Singapore has been recognised for many years as one of the most desirable places to run a business. The favourable tax system, modern infrastructure, and business-friendly environment attract capital and entrepreneurs from all over the world to start businesses in the financial hub of the Asia-Pacific region.
There are multiple opportunities for foreign entrepreneurs looking to start their businesses in the city-state, from acting as sole proprietors to owning a Singaporean company as a shareholder. Below, we explore how a foreigner can start a company and outline practical steps to register and ensure compliance for businesses in Singapore.
Key Takeways
- If you plan to carry out an activity for profit in Singapore on a continuous basis, you need to register a business entity.
- As a foreigner, you can register your business in Singapore as a sole proprietorship, partnership or private limited company (Pte Ltd). Other options include opening a branch, subsidiary, or representative office for your overseas business operation.
- If you want to serve as your company director as a foreigner, you need to be an ordinary resident in Singapore with an eligible immigration status.
- If your visa status does not allow you to run a business in Singapore, you can engage a registered filing agent to register a business entity on your behalf or act as your director or corporate secretary.
How Can a Foreigner Start a Business in Singapore?
If you plan to run a business in Singapore on a continuous basis, you need to register as a business entity with the Accounting and Corporate Regulatory Authority (ACRA). As a foreigner, you can register a business and be the sole proprietor or a shareholder. If you have a company and have a corresponding residence permit, you can serve as its director as well.
In Singapore, foreigners can register their business as a sole proprietorship, a partnership or a private limited company. If you already have a business in another jurisdiction, you can also consider opening a branch, a subsidiary or a representative office in Singapore.
When you open a new business entity, you need to enter the details about your operation on the website of the ACRA, along with information about your residence permit and other details. In most cases, business incorporation in Singapore can take 1-3 days (typically faster) to complete.
What Are the Eligibility Requirements for Foreigners to Start a Business in Singapore?
As a foreigner, you can start a business in Singapore even without residing in the city-state by turning to a registered filing agent, such as corporate lawyers or a consultancy, and appointing a local director. If you stay in Singapore, your eligibility to open a business or serve as its director depends on your residence status.
If you hold an Entrepreneur Pass (EntrePass), Tech.Pass or Overseas Networks and Expertise Pass (ONE Pass), you can both register your business in Singapore and work for it as a company director. Residents on Employment Pass working for another company can register their own businesses, but they need to receive prior approval from the Ministry of Manpower (MOM) to act as a company director or hire someone for this role.
You can also register a business in Singapore on a Dependant’s Pass and work for it after receiving consent from the Ministry of Manpower (MOM). However, if you reside on an S Pass or Work Permit, you cannot register a business or work for it as a company director and need to change your residence status first.
Checklist for Starting a Business in Singapore
Checking Your Eligibility
If you reside in Singapore as a foreigner and hold an eligible residence visa, you can register the business yourself. However, if you are a non-resident, you need to engage an authorised registered filing agent. You may want to change your residence status in Singapore to apply on your own or to act as a company director.
When you involve a filing agent, such as a corporate law practice or an accounting firm, they will register the business on your behalf. Typically, such an agent can offer other services you will need as a foreigner in Singapore, such as advisory services, provision of a corporate secretary, filing annual returns, and maintaining your records with the ACRA.
Selecting a Business Entity Type
When starting a business, you need to decide on the form of ownership for your company, which can be either a sole proprietorship, limited partnership, or a private limited company, which is the most common type of business entity in Singapore. If you already have a business in another jurisdiction, you may consider opening a branch office, a subsidiary, or a representative office.
Choosing a Registered Business Address
Every business in Singapore needs to have a local registered address to receive official correspondence. The registered address should be a real physical office address, which cannot be a P.O. Box, though it may be a co-working space.
If you run a small-scale business and want to use your residential address as your business address, you need to apply for approval under the Home Office Scheme before registering your business with the ACRA.
Appointing a Director and a Corporate Secretary
If you have a private limited company, you need to appoint a company director who will run the day-to-day business operations. You must appoint a company director before applying for company registration with the ACRA.
On top of that, within six months after registration, you will also need to appoint a company secretary who will take care of record keeping, filings, and corporate governance, including preparation of directors’ meetings. Both the company director and corporate secretary need to be Singaporean citizens or residents.
Choosing Your Business Name and Classification Code
When you register a company in Singapore as a foreigner, you need to pick a business name that does not belong to another organisation and is not banned for commercial use. You can check the availability of your preferred business name by entering it in the search bar on the governmental BizFile portal.
As a part of your registration process, you will also need to choose the type of business activity according to the Singapore Standard Industrial Classification (SSIC) code. You need to choose the code that is most relevant for your business activity, or consult your company formation agent, or the ACRA representative.
Registering with the ACRA
After completing the above steps, you can proceed with registering your business through the BizFile portal. You may want to consult the ACRA registration guide to complete all the required steps for your registration.
As you submit your information through the system and have your registration approved, you will receive a Unique Entity Number (UEN), which is your business identifier for all purposes, including business correspondence and invoicing.
Registering for GST
If you expect your turnover to exceed 1 million SGD per year, you will need to register for the Goods and Services Tax (GST), which is the Singaporean equivalent of VAT, currently set at 9%. You may want to register for GST even if your turnover does not exceed the 1 million SGD threshold to prepare for future growth and add the tax to your invoices so that companies can claim their GST credits.
Opening a Corporate Bank Account
When starting a business in Singapore, you will need a corporate bank account to invoice your clients and pay your contractors. You will need to provide your company’s incorporation certificate, the statutory documents, the ID information for the company director, copies of the proof of residence, and filled and signed forms to open a corporate bank account.
Obtaining Business Licenses if Required
Some business activities, such as food and beverage, retail, real estate, education, or financial services, require a business license to operate in Singapore. You can apply for a required business license through the governmental GoBusiness portal or seek support from your filing agent if they offer this service.
How IRB Law Helps Clients Start a Business in Singapore
IRB Law corporate lawyers offer end-to-end legal support to foreigners interested in business incorporation in Singapore as a sole proprietor, partnership, private limited company, or a subsidiary of a foreign business. Our team can advise you on the most effective structure for your business, help you prepare statutory documents for company registration, and act as your registered filing agent.
As a full-service law firm in Singapore, IRB Law can further assist you with obtaining necessary licenses and permits for your business operations. Additionally, we can help you apply to modify your residence status in Singapore if you need that to serve as your company’s director or for other purposes.
Summary
Many foreigners are interested in opening a company in Singapore for its ease of doing business. The city-state’s central geographical location as the hub of the APAC region, advanced digitisation, and infrastructure make starting a business in Singapore an attractive and sought-after option.
While you can apply to register your company in Singapore as a foreigner on your own through the ACRA system, you can always engage a registered filing agent to act on your behalf. Please don’t hesitate to reach out to the IRB Law corporate and commercial team for a free initial consultation on how we can help you with starting your business in Singapore as a foreigner.
FAQs
How can a foreigner start a business in Singapore?
As a foreigner, you can register a business in the city-state through the ACRA website if you hold an Employment Pass, Entrepreneur Pass (Entrepass), Tech.Pass, Overseas Networks and Expertise Pass (ONE Pass) or Dependant’s Pass (subject to MOM approval) as well as SingPass access.
If you don’t have one of these passes or SingPass access, you need to turn to a corporate filing agent, such as a corporate law practice or a consultancy, to register a business on your behalf.
Can a foreigner act as a local director for their own company in Singapore?
You need to be a resident of Singapore and hold an Entrepass, Tech.Pass, or One Pass, to act as a company director for your business. If you hold the Employment Pass, you can only act as your company director if you have prior approval from the MOM. If you do not reside in Singapore or don’t hold one of these passes, you need to hire a Singaporean citizen, permanent resident or a qualifying pass holder to act as a company director for your business.
How long does it take to register a company in Singapore for a foreigner?
Typically, if you have all the required documents to submit an application through the BizFile+ system on the ACRA website and there are no additional approval requirements, you can expect your registration to be complete within 1-3 business days (often faster) in most cases.
