Starting a Business Set-up in Singapore as a Foreigner
Any business-oriented person must evaluate several factors before setting up a given business. Many countries offer business opportunities to investors despite their location. This article features Singapore, one of the world’s best countries that even a foreigner can set up a business. However, there are given guidelines that must be followed to succeed. Let’s learn more on how foreigners can start a business in Singapore.
Forms of Business Ideas for Foreigners
As a foreigner in Singapore, you must clearly define the type of business you want to venture into. In Singapore, the law approves business structures such as company, Proprietorship, and partnership. Every business structure has pros, challenges, and requirements for foreigners, as explained below.
When related to other business structures, the company form of business is a bit complex. Yes, you will spend more time and resources, but you will enjoy the benefit of limited liability. You must know that a company stands on its own, meaning that the shareholders aren’t liable for any company’s legal action or debts.
For a company to be effective, there is a requirement like Holding AGM’s (Annual General Meetings) and Filling of annual returns. It is also quite a process and time-consuming when deregistering the company compared to other forms of business. Below are ways in which foreigners can incorporate companies in Singapore:
- Foreign companies desiring to set up in Singapore
- Foreigners who wish to set up a company in Singapore
However, for online operations, a foreigner can use a BizFile+ account to incorporate a company online. However, they must have a SingPass account to set up the company.
Note: Any company set up in Singapore must have one director who resides in Singapore. So, if a foreigner doesn’t live in Singapore, he/she must appoint someone like the director of the company.
Should a foreigner want to come to Singapore and control the business operations, they can search for an employment pass found in the Ministry of Manpower. Nonetheless, there are several requirements for the employment pass to go through. One of the requirements is a minimum of $50,000 in-paid capital from the company.
This is a form of business formed and controlled by one person known as the sole proprietor. It is the simplest form of business as it requires fewer fulfillments to open the business. Above all, it is the cheapest form of business. Although the sole proprietor enjoys all the business profits, they are liable for any legal action taken against the firm and all the debts incurred, which is not the same case for companies.
To start up a sole proprietorship business in Singapore, the owner must have a SingPass and fill everything online through the BizFile+ portal. If you lack the SingPass and don’t know how to go about it, reach out to a corporate services firm for more directions. They can even fill the form on your behalf.
The best aspect of sole Proprietorship is that a foreigner doesn’t have to be in Singapore physically when forming the business. But then, the business owner must appoint a business representative who lives in Singapore. The purpose of the business representative is to get notices concerning the business in Singapore.
Note: A sales rep can be permanent residents, Singapore citizens, and EntrePass holders.
A business partnership is a business owned by at least two and a maximum 0f 20 business people. Like sole Proprietorship, it easy to form a partnership business, and there are fewer compliance requirements.
The partners in a partnership business are responsible for any legal action taken against the business and any debts. This implies that partners must collaborate and work under honesty virtues.
The registration process is the same as in the case of Sole Proprietorship. The partnership business can be registered in Singapore without necessarily requiring any of the partners to be physically in Singapore.
Do you wish to know if you qualify for an Employment Pass? It is quite simple; check with the MOM tool. From the tool, you will see whether you are eligible for an employment pass or not.
Foreign Companies Hoping to Operate in Singapore
If a foreign company desires to operate in Singapore, it can start as a subsidiary, a branch office, a re-domiciliation, and a representative office.
There are several factors to consider since each option has its advantages and downfalls. So, ensure you study each option profoundly and go for the one suitable for you.
What about Foreigners with Passes in Singapore? Can they start a business while in Singapore?
Although a foreigner can start a business freely in Singapore, those foreigners with a given pass may be restricted from creating a firm depending on the pass’s terms and conditions.
This implies that many pass holders aren’t assured of managing businesses in Singapore, mostly sole Proprietorship and partnership. However, the good news is that they can have shares in a Singapore company as long as they aren’t listed as directors of the company.
The above factor does not apply to residents who have a dependent pass or long-term visit pass. They can reach out to MOM and get permission to set up the business in Singapore. But they must do the following:
- List a person, either a permanent resident or a Singapore citizen, as the company’s director.
- Find a Singapore company to apply for them a consent letter from MOM, permitting them to work for the company
Those who hold an EntrePass have fewer hassles starting a business in Singapore. The purpose of EntrePass is to permit foreigners to set-up their business in Singapore. With the EntrePass, you can set up any business structure appropriate to you with a transparent legal system. Above all, EntrePass also allows foreigners to bring their children and spouses to Singapore through a dependent pass application.
Singapore is among the countries in the world that encourage foreign investment. If you have a dream of setting up a business in Singapore, then go for it. Whether you want a sole proprietorship form of business, whether you prefer partnerships, or if you love the company, then you are on the right track. Ensure you get the finer details of all the requirements and follow the procedure adequately.