Currently looking forward to start some business activity in Singapore, I was seriously wondering how that is done AS A FOREIGNER of Singapore. Briefly, you either start a “business” (French equivalent: EURL), with one person only, your income is taxed based on Income Tax, or your “company” (French equivalent: SARL), in which at least two people are needed and 1Euro is enough, tax being based on Company Tax.
Most of you will likely come here to work for an existing (multinational) company and will not have anything to do with the following but some may have to set-up their own company or branch (on the side) or a spouse may. Dependant pass holders are not allowed to work in Singapore but they are allowed to start a business. For full current details we refer you to the Singapore (government) RCB website but below the principles for your quick reference.
Company or Business
There is a distinction between a company or a business in Singapore. A business is a sole-proprietorship or partnership that is not incorporated, very roughly that means you are not a legal entity that can own property or shares etc. and are personally fully liable for what your business does and your business revenue will be taxed as personal income. You can also not employ foreigners.
A company is a legal entity with paid-up capital that can own property and stock etc., can employ anyone, needs audited accounts etc. and in which you (generally but be careful with certain professions) will not be personally liable for company debts etc.
We are not discussing offshore companies here.
Setting-up a business
Starting your own business is relatively easy and cheap. All you need is a valid employment or dependants pass, a credit card and a valid business address and you can apply online through the bizfile site.
Note that you can not use HDB addresses and that some rental contracts do not allow your place to be used for business purposes. Total application cost, for 1 year, are S$ 65,– in 2004.
You will have to apply for a ‘Singpass’ to log on. You can apply for this pass online too, the bizfile site will direct you.
Setting-up a company
Starting a company is not hugely complicated but requires more than a business. For starters you need 2 directors as a minimum so if you want to start for yourself you need to find somebody to be named as co-director, this person does not necessarily have anything to say in the company.
You will need an auditor for your accounts, you will need articles of association and you need to pay-up a certain capital. This capital can, literally, be a couple of dollars but bear in mind this will be a matter of public record and in some business people will be weary of such a company.
Depending a bit on your set-up you may also need 2 local agents and the help of secretarial services. The RCB website gives you information on all of this and advices you to enlist the help of a professional to start a company and we do the same.
A special type of company is a ‘foreign branch’. This is a company not incorporated in Singapore which does not have to pay-up capital but is further treated pretty much as the above. Again; use a professional.
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Source : xpatxperience.com