It’s always exciting to start a business from scratch, more so if it’s your very first. It’s fun to dream about making it big or having several outlet stores with your name on them, but the first step towards becoming the next Jack Ma is to set your business up correctly.
Conversely, cutting corners or taking shortcuts in setting up your business might get you there faster, but get you into trouble later on.
That’s why we’ve come up with this Ultimate Guide to Starting a Business in Singapore, where you’ll find all of our resources for helping entrepreneurs like you to get started the right way. You may go through each section in turn or click on a header in our Table of Contents to focus on a particular topic right away.
8 Steps To Starting Your Business in Singapore
Table of Contents
Coming Up With A Business Concept
When you start a business, you start by thinking of what you will be doing for your future customers: are you offering a product, or providing a service? If you’ll be offering a product, consider whether you will be designing and manufacturing it yourself, or whether you’ll be more into retail or distribution.
Either way, consider how your product or service will meet the needs of your customers, or make life better for them.
That means getting to know your customers well enough to know whether they would be willing and able to buy from you, and how they would be likely to go about their purchase. Who are they? Where do they live? What do they do for a living or for fun? And will there be enough of them to keep your business running for the long term?
Another consideration would be whether you yourself have sufficient knowledge or expertise in that particular industry, and if not, whether you’ll have to study or have recourse to someone with the know-how you need.
You’ll also have to figure out how you’re going to set yourself apart from your competitors. Will you be offering something of higher quality or at a lower price?
But probably the most important consideration of all is to ask yourself whether you are fully committed to nurturing this business, and if not, whether you’re prepared to entrust management of it to others (such as a partner or staff).
Take note that even if you just begin a business as a sort of sideline or secondary source of income, it’s going to need more of your time and attention as it continues to grow. Also, depending on the nature of your business, there are bound to be some aspects of it that will need you to be more hands on.
Choosing A Business Name
Once you’ve decided what kind of business you want to start, you’ll need to put some careful thought into what you’re going to call it. After all, you wouldn’t give your newborn baby some random name, would you?
Besides, there are certain regulations when it comes to naming your business in Singapore, which you can find in our 5 Key Areas You Must Get Right when starting a business.
In addition to the regulations you’ll read about above, other considerations for naming your business include not using a name that is religious, or one that is prohibited by the Minister of Finance (e.g. Temasek).
You might be allowed to use the name of a business that has closed down, but only after a certain period of time has elapsed. Depending on the nature of the business whose name you want to use, that period could be anywhere between three months to six years.
When checking whether the name you have in mind sounds too close to the name of an existing business (which is not allowed), try different variations when you run your name through online name checkers.
To be on the safe side, try thinking of a different name even if the online checker says your name is safe, but you’ve seen that there are similar names that have come up in the search results. That way you can be sure that the business that owns that similar name won’t sue you someday for trying to copy or impersonate them.
After having put so much effort into coming up with a good name, you might want to trademark it to make sure that no one else can ever use it. This is an especially good idea if you’ve got major, long-term growth plans for your business.
Choosing A Business Structure
Now that you have a business name, you’ll want to figure out whether you’re going to add something like “Ltd” or “Pte Ltd” after it—which means choosing a business structure. To help you choose, you can find detailed descriptions of the different business structures in Singapore on our Incorporation page.
Some factors to consider when choosing a business structure include whether you plan on running the business by yourself, or, if you’re going into business with one or more partners, how many partners you’re going to have. You might also want to consider how your personal assets will be protected no matter what happens to the business.
If you are going into business with a partner, think about how much control over the business you’re going to allow your partner to have. You must also think about how much capital you and your partners are going to invest, and whether you’ll have to look to outside sources to fund your business.
If you’re not sure about which business structure to choose, don’t worry—you can change business structures down the line as your business continues to grow. Many businesses that start out as a single proprietorship, for instance, become incorporated companies later on.
Once you’ve chosen your business structure, make sure that you’re at least 18 years old, and that you or at least one of your partners live in Singapore as a resident. You also have to make sure that your Medisave and those of your partners are all paid up.
Having chosen your business structure, you can now move on to registering your business. With a few exceptions (such as licensed hawkers, home-based craftsmen or farmers), all business structures must register with the Accounting and Corporate Regulatory Authority or ACRA.
One exemption is if you’ve chosen the sole proprietorship business structure, and you decide to run the business using your own name alone, you don’t have to register your business. When we say “your own name”, we mean the name you have on your NRIC or passport.
You must register with ACRA, however, if you add descriptive words or a phrase after your name in naming your business. Also, if your business has more than 20 owners, you’ll also have to register your business as a company.
Registering your business is a pretty straightforward process in Singapore. Just pay SGD115 for one-year registration or SGD175 to register for three years.
Take note that you have to renew your business registration before it expires, because it’s an offence to continue your business operations with an expired registration. Renewal costs SGD30 for one year, or SGD90 for three years.
Also take note that if you change anything in your business registration, such as the business particulars, the owners, or the owners’ particulars, you have 14 days after the changes take place to let ACRA know of these changes. Notifying ACRA of these changes is free of charge.
Now, if you own a business overseas and would like to set up a representative office in Singapore, get in touch with Enterprise Singapore. Foreign financial, banking or insurance businesses, in particular should go to the Monetary Authority of Singapore, while overseas legal companies must contact the Legal Services Regulatory Authority.
Choosing An Accountant
As easy as registration is, however, getting your new business up and running doesn’t stop there. Discover the 3 Most Common Accounting Challenges That All Business Owners in Singapore Face, and you’ll see that registration is just the tip of the iceberg, and that you would do well to get some professional help.
There’s record-keeping, taxes, complying with the Inland Revenue Authority of Singapore or IRAS, and making sure that you’re making optimal use of the capital you’ve invested with an eye towards continuing growth.
That’s quite a responsibility to add to your already lengthy list of duties as a business owner, and not something that is easily relegated to your free time or delegated to just anybody. Learn How to Choose A Good Accountant and see why this is one of the most important choices you’ll ever make for your business.
In engaging the services of a good accountant, you’re assured that you (and your partners) don’t have to go it alone when running your business, and that you have all the support you need to keep it in the green.
Choosing A Bank
Naturally, keeping your business in the green means keeping your funds in the bank, and with more than 200 banks in Singapore, it can be tough to choose which ones to entrust with your funds.
We say “ones” because business experts say that while keeping your funds in just one bank can greatly simplify things for you, there are many practical reasons for keeping your business resources in more than one bank. You could benefit from better interest rates, for instance, or be better able to set aside funds for payroll and taxes.
Other reasons for maintaining your business’ accounts at multiple banks include security—to make it difficult for hackers to access all of your accounts—and convenience, such as keeping separate accounts for receivables and payments.
Also, if you’re running a sole proprietorship, it’ll be easier for you to keep your personal and business funds separate.
Take a quick look at 6 Banks to Consider for Your Business Account in Singapore which covers our most popular local and international banks. Take careful note of the differences between them and see how their services stack up not just against each other, but against the particular needs of your own business.
Setting Up Your Cloud Accounting
Just as you may ask your accountant for advice in opening your business bank accounts, so may you also ask for assistance in setting up your cloud accounting. If you’re not familiar with cloud accounting, get explanations along with 20 Ways Cloud Accounting Can Help Make Things Easier For Your Singapore Business.
Indeed, in today’s business environment, it’s almost unthinkable for businesses to not have some form of cloud accounting, with digital technology and interconnectivity pervading almost every aspect of business operations.
Where some business owners with long-running enterprises have yet to adopt cloud accounting now find themselves having to keep up with the times, you as a new business owner have the advantage of getting into cloud accounting from the start.
You can get a bird’s-eye view of four of the most popular accounting software brands in Singapore in How to Choose the Right Accounting Software for Your Business. It’s also an advantage for you if you and your accountant use the same software, as it will make it a lot easier for both of you to manage your finances together.
Setting Up Your Payroll
Finally, once you have your cloud accounting in place, you can set the stage for efficient payroll processing. While this may not be as pressing a concern for sole proprietorships or for businesses with smaller teams behind them, how you’re going to manage your payroll is best figured out at the beginning.
This is particularly so if you foresee the growth of your staff alongside your business expansion. It would be arguably better to iron out your payroll needs as early as now and make incremental adjustments as needed, instead of having to overhaul your entire payroll process as your business becomes bigger.
Fortunately, payroll processing is one more aspect of running your business that a good accountant will be able to help you out with—indeed, it’s possible to outsource all of your payroll management duties to your accounting services provider. Find Out Why Outsourcing is the Way to Roll when it comes to your business’ payroll.
You’ll see that there’s so much more to payroll preparation than just handing out everyone’s cheques or depositing them into their accounts. Also bear in mind that the Government has laws in place for making sure that your staff’s salaries are calculated correctly and paid on time.
Now, you’re all set!
But if you feel that you still need guidance in any or all of these stages of starting a business in Singapore, know that a friendly helping hand is just a click or a call away at U Ventures.
As your fellow entrepreneurs, we know what it’s like to start your own business. And as experienced experts in incorporation, accounting, taxation and corporate secretarial services, we’ll be able to advise you every step of the way. Get in touch with us today and let’s get started!
U Ventures Pte. Ltd. - Accounting Firm in Singapore
Address: 6001 Beach Road, #22-01 Golden Mile Tower, Singapore 199589
Phone: +65 6735 8135