Singapore is a great place to do business. It is corruption free, has a highly educated and skilled workforce and has low corporate taxes. Singapore is a cosmopolitan country and an extremely open economy. It is no wonder that many people in Singapore do choose to open companies or register as a sole proprietorship or partnership to start a business. Foreigners are also allowed to do business in Singapore with either of the above structures. If you are a foreigner and would like to do business in Singapore, here are your options.
1) Registering a Sole Proprietorship
Foreigners can apply for a sole proprietorship in Singapore. You must reside in Singapore and run the business. First, you will need to apply to the Ministry of Manpower (MOM) for an EntrePass. This pass allows a foreigner to work in Singapore. The application for an EntrePass can be done online through the MOM website. Once approved, an application to register a sole-proprietorship can be done online on BizFile using a SingPass. If you do not have a SingPass, you will need to engage the services of an ACRA (Accounting and Corporate Regulatory Authority) Registered Filing Agent. If at any point in time you decide to reside outside of Singapore, you will need to appoint an authorised representative who will be responsible for your business dealings.
2) Registering a Partnership
Similar to a sole proprietorship, you will need to apply to the MOM for an EntrePass to run your partnership in Singapore. You will not need to do so if one of your partners is ordinarily a resident in Singapore. If all the partners are foreigners and do not reside in Singapore, there needs to be an appointed representative. The application process is similar to registering a sole proprietorship.
3) Incorporating a Company
Unlike Sole Proprietorships and Partnerships, Companies are a little more tedious in terms of maintaining them. They have filing requirements to adhere to and these can be costly at times. However, there are certain advantages of incorporating a company especially when it comes to tax incentives and government-funded incentives. This is the reason why so many people prefer to incorporate one to do a business.
If you continue to reside outside of Singapore, you will need to appoint at least 1 locally resident director. If you wish to reside in Singapore to manage the company, you will need to apply to MOM for an EntrePass. The basic requirements for an EntrePass application to run a company includes
- The business must be legal
- The company is registered as a Private Limited Company
- The company is not registered for over 6 months at the time of application
- The foreigner must own at least 30% of the shares of the company
- The company must have a minimum paid up capital of at least SGD$50,000
When in doubt, look for an ACRA Registered Filing Agent.
If you own a foreign company and wish to have a presence in Singapore, you have 3 available options. A branch office, a subsidiary office or a representative office.
In conclusion, foreigners are welcomed to do business in Singapore. There are many pros and cons in each of the structures mentioned. Do understand the various business entities before setting up your business in Singapore. When in doubt, look for an experienced ACRA Registered Filing Agent for advice.
The editorial team at Singapore Secretary Services