If you’re wondering how to kickstart your journey in being an entrepreneur in Singapore, look no further! This guide will take you through some of the most important steps you will need to know on how to start a business in Singapore.
Being an entrepreneur, starting up a business and being your own boss is becoming increasingly popular not just among adults, but amongst millennials as well. Especially in Singapore today, starting your own business is the dream of many millennials. According to todayonline 2016, GoDaddy revealed that nearly three-quarters of the millennial population surveyed in Singapore plan to be entrepreneurs within the next 10 years.
Known as a major financial hub worldwide, Singapore has a highly developed economy that is both market and trade based. It is one of the world’s most prosperous nations, with a business-friendly regulatory system and low unemployment rates. Despite its small domestic market and a lack of natural resources, the Singapore economy is one of the most stable in the world, with no foreign debt, high government revenue and a consistently positive surplus.
The Singapore economy is on a healthy growth path despite being hit by the recent Covid-19 pandemic – it was and is still ranked the third wealthiest nation in the world in terms of the GDP (PPP) rankings by the International Monetary Fund (IMF).
So, if you’re looking for a place to set up or expand your business, there’s no other country that is more suitable than Singapore. Let’s find out what are the essential steps you should take to figure out how to start a business in Singapore.
1. Ask yourself why
It goes without saying that how to start a business in Singapore requires a lot of work. The amount of documentation, legal requirements, and strategic development can simply be overwhelming and without putting in a substantial amount of effort, you’ll struggle to turn your idea into a successful business.
So even before you start, ask yourself why you are doing this. Why do you want to start a business? Is it because of money or the flexibility and autonomy gained? Perhaps you are sick of the rigid model of the hierarchy in a typical workplace and want to become your own boss?
Also, think about your strengths and weaknesses – what skills are you able to bring to the table and how will it help your business? What industries are you looking to venture into and how much capital are you willing to risk for the business? If you’re not very skilled but really want to explore that industry, should you consider taking courses to upgrade yourself first?
2. Conduct market research
Conducting research is a crucial step if you’re an expat thinking of starting a business here in Singapore and are not familiar with the market. This will also be especially helpful if you have not yet figured out exactly which direction your business will be heading towards, who your target audience should be or which types of products/services you should go for yet. You should also take note of the amount of time, capital and energy required to start a business in Singapore.
Your research should include the most relevant information regarding the industry you’re interested in. Try to understand consumer behaviour and who your competitors are. After that, evaluate whether this industry or specific product/service that you’ve chosen is a good choice or if it’s in demand. This process will help you address your opportunity, value proposition, market size, and competitors.
There are several ways to do this:
- Performing general Google searches
- Speaking to people already working in your target industry
- Reading books by people who have succeeded in your industry
- Researching key people
- Following relevant new sites and industry magazines
- Taking suitable courses to equip yourself with essential skills needed
3. Have a business plan
A business plan is essentially a roadmap in its simplest term. A business plan is more than just a piece of document. It’s a guide that helps you outline and achieve your goals. It’s also a management tool that allows you to define your strategy, tactics and specific activities for execution including key milestones, deadlines, budget and cash flow.
It allows you to analyse results, make strategic decisions, and showcase how your business will operate, and grow. In short, if you’re thinking of starting a business, having a plan can improve your chances of success.
Now, writing a business plan doesn’t have to be complicated and time-consuming. While there are numerous free business plans template online for you to download and use, a standard business plan should consist of the following:
- an executive summary
- your target audience
- the types of products or services you are offering
- a marketing plan that provides information on how you are going to reach your audiences (tactics and strategies)
- financial plan that forecasts sales and profits
Do not forget to include product images or additional information in the appendix section as it may help both you and your potential investors to understand the business better.
4. Decide on a business structure
Similarly, it is recommended that you do your research before choosing a business structure as each structure has its own set of laws, taxes, fees, and requirements to follow.
In Singapore, there are 4 main types of business structures to choose from. They are Sole-Proprietorship (one owner) or Partnership (two or more owners), Limited Partnership (LP), Limited Liability Partnership (LLP) and Company. There are 7 types of companies that can be incorporated in Singapore. You will need to specify the correct company type when you submit your company name application.
For more information on each type of business structure, click here.
For other general information on the business structures and how to decide on one, click here.
5. Register your business
At this step, you should already have a clear idea of the industry your business is in, who your target audience is, the types of products and/or services you are going to offer, and a business plan. Registering your business will be the first step in making your dreams a reality. You can easily register your business, including foreign branch offices, online at Bizfile.
You may approach these government agencies if you already have an existing foreign business and wish to set up a representative office in Singapore, or if you want to have a representative office as a temporary arrangement for conducting market testing and/or research activities:
- Banking, finance and insurance – Monetary Authority of Singapore
- Legal – Legal Services Regulatory Authority
- All other industries – Enterprise Singapore
6. Choose a location
Even though Singapore is a small city, location still plays a very crucial role in the success of your business. If you decide that your business will be online, then you’ll probably need to look at building your website and spending more time on designing the interface for user experience. Most often, online business owners may be able to work out of a home office or a co-working space instead of renting or buying office space to save cost.
But if your business requires a dedicated brick and mortar location, you don’t have to worry so much too. Singapore provides a wide choice of premises for businesses. Whether you want your business to be situated in the heart of the civic district or in a suburban estate, businesses are assured of premium facilities and infrastructure.
Consider factors such as the price and visibility of the physical store, whether it is easily accessible by public transport or has plenty of parking spaces and whether there are any competitors nearby your intended location. You might also want to think about the layout and design of the store to attract customers.
To view a list of business parks, specialised industrial parks, ready-built and office spaces for purchase or rent, click here.
7. Understand the Singapore Taxation System
As the main tax administrator for the Ministry of Finance, the Inland Revenue Authority of Singapore (IRAS) plays a crucial role in tax policy formulation, developments in the external economic and tax environment to identify areas for policy review and changes as well as representing the government in tax treaty negotiations, providing advice on property valuation and drafting of tax legislation. All taxes go towards the funding of government expenditure.
8. Apply for a Singapore visa
Whether you are an individual foreign entrepreneur or investor, you can apply for the EntrePass, or Singapore Permanent Residence (PR) under the Global Investor Programme if you are interested in setting up a long-term base in Singapore.
The EntrePass is designed to facilitate the entry and stay of entrepreneurs who intend to start and operate a new business in Singapore. Successful applicants will be awarded a one-year pass.
For more information on the EntrePass, click here.
- Global Investor Programme (GIP)
The GlP accords PR status to investors with a substantial business track record who intend to drive the growth of their investments from Singapore. To qualify for the GIP, the applicant must either:
- Invest at least $2.5 million in a new business entity or in the expansion of an existing business operation in Singapore, or
- Contribute at least $2.5 million in a GIP fund that invests in Singapore-based companies, or
- Invest at least $2.5 million in a new or existing Singapore-based single family office having Assets-Under-Management (AUM*) of at least $200 million.
For more information on the GIP, click here.
All in all, starting a business is not impossible. It’s just going to take some time, effort, and potentially a few setbacks, but you can do it. Follow the steps above and you might just be the next successful entrepreneur in Singapore!