Why is Singapore one of the best places to set up your business?
Singapore ranks as the world’s top-most competitive economy amongst 63 economies in a report by Switzerland-based research group IMD World Competitiveness Centre. The accolade was given for its advanced technological infrastructure, the availability of skilled labour, favourable immigration laws and efficient ways to set up new businesses.
In the World Bank Doing Business Ranking 2019 report, Singapore also ranked as the 2nd easiest place to do business amongst 190 economies. Singapore’s strategic location provides easy access to most of Southeast Asia’s major commercial hubs, acting as a nexus point for trade, communications and finance. The stable legal, regulatory, political and financial environment create a sound foundation for companies to use Singapore as a base of business operations for the region, inspiring investor confidence which in turn ensures a steady source of investor funding for growth and expansion.
What are the major industries in Singapore?
According to the Economic Development Board of Singapore, there are more than 37,000 international companies that have based their operations out of Singapore, including around 7,000 multinational corporations, with more than half of those running their Asia-Pacific operations from the city state. At the same time, start-ups and small and medium enterprises (SMEs) also blossom in a vibrant entrepreneurial climate where public and private sector support for new ideas and creativity are available.
In a recently released Department of Statistic’s GPD Report, Singapore’s growth in 2018 was contributed to by the following major industries (in descending order): manufacturing (21.4%), wholesale and trade (18%), business services (14.9%), finance & insurance (12.95%) and other service industries (11.5%).
What types of business entities are available in Singapore?
- Sole Proprietorship
- Company (Private or Public)
- Limited Partnership
- Limited Liability Partnership
What do you need to know about company incorporation in Singapore?
In a nutshell:
- Companies are registered under the Companies Act (Cap 50). The most common form is the Private Limited Company or “Pte Ltd” company. It’s a separate legal entity from the members and the liabilities of the owners are limited to the assets in the company.
- The minimum paid-up capital required for a company is S$1.00.
- A minimum of one shareholder is required and this can be an individual or corporate shareholder. Nominee shareholders are permitted.
- A minimum of one director (who is resident in Singapore) is required. Directors must be natural persons and no corporate directors are allowed..
- Singapore companies must have a local address and appoint a resident company secretary.
- Every company must file an annual return with the financial statements. Unless exempted (for e.g. as a ‘small company’), an auditor must be appointed within 3 months from the date of incorporation.
Various government incentives and grants are available to support companies in upgrading their capabilities, enhancing productivity, innovating and undertaking business transformation and regional expansion.
What are the challenges faced for those that want to start a business?
In the article from Forbes, “Steps to take before starting a business with a Partner or Cofounder” it was noteworthy to see that even with half a million new companies incorporated each year in the UK, the percentage of company dissolutions can be just as high, due to a break-down in founder relationships for various reasons such as conflicts and changing priorities and commitments.
We see company incorporation as only the first step. The real challenge is when the business starts and what happens beyond that. Often overlooked is the relationship with your business partners which forms the foundation of your business. It’s important to flesh out from the start what your expectations are at the onset and to work through these terms with your co-founders and business partners in the form of a founders or shareholders’ agreement. Discussing and properly documenting founder expectations, with the help of your legal adviser, can ensure that parties start on the right footing as this process gives everyone an opportunity to surface issues, anticipate conflicts and resolve sticking points – thereby nipping potential problems in the bud before they grow to threaten the business.
GET IN TOUCH WITH US
Contact us for a no-obligation discussion of your business’ legal needs in Singapore. We help businesses from all over the world take their first step here, and help them succeed as they grow.