With its solid economy, its attractive geographic position, and its low taxes policy, Singapore appears as a good opportunity for entrepreneurs and SMEs wanting to expand in Asia. However, creating a company in Singapore is not that simple.
To do-so, as a foreigner, your only choice is to have the investor status. It means that you will have to bring capital to Singapore, after which you should be able to name yourself as Managing Director. This article describes what are the different steps you will go through and how to save as much money as possible.
- A paid-up capital of SGD73,000 (as of September 2012). Take into account that you will not be able to pay yourself a salary for a few months. I advise you to anticipate a capital of SGD90,000.
- An address in Singapore. This will be used to receive your in-principle letter of approval for an entrepass. You can use the address of a Singaporean friend.
- SGD40 for the initial submittion of business plan.
- SGD180 for the release of your Entrepass.
- About SGD1,500 to pay an incorporation company.
- A strong will and friends in Singapore will make things easier.
- About SGD60 for a virtual office
First step: Create and submit a business plan
First of all - and it's great - you are required to create and submit a detailed business plan for your future activity. The maximum number of pages is 10. If you have no idea on how to make it some websites can help you go through that step. You can also hire companies to write it up for you. However we advise you to do it on your own. There are two reasons for this: cost-effectiveness and also because it will help you know how to market your products and define objectives for your business.
If you are new to making business plans and are unsure financial projections, keep in mind that these are forecasts and the government does not expect them to be totally accurate.
Once your business plan is finished you will have to deposit it at any SingPost office in Singapore. You will also have to fill documents summarizing your current situation - these can be found on the Ministry of Manpower (MOM) website (here). The fee for an Entrepass application is 40SGD (September 2012).
You will have to indicate an address in Singapore to where MOM will send you their answer.
Before submitting it I advise you to check whether the business name has already been registered in Singapore at Bizfile. If the name of your dream is free, then you are ready to go! Note that you can find at the bottom of this article an example of business plan for free.
Second step: Prepare every detail
The Ministry of Manpower of Singapore should take about a month to accept or decline your application. If they refuse it, and that being a Singaporean entrepreneur is your dream, I believe you should apply again later, especially since the number of Entrepass available fluctuates depending on the period of the year. Note that it might be wise to work on your business plan again.
Once you get accepted - which is very likely to happen if you follow all the steps described on MOM's website - you will have one month to incorporate in Singapore, create a business account, and move your capital here. This period is very short. And I say this for the following reasons:
- The one month period starts on the day when the letter is sent (and not received) - this means that you actually have 3 weeks,
- If you are abroad, you will have to book a ticket to come as soon as possible to Singapore and also ask your friends in Singapore to scan the in-principle letter of approval and print it. Otherwise, you might not be allowed to go through the immigration.
- Incorporation time can take up to one week.
- Paid-up capital transfer can also take up to a week.
A way to save time is to start contacting an incorporation company just after you submit your application. This way you can already fill out some required documents.
Also, it might be wise to be already in Singapore by the time MOM is supposed to give their answer (about one month after your submission).
Note that in case you lack time, you can try asking MOM for an extension of the validity period of your In-principle approval letter for an Entrepass. It might not work, but it is definitely worth a try.
Third step: Business account creation
This part deserves a whole paragraph as it is a bit tricky. Indeed, most Singaporean banks will refuse to create a business account as long as you do not have an Entrepass.. Legally they are wrong, but we are not here to discuss about suing them.
The only - and best - bank that will accept is DBS, you will have to bring both your in-principle letter of approval and the M&AAs given by your incorporation company.
It will take up to one week to create your business account. After this, you should transfer the paid-up capital right away.
Note that you might need an office address in Singapore before opening your company bank account. I advise you, at first, to pay for a virtual office (SGD60 a year including letter collection).
Fourth step: Getting there
Once you have gone through these steps, you are ready to submit through iSubmit the M&AAs and a bank statement proving that the company owns a paid-up capital of SGD73,000.
After a few weeks, you should receive the final positive answer from MOM granting you an Entrepass. Not that you will be required to book a meeting in MOM building at the Riverwalk. It will cost you about SGD160 to process your Entrepass. You can also ask your incorporation company to do it for you; however expect some extra-fees (between SGD300 to SGD500 depending on the company).
Once you get your Entrepass, you can start granting yourself a salary.
Fifth step: Setup your business
Now that you did all the administrative work, you might need some business cards, website, leaflets to start operating, right? Regarding these matters, we will be glad to help you and accompany you in your project. Welcome to Singapore!