Updated: Feb 9
We are well-known to be one of the world’s safest places to live, one of the least corrupt governments, and one of the strongest financial hubs in the world, with over 50 comprehensive Double Tax Avoidance Agreements, many free trade agreements, Investment Guarantee Agreements, strong enforcement of intellectual property laws, and plenty of support from the government.
It is thus understandable that you would want to choose Singapore, and we are very happy to welcome you to our wonderful island, and excited to know how you’ll grow here.
With the welcome out of the way, we would like to turn your attention to a more sombre matter.
There have been many other foreigners who have founded Singapore-based companies who have encountered various challenges when they wished to conduct their business. We wish to offer a bit of insight into how companies are founded in Singapore, so that you do not have a bad start like them, and have the best chances of succeeding.
ARE YOU ALLOWED TO RUN YOUR BUSINESS YOURSELF?
Firstly, understand that the process of starting a business is largely similar for locals and foreigners. However, as a foreigner, there are a few additional factors you need to consider before you start one.
There are several kinds of passes that the Singapore government issues to foreigners, and they do not give you equal ability to run a company. In this case, we will only discuss the Employee Pass and EntrePass.
By default, all pass holders including those with Employee Passes are allowed to incorporate and own shares in a company, but your company MUST have at least 1 local director. This means that by default, you may start a company, but will need to hire local authorized representatives to run it as well.
However, for the EntrePass, the difference between this pass and all the others is that as an EntrePass holder, you are allowed to own a business as a sole proprietor or part of a partnership whereas for the others, they require at least 1 local authorized representative at the director level.
The main difference between running a company versus a sole proprietor or partnership is that the former requires stricter adherence to rules, but will protect you from losing your personal assets, whereas the latter two are much easier to set up, run, and manage, but you risk people claiming your personal assets if a lawsuit were to occur.
RUNNING YOUR HOME-BASED BUSINESS
Speaking about personal assets, did you know that you might be able to run a business from your home in Singapore? Under the Home-Based Small Scale Business Scheme, as long as you adhere to the above pass requirements for business, you can run a home-based business.
There are a few guidelines that you need to adhere to as the property is fundamentally residential in nature, and they are as follows:
No employing any people outside of the household;
No displaying paid or physical advertisements (business signboards etc);
No introducing increased human or vehicle traffic to the site;
No introducing noise, smoke, smell, effluent or dust nuisances / danger to the surrounding residents;
No loading or unloading of goods by vans or trucks;
Activities of the home business must comply with the relevant rules and regulations (i.e. food and hygiene laws, fire safety requirements);
Addresses of HDB flats generally cannot be registered as a business address except if it falls into specific industries, under the Home Office Scheme. A different property needs to be designated as the business address otherwise, often through a firm offering virtual business addresses in Singapore.
OPEN A CORPORATE BANK ACCOUNT
And finally, our last tip for you is to open a corporate bank account so you can separate your personal and business expenses for accounting purposes. This will also allow your company to only have its liability limited to the company’s assets, and keep your personal assets clearly away from the conflict. (Click here to read more)
Do take note that in order for you to get an appointment to open a bank account, you will need to incorporate your company first.
If you would like to find out about how we can help you in terms of accounting, you can reach out to us at firstname.lastname@example.org for any questions or enquiries.
We wish you all the best, and may your business be prosperous!
Cloud Accounting & Consultancy