GUIDE FOR FIRST TIME ENTREPRENEURS
DECIDE A SUITABLE BUSINESS STRUCTURE
There are many types of busines entities that you can choose from. They are sole proprietorship, partnership, limited partnership, limited liability partnership and company. You may refer to the table below to determine which type of structures suits your business best.
In general, most entrepreneurs would prefer to incorporate a Singapore company. The main reasons are limited personal liability, tax incentives, scalability of busines and ease of funding. Furthermore, the cost of maintaining a Singapore company is not prohibitive nowadays.
DECIDE A COMPANY NAME AND BUSINESS ACTIVITY
The chosen name represents your company and the value you want to bring to your clients, vendors and other stake holders. Hence, it is important all shareholders and directors must come together and brainstorm for the best name.
Sometimes, a company name and its business activity may need additional approval from a referral authority due. This will increase the incorporation process by up to 14 days. You can click Here to find out more.
HOW TO INCORPORATE A COMPANY
There are two phases in setting up a company in Singapore, namely the pre and actual phases. Here we will guide you on the entire process.
ANCILLARY MATTERS AFTER INCORPORATION
1. UNIQUE ENTITY NUMBER
An unique entity number (UEN) will be issued by ACRA. This is the standard identification number of a company. It will be used to correspond with government agencies such as Central Provident Fund (CPF), Ministry of Manpower (MOM) and the Inland Revenue Authority of Singapore (IRAS).
The UEN is similar to the NRIC. While the NRIC is used to uniquely identify Singapore Citizens and permanent residents, the UEN is used to uniquely identify an entity.
2. MARKETING BROCHRES
You will also receive marketing materials in your letter box from corporate service providers like us. The mailers will market the various corporate services that you can subscribe to. Some examples of services
are secretary, book keeping, GST registration and taxation. Compare the various packages to ensure you are getting a good deal.
3. PERMITS AND LICENSES
In some sectors, you need to obtain licenses and permits before you can commence the business. As a rule, businesses that require permits and licenses are as follows:
Please refer to GoBusiness Licensing website for the type of permits and licenses that you need to apply.
4. DESIGN A WEBSITE
In this present era, a website is a must for all businesses. You need the following to set up a website successfully:
Have a web host (annual cost can range from less than $100 to thousands of dollars, depending on your requirements).
Register a domain name (around $15/year for .com domain).
Engage web developers to design your website. Normally, a simple content website is quite economical to set up. However, a site that has e commerce functions and good user interface will cost a lot more.
5. IMPLEMENT A GOOD ACCOUNTING SYSTEM
According to the Income Tax Act and GST Act, companies are required to keep the business transactions for at least 5 years. Hence it is important that every company has a good accounting system to record all transactions accurately for compliance purpose.
Furthermore a good recording system allows directors to monitor receivables, payables and cash flow of the company. This helps the directors to make better and quicker business decisions.
On the other hand, there are businesses that only want to concentrate on their core competencies and outsource the mundane job of accounting to professional firms like us. You can find out more about Accounting and Tax services.
6. SECURE A GOOD OFFICE OR INDUSTRIAL SPACE
Depending on your business requirements, you may need to rent an office or factory unit. In this context, it is important that you engage the services of a good agent(s). A good agent would be able to help you to source the desired space as soon as possible.
Under Urban Redevelopment Authority’s guidelines (URA), all industrial properties are categorised into two zonings, namely Business 1 (B1) and Business 2 (B2). B1 means light and clean industrial use while B2 is meant for heavy industries that have greater environmental impact.
On the other hand, if you operate a small scale business in the beginning, it would be more feasible for you to operate from your residential home. Reason being you can save a lot on the rental expenses. After your business has grown to bigger size, you can then consider moving to a proper office or factory unit.
NEED TO REGISTER FOR GST?
It is compulsory for you to register for GST if:
Your taxable turnover for the past 12 months at the end of each calendar year exceeds $1 million.
You can reasonably expect your taxable turnover to exceed $1 million for the next 12 months.
On the other hand, you can also register for GST voluntarily. The main benefit is that you can claim for
GST incurred on your purchases. The disadvantage is that you need to incur more expenses on compliance issues.
You can refer to IRAS website for a better understanding of the factors to consider before voluntarily registration.