A Guide on How to Start a Business in Singapore for Foreigners
With its political and economic stability, Singapore is one of the most attractive nations for foreigners to open a business. Not to mention its prime location among neighboring countries, making it ideal for companies looking to expand their footprint in Asia. Its corporate tax incentives being capped at 17% is also one of the reasons many entrepreneurs and businesses open their doors in Singapore providing Singapore Entrepreneur Pass. It comes as no surprise that Singapore consistently ranks high as
There are three ways for foreigners to establish their presence and incorporate their business in Singapore:
One of the requirements is that the Company has to have a director who is locally resident. If you wish to open a business in Singapore but don’t want to relocate to run the operations, you will need to you must hire a local resident director who is a Singaporean Citizen, a Permanent Resident, or someone who holds a work pass to work in Singapore (the rules for work pass holders as directors are explained further below).
If you have difficulty finding local talents to run your business, you can engage a third-party service that can appoint the resident director for you. Read our
An Employment Pass is a work permit that allows you to work full-time in Singapore. To qualify for this pass, you need to pay yourself at least a $4,500 monthly salary and list your incorporated business as your place of employment.
Before you relocate and obtain your Employment Pass, it is recommended to partner with a third-party service to assist you in incorporating your business locally, including appointing a local resident director. Once your Employment Pass is approved and you relocate to Singapore, the directorship can be transferred. This is because the Employment Pass Holder can only act as a local director once their pass is issued.
Remember that the Employment Pass needs is issued for up to two years initially and up to three years afterwards. You will need to renew your employment pass to continue acting as the local director.
Unlike the Employment Pass route, incorporating your business through the EntrePass scheme means that your business doesn’t need to be incorporated first. You must first gain your EntrePass by meeting one of the seven criteria, such as having angel or venture-capitalist backing, having a good business and investing track record or having a research collaboration agreement with a local institution.
Moreover, you need to submit a ten-page business plan during your application. Once your application is approved, you are given an Approval-In-Principle Letter (AIP) that states you need to relocate to Singapore within six months. Afterward, you file your company registration and inject the required capital of $1 into your corporate bank account.
First-time EntrePass holders must renew their pass in the second year and every two years thereafter. There are certain renewal criteria that must be met; you will need to achieve spending that increases at least $100,000 each time of your renewal along with additional local employees at your company, as seen on the Ministry of Manpower table below:
NO. OF YEARS YOU HAVE HELD AN ENTREPASS
TOTAL BUSINESS SPENDING MUST BE AT LEAST
MUST EMPLOY AT LEAST
3 LQS** OR 1 PME***
6 LQS OR 2 PMEs
9 LQS OR 3 PMEs
8 or more
12 LQS OR 4 PMEs
**Local Qualifying Salary
***Professional, Manager or Executive
Having a presence in Singapore can benefit you, either the tax incentive or the economic and political stability it offers. We hope that the article above can guide you in choosing the right path in establishing your business here.
Have more questions? Read our
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