100% company ownership
- Local or resident director requirement
- Entreepass or employment pass
- Registered filing agents
- Singapore laws and regulations
Overview
- Due to foreign business’ impact on the economy, Singapore enables foreigners to completely own their companies.
- Foreign-owned companies must have at least two local residents in their organisation. This is a requirement to facilitate government communication and compliance.
- Physical presence is often required for company incorporation. Foreign entrepreneurs and employees may need an EntrePass or Employment Pass.
- Filing agents assist foreigners who cannot be present during incorporation. They will prepare and file the necessary documents.
- Familiarity with Singapore’s laws and regulations is crucial for operations. This is necessary to comply with industry-specific requirements.
Singapore has been consistent in cultivating a pro-business landscape. It offers abundant advantages for companies established in their city-state. This includes tax exemptions, proximity to global markets, and convenient incorporation. However, their business-friendly environment is not only for its residents.
In this article, we dive into the things you need to know before starting a business in Singapore as a foreigner. This will help you gain insight into why this country has been a consistent topper as one of the best places to do business.
100% Company Ownership
Singapore has been welcoming to expatriates. In 2020, approximately 43% of the country’s population were immigrants from neighbouring Asian countries. However, this is not only the reason for its friendliness to non-citizens. This is especially true when it comes to business ownership.
In, 2022, Foreign Direct Investments (FDI) contributed to at least 31.7 % of the country’s overall nominal GDP. This means that foreigners have been a leading factor in the steady and growing economy. That is why they continue to strengthen this relationship by allowing 100% foreign ownership.
Apart from that, the city-state has developed many schemes that can support the various entrepreneurs. This includes tax exemptions under Section 43 of the Income Tax Act 1947.
Local or Resident Director Requirement
While the nation allows 100% ownership for foreigners, they are required to appoint local members to the board. Foreign companies in Singapore must have at least one Singaporean director and company secretary. This means two residents in your organisation.
There are a few requirements to satisfy this instruction. The locals must be 18 and over with a full legal capacity. Having Singaporeans on your team is helpful since they act as your middlemen between your company and the government.
The directorial position can come in three forms. You can choose between executive, non-executive, and nominee directorial positions.
Entreepass or Employment Pass
When incorporating your company in Singapore, a physical presence is necessary. To streamline the process, which typically takes about 2 days, clear communication is crucial. If you plan to handle the incorporation personally, you’ll need to consider two key documents: the EntrePass and the Employment Pass.
The EntrePass is designed for entrepreneurs looking to start and operate a business in Singapore. On the other hand, the Employment Pass is for employees holding managerial or executive roles. Remember, both passes require your company to be registered for at least 6 months before applying.
Registered Filing Agents
For foreigners residing outside the country or foreigners that cannot visit during the incorporation, there is another way to ensure the formation of your business. Filing agents are important partners to have during this process.
They are dedicated professionals who will ensure progress on your behalf. It is their responsibility to prepare and file documents to the registrar. However, there are a few mandatory requirements for this position.
The first important detail is that they should be a business entity registered with the ACRA. This could be under the incorporated company, registered business, or LLP.
Another requirement is that they should have attended the mandatory training programs. These are for anti-money laundry insights and countering the financing of terrorism.
Singapore Laws and Regulations
Adherence to laws is a must when working in Singapore. It ensures the smooth operation of your established business in the country.
Rules and regulations may depend on your nature of business. For businesses in the food and beverage industry, it is important to look into the Singapore Food Agency to learn specific instructions. This could be food shop and liquor licenses, MUIS halal certifications, and WSQ food hygiene courses.
To ensure compliance with these laws, it is important to partner with an expert. They can help you maintain the legality of your operations in the country.
Key Takeaway
Starting a business in Singapore as a foreigner is an opportunity to experience the many benefits of its generous system. It can be a strategy to tap into the region’s dynamic market and connectivity to other growing markets. Understanding these few details can help you get a general overview of what to expect in this venture.
Navigating the rigorous process of business formation can be overwhelming. However, with the help of experts, it can be a seamless transaction.
At Legatcy, our strong network of professionals can help your company establishment with ease. With a strong grasp of the legal framework, we offer peace of mind in your adherence to laws and regulations. Whether you are in your home country or living in Singapore, we are your trusted partners, meeting with you wherever you are in the world. In addition to that, we offer extensive corporate services. Our service catalogue can help you manage and support your start-up operations post-registration.
To learn more, don’t hesitate to reach out to us at Legatcy.
