How to Start a Company in Singapore from Malaysia?

Congratulations! You’ve built a thriving Sdn Bhd business in Malaysia, and now you’re ready to take the next step: expanding into Singapore. Singapore’s reputation as a global business hub makes it an attractive destination for Malaysian entrepreneurs and new companies. This guide equips you with the knowledge and tools to navigate this exciting venture.

Understanding the business environment in Singapore

Navigating the business environment is crucial for a successful expansion. Singapore boasts a robust and business-friendly atmosphere, making it an attractive destination for foreign businesses. The city-state’s strategic location, political stability, and advanced infrastructure create a conducive environment for business growth.

In Singapore, you’ll encounter a vibrant market with diverse consumer preferences. Conduct thorough market research to identify the demand for your products or services. Leverage the insights from local market trends to tailor your business strategy for optimal success.

Furthermore, understanding the regulatory environment is crucial. Familiarise yourself with the Monetary Authority of Singapore (MAS) regulations and other relevant authorities. This knowledge will ensure compliance with financial and banking regulations, safeguarding your business from potential pitfalls.

Legal requirements and procedures for setting up a company in Singapore

Before starting a company in Singapore, it is essential to understand the legal requirements and procedures involved. The first step is to decide on the type of company you want to establish. Singapore offers several options, including a sole proprietorship, partnership, limited partnership, limited liability partnership (LLP), and private limited company (Pte Ltd), which is the most common and preferred type of business. Each type of company has its own set of requirements and implications, so it is crucial to choose the one that best suits your needs, especially for Singapore business registration.

Once you have decided on the business structure, you will need to register your company with the Accounting and Corporate Regulatory Authority (ACRA). This involves providing the necessary documents, such as the company’s constitution, memorandum and articles of association, and details of shareholders and directors. You will also need to appoint a local resident director, unless you have an Employment Pass or EntrePass. Failure to register with ACRA can result in fines or even prison time, making it important to comply with this legal requirement when starting a company in Singapore.

Choosing the right business structure for your company

Choosing the right business structure is a crucial decision when starting a company in Singapore. The structure you choose will determine your legal and financial obligations, as well as the level of personal liability you will have. Here are some of the common business structures in Singapore:

Sole Proprietorship: This is the simplest form of business structure, where the business is owned and operated by one person. The owner has unlimited personal liability for the business’s debts and obligations.
Partnership: A partnership is formed when two or more individuals come together to carry on a business with a view to making a profit. Each partner is personally liable for the partnership’s debts and obligations.
Limited Liability Partnership (LLP): An LLP is a separate legal entity from its partners. It offers a combination of the flexibility of a partnership and the limited liability of a company. Each partner’s liability is limited to their agreed contribution.
Private Limited Company: A private limited company is a separate legal entity from its shareholders. It offers limited liability to its shareholders, and the company’s debts and obligations are separate from the personal assets of its shareholders.

How to start a company in Singapore?

Setting up your company in Singapore involves a streamlined process that encourages foreign investment. Registering your business is a crucial step, and the city-state offers various business structures to cater to your specific needs. Choose the structure that aligns with your business goals and facilitates seamless operations.

The process of registering a subsidiary company in Singapore involves several steps:

Choose a Company Name: Ensure your chosen name complies with Singapore’s Accounting and Corporate Regulatory Authority (ACRA) guidelines and conduct a name availability check.
Appoint Directors and Shareholders: You can appoint yourself or others as directors and shareholders of the Singapore subsidiary.
Prepare Incorporation Documents: These documents include the company constitution, Memorandum of Understanding (MOU), and details of directors and shareholders.
Register with ACRA: Submit the required documents and fees to ACRA for business registration.

Utilise online platforms and expert services to expedite the registration process. Platforms like Grof provide valuable resources and support to simplify the incorporation process, ensuring that your business is up and running efficiently.

Additionally, establish a local business address and appoint a resident director, adhering to Singapore’s company registration requirements. This not only ensures compliance but also demonstrates a commitment to the local market.

Starting a business in Singapore as a foreigner?

To start a business in Singapore as a foreigner, there are several steps and requirements to fulfil. Here’s the basic requirements for foreign companies:

At Least One Singapore-Based Director: Foreigners must appoint a local director who is a Singapore citizen, permanent resident, or holds an EntrePass, Employment Pass, or Dependent’s Pass with a Letter of Consent (LOC).

At Least One Shareholder: The company must have at least one shareholder, who can be a foreigner.

At Least S$1 Paid-Up Capital: The company must have a minimum paid-up capital of S$1, which can be in any currency.

Registered Business Address in Singapore: The company must have a registered business address in Singapore.

Corporate Secretary: The company must appoint a local company secretary who is a resident of Singapore. You can rely on Grof for this.

Understanding the taxation system in Singapore

Singapore has a competitive and attractive tax system, making it an appealing destination for businesses. The country adopts a territorial tax system, which means that only income derived from Singapore is subject to tax. Foreign-sourced income, such as dividends, capital gains, and branch profits, is generally not taxable in Singapore, provided it is not remitted to Singapore. This means that incorporating a company in Singapore can lead to attractive tax reductions, as employee benefits programs can be classified as business expenses, reducing taxable income.

The corporate tax rate in Singapore is currently capped at 17%. However, newly incorporated companies may be eligible for tax exemptions and incentives. For example, newly incorporated companies can enjoy a tax exemption on the first S$100,000 of chargeable income for the first three consecutive years. There is also a partial tax exemption for the next S$200,000 of chargeable income.

It is important to note that companies must comply with certain tax filing and reporting requirements. This includes filing annual tax returns, maintaining proper accounting records, and submitting financial statements to the authorities. Failure to comply with these obligations can result in penalties and legal consequences from the Singaporean government.

Cost of Registering a Company in Singapore

The cost of registering a company in Singapore varies depending on factors like the chosen business structure and the complexity of the incorporation process. Generally, expect to pay for:

Registration Fees: ACRA charges a base fee for company registration.

Registered Address: You’ll need a physical office address in Singapore. Consider serviced office options for cost-effectiveness.

Professional Fees: Hiring corporate services firms can expedite the process and ensure compliance.

Tax and financial considerations

Singapore boasts a competitive corporate tax rate of 17%, making it an attractive location for businesses. Additionally, Singapore offers various tax incentives for specific industries and activities.

Understanding the tax implications of expanding to Singapore is vital for financial planning. Singapore’s taxation system is renowned for its simplicity and competitiveness. Explore tax incentives and exemptions available for foreign businesses, optimising your financial strategy for long-term success.

Partner with financial experts who specialise in cross-border transactions to navigate the complexities of international taxation. This proactive approach minimises tax liabilities and enhances your business’s financial resilience.

Consider opening a local bank account to facilitate smoother financial transactions. Engage with reputable accounting firms to ensure accurate and compliant financial reporting, enhancing your business’s credibility in the Singaporean market.

Hire incorporation services in Malaysia

Navigating legalities and regulations in a new country can be daunting. Engaging a reputable corporate services firm in Malaysia streamlines the process when you’re opening a new business in Singapore. These firms can assist with:

Recommending the most suitable business entity and guiding you through the company registration process.

Serving as your corporate secretary to manage filings and ensure governance compliance.

Facilitating the acquisition of necessary licenses and permits.

Assisting with the opening of your corporate bank account.

Providing dedicated support to ensure ongoing compliance with regulations.

Engaging professional services for company incorporation in Singapore is a strategic decision that streamlines the process and ensures compliance. Platforms like Grof offers comprehensive services, including legal support, document preparation, and submission to regulatory authorities.

Outsourcing these tasks to experts allows you to focus on core business activities, accelerating your entry into the Singaporean market. Collaborate with reputable service providers to benefit from their expertise and ensure a hassle-free incorporation process.

Moreover, consider engaging HR and payroll services to navigate local employment regulations. Ensuring compliance with employment laws and regulations is crucial for a smooth and legally sound operation in Singapore.

What are the opportunities and challenges of expanding to Singapore?

Expanding to Singapore presents a myriad of opportunities for foreign entrepreneurs, but it’s essential for business owners to be aware of potential challenges. Embrace the cultural diversity and innovative landscape, leveraging it to your advantage. Building strong local partnerships and staying agile in response to market changes are key to addressing key business needs and thriving in the competitive Singaporean business environment.

Expanding to Singapore presents exciting opportunities:

Access a New Market: Singapore’s vibrant economy and skilled workforce offer immense growth potential.

Regional Gateway: Leverage Singapore’s strategic location to access wider Southeast Asian markets.

Enhanced Reputation: A Singaporean presence can elevate your company’s regional and global standing.

Challenges also exist:

Competition: Singapore’s business landscape is highly competitive. You’ll need a well-defined strategy to stand out.

Compliance: Adapting to new regulations and legal frameworks requires ongoing effort.

Cultural Differences: Understanding Singapore’s business culture is essential for building strong relationships.

Conclusion

In conclusion, starting a business in Singapore as a foreigner can be a scary but transformative step. By understanding the business environment, legal considerations, and potential opportunities and challenges, you can position yourself for success.

Ready to embark on your Singapore expansion journey? Grof can help. We offer a comprehensive suite of incorporation services to streamline the process and ensure a smooth transition. Contact us today to learn more about our solutions for Malaysian businesses expanding to Singapore.