Have you been wondering how to start a business in Singapore as a foreigner? Is it even possible to start one even without being a Singaporean national? This quick guide is here to help walk you through that process while giving you some options in getting yourself physically here in Singapore to run the business you’ve always dreamed of.
If you’re planning on starting a business in Singapore as a foreigner, you are in luck! The country is known for its political and economic stability — making it one of the most attractive nations for foreigners to open a business. It has great tax advantages that other countries can’t match and business-positive laws that encourage growth and expansion.
If your business plans on expanding in other Asian-Pacific regions in the near future or create stronger business partnerships with other Asian companies, opening your business in Singapore first can give you a great head start. Singapore has lots of great business-positive laws and infrastructures that can help grow and mature your business so that it can develop a brand that customers, businesses, and investors can trust.
Another reason why Singapore is great for businesses is that its corporate tax incentives are capped at 17%. Because of this tax incentive, many foreign entrepreneurs and businesses open their doors in Singapore to take full advantage of that. It comes as no surprise that Singapore consistently ranks high as one of the most business-friendly nations globally.
How to Start a Business in Singapore as a Foreigner?
Having all the papers, funding, and structure are all necessary when starting a business — but you are going to need more than that as a foreigner if you want to open up a shop here in Singapore.
There are three ways for foreigners to start their business and incorporate in Singapore:
Appoint a resident director for your company
If you want to start a business without having to migrate to Singapore, you can appoint a resident director. Why is this important?
If you want to incorporate your business and operate, the government requires every company to have at least one resident director, either a local citizen, a permanent resident or someone with a suitable work visa. If you don’t you would be forced to have to come to the country via employment passes or entrepreneur passes.
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 comprehensive guide about company director in Singapore.
Related Guide: Lanturn’s Easy Guide: Incorporation for Locals in Singapore
Through Employment Pass
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 to be 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.
Through EntrePass (Entrepreneur Pass)
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|
|2||$100,000||3 LQS** OR 1 PME***|
|4||$200,000||6 LQS OR 2 PMEs|
|6||$300,000||9 LQS OR 3 PMEs|
|8 or more||$400,000||12 LQS OR 4 PMEs|
**Local Qualifying Salary
***Professional, Manager or Executive
You might also be interested in 3 main challenges of getting a Singapore Work Visa approved.
Starting a business in Singapore as a foreigner is not as hard as people think as long as you are aware of all of the following options and requirements. You can also always get the help of incorporation experts that can help set your business up here in Singapore like the ones we have here at Lanturn. From securing your incorporation paperworks to securing a professional resident director, our team is more than capable of helping you get your business up and running in no time.