Singapore: one of the most attractive business destinations in the world. Thousands of entrepreneurs venture here in a quest to make a name for themselves, eager to leverage our country’s friendly tax policies and transparent corporate laws.
But just because a place has a reputation for being business-friendly doesn’t mean it’s cheap. There’s a whole heap of expenses to consider when you’re starting one here — regardless if it’s as a sole proprietorship or a private limited company.
There’s no fixed amount that you should prepare when you’re starting an enterprise in Singapore. It depends on several other elements, like company registration charges and office space rentals. So let’s break down the major factors that go into the cost of establishing a business in Singapore.
What Factors Affect How Much You Spend To Set Up Shop?
Company Incorporation Fees
To operate legally in Singapore, you need to apply the business with the Accounting and Corporate Regulatory Authority or ACRA first. You need to pay 15 SGD to reserve your business's name and pay 300 SGD for the company registration fee.
If you’re a foreigner, you may have to spend more than that to register the business, as you’re required to have a filing agent submit the application for you.
Paid-up Capital Prerequisite
The ACRA typically requires a minimum paid-up capital of 1 SGD from applicants, but do consider having a higher amount if you want to boost your credibility and reassure investors and financiers.
You may also need a higher amount depending on the industry you’re venturing into. For instance, insurance companies have a minimum requirement of 300,000 SGD, while travel agencies need 50,000 SGD (if they only organise tours in Singapore) or 100,000 SGD (if they also handle accommodations).
Opening a Bank Account
A corporate bank account is a must for keeping your finances on track. Most banks require initial deposits to open accounts, so make sure you have ample funds to meet their requirements. Do also check if they also have any one-time fees for opening business accounts.
Your Office Setup
Singapore’s company registration requirements mandate that businesses must have a local registered address — even if their operations are 100% online. This gives you two choices:
Rent or buy a physical commercial space - This will have more upfront costs, including utilities and maintenance. However, this can also speed up collaborations and communication among teammates and lets you monitor their productivity more closely. It also conveys a professional impression to clients and partners.
Rent a virtual office space - This option has significantly lower overhead costs and lets you work anywhere you want. You can still have meeting rooms and mail handling services, but you will have limited control over your employees’ work environments.
Creating Your Online Presence
A digital presence is practically essential for modern businesses, so you’ll need to build an official website and set up social media profiles for your company. Not only does this allow you to market yourselves online, but it also serves as another communication channel for your customers.
Expect to spend at least 1000 SGD for basic websites and 5,000 or higher for more advanced ones.
Will You Outsource or Not?
Outsourcing various activities like accounting and marketing is a common practice among Singapore’s businesses. It saves you from having to hire in-house staff that would cost you more since you have to account for their salaries and benefits.
By engaging with a third-party provider, you only have to pay for the services you hired them for. But be sure to review their pricing models carefully so you can get the most value out of your outsourcing budget.
Get Expert Business Advice to Optimise Your Finances
With so many costs to consider when your business is still at the beginning, how can you make sure your money is going to the right places? Don’t be afraid to approach a business consultancy for help with this matter.
These service providers do more than just walk you through the company registration process. They can also provide advice on concerns such as financing options, tax deductions, and cash flow monitoring — all of which can be crucial to a new enterprise.
Manage Your Money to Start Successfully in Singapore
Singapore provides one of the best environments for entrepreneurs to get started, but you should still be mindful of the costs involved in setting up shop here.
So don’t hesitate to ask for help starting things on the right foot with your funds. There are local business experts who can be of service — all you have to do is reach out to them today.
