Singapore tops the World Bank annual reports as the “easiest” place for doing business year in year out, but still there are some myths based on wrong misinterpreting of the country’s business and administrative nature that prevent potential international businesses from putting roots in Singapore and benefitting from the World Bank’s discovery. Despite the government’s titanic efforts in pampering country’s business ecosystem, these misunderstandings are still powerful to pour concrete over Singapore-oriented venture initiatives and repel investors. Visa Express, the migration agency that knows the mechanism of company incorporation inside out due to its year-long experience in establishing firms in Singapore from scratch, adds its voice to the informational campaign to break the ice and represent Singapore as it is: a full-fledged business pad with unparalleled tax and procedure benefits.
“Today, we hear hundreds of active entrepreneurs discussing in one voice the perspectives of running a business in Singapore – and even comparing it with Israel and the American Silicon Valley,” says Cheng King Heng, the senior migration and incorporation consultant at Visa Express. “Singapore has irreversibly changed its business face since 2009 when the government started co-investing in new startups to attract more venture investors to the country. Singapore discovered its own unique way to creating self-sufficient business ecosystem – through building up a potential venture capital ground. To attract venture capital, the government had to change its own mindset for the venture one first. What we see know is the result of neatly carried-out investment schemes where the government played the first violin, as well as tax incentives, innovativeness and laws that are free from anti-competitive legislation.”
Singapore really has a false reputation of very conservative and “administrative” country. That’s why many entrepreneurs believe doing a business here is a matter of endless red-tape and dealing with the government that controls everything and pokes and pries into your business. This picture is far from reality. Even more: Singaporean government has really made some prominent efforts to make business conduction as simple and straightforward as possible. First of all: it is probably the only country in the world where the absence of red-tape meets close-to-zero corruption and low crime. The corporate tax is also outstandingly low – 17%. Secondly, they reduced to a minimum the number of forms the businessman must fill in for registering a company as well as for running it. The company can be incorporated in 1 or 2 days here if the investor or the businessman meet basic criteria which are:
they have a unique and approved name for their company (the migration & incorporation agency does such name checks);
the firm-to-be must have at least one local director and a local secretary (either a Singaporean or a permanent resident);
the firm’s paid-up capital is over 1 SGD;
the firm must have a real Singapore address for registration and paying a corporate tax.
Add to this that the new company must be sponsored by a venture capitalist or an angel for a minimum of 100,000 SGD and have its intellectual property registered by an authorised Singaporean firm. In 2009 the govt introduces a mind-blowing Technology Incubation Scheme that invites venture capitalists to invest one part of capital (approximately 15%) while the government takes responsibility to put up another 5 parts (85%). This scheme worked perfectly, and a lot of young and initiative investors have burst upon the scene boosting the amount of venture capital from unpretentious 27 million SGD in 2011 to breaking 2 billion SGD in 2013.
As you can see, the conditions aren’t so complicated for fulfilling for a potential company. Startups that are mushrooming in SG point to the fact that incorporation here is a kid stuff if you have a smart guide assisting you. The incorporation may still have some dangerous corners as the success greatly depends on the form of business legal entity you choose. It will impact not only your taxes, liability, and flexibility in borrowing funds, but also such sensitive stuff as your company’s image and attractiveness for investors and banks.
“Despite the incorporation in Singapore is a matter of couple of dollars, we still recommend our clients an elaborate approach to avoid possible frustration,” Mr. Heng says. “As an incorporation service, we provide a name check, help clients to manage their finances and calculate future taxes (in our team, we have our own competent incorporation accountant), handle all visa procedures… but the most important thing that must forego is determining on the appropriate legal entity. Wise decision will define your chances for success a lot.”
Mr. Heng also adds that when you are looking for an expert incorporation agency, you are likely to opt for the one that unites visa consultants, business experts, accountants and lawyers. Only such versatile pro team can provide across-the-board service that embraces entire incorporation process from the beginning till the end. “It took us years of devoted work to knock such team of pros. Now our clients don’t have to gather information and advice piece by piece from everywhere. One-stop agency can provide it all in one place,” Mr. Heng summarises.
Every business situation is unique and in many cases some additional services may be needed. For example, the government may require a business plan that must emphasize the company’s aim for innovativeness or a market research that shows your awareness of your position in the market or financial reports. An agency that can cover all these issues is able to provide more individualised solution.
The physical presence of the company’s founder isn’t necessary for business success in Singapore. As mentioned before, the company can be registered with one local director, and the real owner may stay offshore as much as needed. Singaporean government has provided a couple of visa options for businesses that would like to relocate their staff or the director himself. Employment Pass perfectly fits not only highly paid professionals, but also directors whose company has been already established in Singapore. EntrePass fits entrepreneurs who would like to be physically present in the country before, during and after incorporation. “Obtaining the passes became harder since the government introduced its course for securing work places for locals in the first place. Here companies also need a help of skilled visa consultants. For better strategizing, it is of paramount importance that the agency you rely on specialises in both incorporation and visa matters,” added Mr. Heng.
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