How To Set Up A Business In Singapore in 2021 (Post LOC)

Photo by Tyler Franta on Unsplash

The past year has been all about the pivot, and for many people in Singapore, it has been more of a 180 leap. Whether it’s because they lost their job, or realised (while working out of a corner of their bedroom) that they were in the wrong career, or their visa wasn’t renewed due to the MOM changes, a lot of people decided to set up their own company.

CNBC recently released a story spotlighting “pandemic entrepreneurs”, and it’s definitely a trend we are seeing at Accela.

Accela Finance & Corporate Secretary helps companies navigate the initial checklist that goes along with setting up a company in Singapore, and makes sure your company is built to be compliant with regulations both at launch, and in the long-term.

Thinking about making a change for yourself? Here are some of our most frequently asked questions around company incorporation that may help you navigate the decision.

I’m not Singaporean or PR, can I apply for my own EP?

A lot of the questions we are getting at the moment are around visas. Now that LOCs (Letter of Consent) aren’t being issued, the best option is to apply for an EP (Employment Pass).

While this might seem like a big change, the Accela Work Pass Processing team always recommended foreign founders set themselves up on an EP, as it allows them to appoint themselves as the director, and lays the foundation for the company to grow. 

This comes at a higher cost because typically you have to be able to pay yourself a base salary of around $8,000 per month in order to obtain pass approval, compared to the LOC which had no minimum salary requirement. 

You might be thinking, “but the minimum monthly salary for an EP is $4,500, not 8,000”. Yes, that’s true, but MOM does not approve EPs liberally, and you’ll need to prove you’re a specialist in your field, can add value to a Singaporean core workforce, and will train the next generation of specialists in your field to have your application approved. As an experienced professional can command a salary of around $8,000 or $10,000, this is a more reasonable target.

Do I need to hire someone even if I’m a consultant and operating alone?

It's important to keep in mind that as a business owner in Singapore, you have the responsibility to create economic opportunities here. The government’s current Jobs Growth Incentive really helps with this.

Accela Talent can walk you through the process in more detail. We can also show you examples of the trajectory of businesses that have successfully grown from a one-person consultancy, by hiring great local talent.

Each company in Singapore needs a local director - can I appoint myself?

Yes, every company in Singapore needs to appoint a local director. Ideally, they  should be a Singapore citizen, but they can also be a Permanent Resident or someone with an EP employed by the company.

Your staff member could be your local director, but a lot of foreign-owned businesses decide to nominate a director via a company like Accela that knows the system inside out – the cost of non-compliance in Singapore is not worth the risk! You can appoint yourself as your company director once you’ve sorted out your work pass.

Anything else I should be taking into account?

ACRA (the Accounting and Corporate Regulatory Authority) have the following requirements for business looking to set up here:

1) A Registered Filing Agent 

This entity will submit the online business application on your behalf and can be a law firm,  accounting firm, or a corporate secretarial firm. 

At Accela, we’re familiar with the local laws and will do the necessary background checks on the directors and shareholders before incorporating. We will also ensure the company has prepared all the correct legal documents before lodging the incorporation.

2) A Registered Office Address in Singapore 

And it can’t be a PO Box! Ideally, it will be a business address. Many Corporate Secretary providers, including Accela, offer an address as a  “virtual address” for your business. If necessary, they will handle the mail management to ensure any important mail is always brought to your attention.

3) A Bank Account 

This is another thing Accela can help you navigate. We will help you choose the right bank for your business needs, be it a local bank with a brand, or a neobank like Wise (formerly Transferwise). 

4) Someone to oversee your company’s compliance

There are lots of mandatory annual compliance requirements for businesses in Singapore, including holding an Annual General Meeting and filing an Annual Return each year. 

If you incorporate with Accela, we include one year of corporate secretary services free of charge. In addition, our finance team can offer bookkeeping support, preparation of accounts and corporate tax filing. We will track every step of your company’s necessary compliance so you can focus on growing your business.

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The thought of going out on your own can be daunting, but hopefully we’ve made it sound a little less complicated, and now you know where to turn for support. Get in touch with our friendly team to chat through your requirements, and how we can help you bring your business to life: [email protected].