By Betty Ashman, Finder Blogger: The Business Pro, and founder of www.bettyashman.com
Looking to set up shop in Singapore?
Singapore has been ranked the world’s “easiest city to do business” by the World Bank in 2015 and continues to be, with the most “business-friendly regulation.” Now that you’re and feeling the entrepreneurial urge to start up a business on either an Employment or a Dependent Pass, you might be wondering how to go about it.
Letter of Consent
If you are on an dependent pass (DP) you can get a Letter of Consent to work and set up a business. Working Pass holders can apply for SingPass, an online account needed to register a company with the Accounting and Corporate Regulatory Authority (ACRA) via their online registry, Bizfile. Dependent’s Pass holders can also apply setting up sole proprietor or partnership but will need an agency to handle the application.
For whichever type of company you set up, Dependent Passholders must write a Letter of Consent to the Ministry of Manpower (MOM) to allow yourself to work under your company’s name.
Sole Proprietorship (SP)
A sole proprietorship is the simplest form of a business – you are the sole owner, making it easy to control management and accounts. However, you are liable for all debts, profits are taxed at personal income level, and there are no tax incentives available. A SP can be wholly owned by a foreigner, but a foreigner with no Dependent Pass or Entrepass needs to contact MOM aforehand.
Limited Liability Partnership
A limited liability partnership requires at least two individuals as partners. The LLP is its own entity, liability is limited and accounting is simpler, but also lacks the tax incentives and exemptions Pte Ltds enjoy. At least one of the partners to be ordinarily resident in Singapore, considered here to be Singaporean citizens, PRs or a special passholder.
Private Limited Company
A private limited company limits liability and is taxed at entity level with incentives and exemptions – but requires significantly more maintenance and accounting to comply with the strict regulations. At least one director must be ordinarily resident in Singapore, including those with an Employment Pass or Dependent’s Pass. Several expatriate-started Pte Ltds opt to have a Singaporean nominated director in order to expedite business administration. The registered Company Secretary must be a Singapore resident.
Though it seems tempting to run your business transactions through your personal account, you should have a separate account for formal book-keeping and reporting at the end of the financial year.
Private Limited Company with the Entrepass
The Entrepass allows foreign entrepreneurs to reside in, start and operate a new business in Singapore. The stringent requirements of a $50,000 paid-up capital – specifically meant for companies with registered intellectual property, venture capital or business angel funding, or be academically and governmentally supported – is not mandatory anymore since 2017, with other aspects such as relevance of industry being considered.
Overall, do note that the government and Ministry of Manpower will naturally favour companies and ideas that are willing to employ local manpower and contribute to the local economy. Presenting your ideas in this way may help you along the red tape, and embracing local talent may potentially gain you grants that are otherwise inaccessible.
Your successes and the process may vary from person to person depending on your skills, ideas, and visas – the above information are just guidelines on what to expect and options available, and may not accurately reflect your experience.
For more detailed advice on specifically building your business idea and a better future for yourself and your family, pick up a copy of my mumtrepreneurial book, Make It Happen, at bettyashman.com or Kinokuniya. Look for it as the National Library
About Betty Ashman
Betty has many roles: mother, business manager and entrepreneur (she runs The Expat Fairs) as well as author of a new book, Make It Happen: 7 Steps to Thrive for Womenpreneurs. Look out for her tips on nurturing or starting a small business in Singapore and succeeding at work.