Why Start a Business in Singapore?

Singapore is known globally for being one of the most business-friendly countries in the world. Entrepreneurs from around the globe are drawn to this Southeast Asian hub due to its strategic location, pro-business policies, world-class infrastructure, and strong legal framework. If you’re wondering why and how to start a business in Singapore, you’ve come to the right place. Read on to know more.

Benefits of Starting a Business in Singapore

Looking for answers to why start a business in Singapore? Consider the following advantages.

• Low Corporate Taxes: Singapore offers one of the lowest corporate tax rates in the world, currently capped at 17%, with further exemptions available for new startups. As announced in Budget 2025, to provide support for companies’ cash flow needs, a CIT Rebate of 50% of the corporate tax payable will be granted to all taxpaying companies, whether tax resident or not, for YA 2025. Active companies that have employed at least one local employee in 2024 will receive a minimum benefit of $2,000 in the form of a CIT Rebate Cash Grant.
• Ease of Doing Business: Singapore is ranked consistently among the top countries for ease of doing business, and incorporating a business in Singapore is straightforward and digital. The entire process of company incorporation can be completed online within a few days with the help of company incorporation services like Lanturn.
• Global Trade Access: Its strategic location makes it a gateway to major Asian markets. Singapore also maintains strong free trade agreements with countries worldwide, facilitating efficient import and export operations and cross-border transactions.
• Skilled Workforce and Innovation Hub: With a highly educated workforce and robust IP protection laws, Singapore attracts business tycoons with innovation and R&D. Government incentives encourage startups to invest in tech, sustainability, and digital transformation.
• Strong Government Support: Government grants and funding programs such as the Productivity Solutions Grant (PSG), Startup SG Tech, Startup Tax Exemption Scheme, and the Market Readiness Assistance (MRA) Scheme help entrepreneurs at various stages of growth.

Success Stories of SMEs and Startups in SG

From fintech companies like Nium to deep tech startups like Trax to NinjaVan, a logistics company, many Singaporean startups have scaled into international success stories. These companies started small but tapped into Singapore’s supportive ecosystem, including corporate services and accounting services, funding opportunities, tax-friendly laws, and access to regional markets. Their stories showcase that starting a new business in Singapore offers serious growth potential.

What You Need to Know Before Starting a Business in Singapore

How to start a business in Singapore is a common question most potential founders and business people have. Here we give you a 101 on the same.

Choosing the Right Business Structure

To start a business in Singapore, choosing the proper legal structure is crucial. Here are the main options:

• Private Limited Company (Pte Ltd): The most popular choice due to its limited liability, separate legal entity status, scalability, and ability to raise capital. Investors and government agencies also prefer it.
• Sole Proprietorship: A simple structure for solo entrepreneurs or solo venturers, but it offers no legal separation between the business and the owner. The owner is personally liable for all debts and legal actions.
• Limited Liability Partnership (LLP): Suitable for professional services or joint ventures. It provides a mix of flexibility in management and limited liability protection for partners.

Selecting the correct business structure impacts everything – from your liability to legal impositions, to your ability to grow, secure funding, and even attract clients.

Minimum Capital and Funding Options

If you’re wondering how much capital is required to start a business in Singapore, note that the minimum paid-up capital for a private limited company is SGD 1. However, the realistic capital needed depends on your business type, scale, vision, and regulatory requirements.

Funding options include:

• Self-funding or Bootstrapping: Common for service-based startups with low initial costs.
• Angel Investors and Venture Capital: Available especially for tech startups and scalable ventures.
• Government Grants and Schemes: Options such as the Enterprise Development Grant (EDG), Startup SG Founder, and SkillsFuture Enterprise Credit provide non-dilutive support.
• Bank Loans and Alternative Lending: SME loans from local banks and fintech lenders are accessible with a solid business plan and proper documentation.

Starting a Business in Singapore as a Foreigner

Starting a business in Singapore as a foreigner is fully permitted and even encouraged. Foreigners can own 100% of the shares in a Singaporean company, without needing to partner with a local. However, there are a few legal and practical requirements:

• At least one director must be a Singapore resident (citizen, PR, or EntrePass/Employment Pass holder).
• If the foreign owner wishes to relocate and run the company, they must apply for an Employment Pass or EntrePass.
• Utilizing professional corporate services providers, such as Lanturn, can help streamline the incorporation, compliance, legal adherence, and work permit applications process.

A Step-by-Step Process to Start Your Small Business in Singapore

For business tycoons who are curious about how to start a small business in Singapore, here’s a simplified overview of the key steps involved:

Business Name Reservation & ACRA Registration

• Firstly, choose a unique name that is not identical to an existing entity. You can check name availability through ACRA’s BizFile portal.
• Once approved, proceed to register your company with ACRA. This step involves submitting key details, including shareholders, directors, business activities (via SSIC codes), and the registered address.
• Most companies register as Private Limited (Pte Ltd) companies for limited liability and professionalism.

Setting Up a Registered Business Address

• A local Singapore address is mandatory for registration. It must be a physical address – not a P.O. Box.
• If you don’t have office space yet, many corporate services offer virtual office solutions that comply with ACRA requirements.

Appointing Directors and Company Secretary

• You must appoint at least one resident director.
• A qualified Company Secretary must be appointed within six months of incorporation. The secretary ensures regulatory and legal compliance and handles official filings with ACRA.

Opening a Business Bank Account in Singapore

• Prepare your incorporation documents, including the company’s Constitution, ACRA BizFile, and resolution to open an account.
• Choose from leading local banks, such as DBS, UOB, and OCBC, or international banks like HSBC and Standard Chartered.

Local Banks vs International Accounts

• Local banks offer competitive business account packages, digital banking tools, and faster local transactions.
• International banks may be better suited for businesses dealing with overseas clients or currencies.
• Consider Lanturn’s Corporate Services to assist with account setup, particularly for foreign business owners.

Legal, Tax & Compliance Requirements

GST Registration and Filing

• Companies with a projected annual turnover exceeding SGD 1 million are required to register for Goods and Services Tax (GST).
• Voluntary GST registration is available for businesses looking to claim input tax credits.
• After registration, you are required to file GST returns quarterly.

CPD & Employment Pass for Foreign Owners

• If you’re a foreign national looking to relocate and manage your business, applying for an Employment Pass or EntrePass is a necessary step.
• An EP requires a fixed monthly salary of at least SGD 5,600 (SGD 6,200 for financial services) and relevant qualifications. This requirement increases progressively with age.
• Corporate service providers like Lanturn can assist with employment pass applications, annual Continuing Professional Development (CPD) requirements, and ongoing immigration compliance.

Ongoing Compliance: Annual Returns & Tax Filing

• Companies (non-listed) must file annual returns with ACRA within seven months of the financial year-end (five months in case of listed companies).
• File corporate income tax with IRAS annually. Singapore uses a one-tier corporate tax system.
• Maintain financial statements, registers, and statutory records in compliance with the Companies Act.
• Appoint an auditor, unless exempted.

Post-Incorporation Checklist

Corporate Governance and Record-Keeping

• Develop internal policies and board resolutions to ensure effective corporate governance and statutory record-keeping.
• Maintain proper accounting records, shareholder registers, and meeting minutes.
• Consider adopting a cloud-based accounting platform for easy access and tracking.

Launching Your Business: Branding, Marketing, and Sales

• Develop a strong brand identity with a logo, tagline, and website.
• Leverage SEO, social media marketing, and local advertising to build brand visibility.
• Utilize CRM systems and e-commerce platforms to manage sales and customer engagement effectively.

Scaling Up: Hiring, Funding Rounds, and Investor Pitching

• As your business expands, you may need to recruit local talent. Utilize platforms like MyCareersFuture.sg, LinkedIn, or recruitment agencies to find suitable candidates.
• Seek additional funding through VC rounds or angel investors.
• Prepare detailed investor decks, business forecasts, and demonstrate compliance to attract interest.
• Professional support from corporate services and fund services, such as Lanturn, can help maintain your structure as your business scales and acquire the required investment with ease.