HOW CAN INDIANS START A BUSINESS IN SINGAPORE? WHAT ARE THE LEGAL REQUIREMENTS FOR THE SAME?

Before starting a business in any country, it is important for a businessman to scrutinise the profits and losses along with the laws and policies applicable in that country regarding ownership, taxation and other business activities.  Singapore, as per World Bank’s 2019 annual business survey report has been recognised as the best place to do business among 189 countries of the world. It is considered to be the most suitable regional or international business hub because of its low tax rates, conducive business environment and rapid rate of economic growth. Setting up a business in Singapore is an easy task for anybody including foreign nationals. However, the first steps to be taken as a business owner will not be fun, but they keep the businessman out of trouble with the laws.

Being the best in the world comes with a certain monetary cost as well. Incorporating a business in Singapore can be fairly expensive for a foreigner as it involves a huge amount to be invested initially in different mandatory procedures. However, Singapore has a double taxation agreement which saves on being taxed twice for the same income.

A few of the most important steps to be taken before incorporating a business have been listed below.

1.    Hiring a local director (should be a citizen of Singapore or a person having employment visa)

2.    One shareholder

3.    Hiring a company secretary

4.    A local address to be used as registered office address

5.    Hiring a registered agent

6.    $1 as paid-up capital

Apart from the abovementioned list, there are certain legal requirements for starting a business in Singapore as a foreigner.

• ·                     Engaging a Registered Agent:  A resident of Singapore can prepare and file his/her own incorporation application, however, it is mandatory for a foreign national to engage a registered agent to set-up a company. The agent can be a law firm, an accounting firm, or any company secretary.

• ·                     Filing a name application:  After a registered agent has been hired, the company has to prepare and file a company name application online with the Accounting and Corporate Regulatory Authority, Singapore. The name approval generally takes one day, however, if the proposed name requires approval from any other regulatory body, it may be time consuming. The fee for filing an application with the Accounting and Corporate Regulatory Authority is $15. However, this name once approved, is available for 120 days only. Hence, the incorporation application has to be filed within 120 days of the approval.

• ·                     Safeguarding the Intellectual Property: The company, while filing the incorporation application must keep in mind the Intellectual Property Rights. The name chosen must not be violative of the Intellectual Property Rights of the already existing companies in Singapore. Further it should not be obscene or too identical to any other trademark. However, along with this, the company should also protect their own trademark from being exploited.

• ·                     Filing an Incorporation Application: After securing a name approval from the Accounting and Corporate Regulatory Authority, the company has to prepare and file an incorporation application within 120 days. The company’s Memorandum and Articles of Association are also prepared and finalised for the same. The application is filed with a fee of $300 and certain other requirements have to be met as well. They are:

1.    Company name approval  letter

2.    Brief description of the business activities

3.    Directors’ details

4.    Shareholders’ details

5.    Registered office address details

6.    Company Secretary details

7.    Memorandum and Articles of Association

8.    Copy of Identity Card of the Director (Singapore local director)

9.    Copy of the passport of foreign promoter

• ·                     Creating a bank account:  After the incorporation process has been completed, the next step is to create a corporate bank account. The physical existence of the Directors is mandatory for creating an account. The process involves presentation of certain documents along with a valid reason for opening an account.

• ·                     Acquiring a Business license:  A business license is a permit issued by a Singapore government agency that allows businessmen to conduct a particular type of business. In order to apply for the business license, a company must be registered with the registrar of companies.

The entrepreneur pass to start a business in Singapore comes with a lot requirements and commitments to be made. These requirements have to be fulfilled in order to run a successful business in Singapore.  After weighing the pros and cons of starting a business in Singapore, we come to a conclusion that the ease of doing business in Singapore is incomparable to a majority of the countries. A recent article from The Trade, states that a new trade link has been cemented between Singapore and India which may open paths for many aspiring Indian businessmen to start their business in Singapore. This link has been formed after calling off a long-term legal tussle between the two countries.

However, apart from this business opportunity, the Trade and Industry Minister of Singapore, Chan Chun Sing said in an interview that the reputation of Singapore being the hub for business is hard-won but can be lost if it is not careful.

The Trade and Industry Minister at a dialogue with the international business chambers on Thursday, October 1, 2020, organised by Singapore Business Federation assured that the island country will remain committed to be open to the world and keep providing a business-friendly environment to international companies. He also said that there was a need to address the anxiety among the Singaporeans about their future given the current circumstances. Mr. Chan encourages and motivates people to showcase their efforts and talents as it plays a significant role in the development and growth of the economy and workforce. 

Research By -Ridhika Kapoor.