Singapore enjoys a great position as an Asian country where the foreign laws are strong and a friendly taxation environment thus attracts many of the Chinese companies who wish to take advantage of establishing their business in this region. Chinese companies interested in doing business in Singapore must take into account the important issues outlined in this guide.
Content Outline
Legal and Regulatory Requirements
Singapore has a clear and highly developed judicial system. Foreign firms should take cognizance of Companies Act and Employment Act among others2. It may be helpful to consult a local lawyer to untangle these intricacies. Chinese firms should also adhere to the Accounting and Corporate Regulatory Authority (ACRA), an authority that regulates business entities and public accountants in Singapore.
Taxation Policies
Singapore has probably the best corporate tax rate worldwide and goes down to 17%. Moreover, there are special tax incentives for start ups in Singapore. Once your annual taxable revenue goes above one million SGD, you need to be familiar with GST.
Investment Opportunities
Singapore is a gateway into vibrant market places of SouthEast Asia. The investor can get returns on investments into areas like FinTech, biotech, manufacture, logistic and digital services. Secondly, different schemes offered by the EDB in Singapore to foster foreign investments are discussed.
Cultural Aspects
It is important to understand Singaporean cultural subtleties while conducting business. Although most of its business is Westernized, respect for hierarchy and relationship building are still among the Asian cultures.
Key Differences between Business Cultures in China and Singapore
Although both countries recognize the importance of relations. In China, business emphasizes ‘Guanxi’ which means relationship in Chinese. On the other hand, Singaporean companies prefer meritocracy. In addition, Singapore’s business culture is direct in comparison to its counterpart China whose culture is indirect.
Hedge against geopolitical risk
Last year about 500 Chinese companies have either relocated or registered in Singapore looking for hedges against political risk emerging from a growing tension of the Beijing-West conflict. Online fast-fashion retailer Shein, electric vehicle maker Nio, and IT services provider Cue are some of the major players in this rush, along with parent company’s relocations, listing in stock exchanges, and partnerships within Singapore.
However, Chinese companies used Hong-Kong as a base but today Singapore has a strong regulatory framework and global reputation, which gives access to international finance and India markets.
This trend is driven by Singapore becoming a financial hub, thus attracting businesses into the country that are looking for appeal internationally and regulatory security. With new regulations in Singapore, the government tries to make them legitimate and at the same time make Singapore a safe center for business globally.
Company Setup Requirements
To set up a private limited company in Singapore, you will need the following:
- Minimum of 1 shareholder
- Minimum SGD 1 paid-up capital
- Minimum of 1 Resident Director
- Local company secretary
- A registered Singapore address
After registration you will get an Incorporation Email from ACRA – your Incorporation Certificate. A name for your company is crucial, which you can look up by Singapore company name check for confirmation. Nevertheless, always be aware you do not set up a company alone, you require a designated filing agent / corporate service provider like FastLane.
Steps to Setting Up Company in Singapore
Now that you have learned about the company setup requirements of Singapore business entities, we can delve into the procedure of setting up a business in Singapore.
1. Choose a Business Name
A step towards selecting a name for the business that is established in Singapore. This also entails similarity of any name in Singapore or with registered trademark. It should show what type of business you do and something easy to remember and pronouns.
2. Check Name Availability
Select a business name and go to ACRA to check if the name is available. If the name is available, and fulfills all the conditions you will be able to register it for your company. It is important to mention that reserving a company name does not mean incorporation of a company.
3. Register Your Company
Nevertheless, it is necessary to involve a professional business registration service provider to help you register your company in Singapore. They will assist you in making required documentation and thereafter submit it to ACRA. Registration involves the submission of a constitutional document, directors, and shareholders data and registered office enquiry.
4. Appoint a Company Secretary
In Singapore, every company should have a company secretary appointed after six months of incorporating the business. It is the role of the company secretary to determine whether or not the organization’s activities are legitimate. They also perform other clerical duties such as creation of an electronic record for the company and filing annual reports.
5. Apply For Necessary Licenses and Permits
All it will depend on the nature of your business, however, you may need a few licenses and/or permits. For instance, while opening a new restaurant, you must obtain a food establishment license from SFA. Be sure to look up every regulation on licensing of your sector.
6. Open a Corporate Bank Account
You will need to open a corporate bank account for your business. All the banks in Singapore require the presence of all shareholders and directors in a bank account opening process. Additionally, you will be issued with orders to provide vital documents like business profile and board resolution.
7. Hire Employees
When hiring the staff of Singapore you have to comply with the local legislation. Some of them include CPF registration and compulsory benefits, such as medical insurance and leave entitlement. The second thing is knowing about the local labor market and recruitments.
Practical Advice
- Understand the Market: Conduct a research on the market, consumers’ behavior, and competitors.
- Network: Establish contacts by joining the local business associations and chambers of commerce.
- Compliance: Complying with the relevant local laws and rules.
- Localize: Modify the products or services to suit local tastes.
- Hire Locally: Hire local natives who understands the local business environment and have a way of bridging the culture difference.
It is apparent that starting up a business in Singapore as a Chinese company means going through another world with its own laws and traditions. However, the strategic advantage of the city-state makes it a perfect spot to expand horizons.
How FastLane Can Help
FastLane being a corporate service provider in Singapore has helped thousands of companies worldwide expand. Using our services, Hong Kong companies should be able to easily move into or start up in Singapore. We offer a comprehensive service and process that is step by step, ensuring a smooth company incorporation.
With the help of experts from FastLane, incorporation of your Hong Kong company in Singapore is easier and faster than ever.