With Singapore’s long-standing reputation as one of the globe’s best places to do business, world-beating effective corporate tax rates of 0% to 17%, as well as many attractive government incentives, there has been a continuous influx of foreign investors considering starting a business in Singapore.
Whether you wish to run your Singapore business from overseas or are contemplating an extended stay for a more hands-on approach, this guide looks at the three main options available to register a foreign company in Singapore; thus allowing foreign investors to start a business.
Application for EntrePass vs Employment Pass
In a nutshell, an Employment Pass may seem easier to obtain, as most of its eligibility criteria is contingent on the individual applicant, instead of the business. That said, with the government’s recent clamping down on foreign labour, many market analysts have noted that it is becoming increasingly difficult to obtain an Employment Pass. Hence, engaging a good employment agency who can advise you on the application process, as well as assist you in liaising with the Ministry of Manpower (“MOM”) can be helpful. In addition, a licensed employment agency will be able to submit your application via MOM’s electronic portal, which is much faster than going by the manual route.
For an Entrepass, it is evident that one needs extensive preparation, particularly with the requirement of submitting the 10-page business plan that details the business goals and objectives. It would be very useful to first research on the industries that are well established in Singapore, as well as the growing industries that are being supported and encouraged by the government. Naturally, industries in their infancy with high value, or show potential to grow (such as the IT industry) will be able to benefit from more government incentives and are more likely to receive support from recognised research institutions or government-approved incubators. Given that most of Singapore is very technologically savvy, reaching out to venture capitalists or incubators via email or Skype is a fairly easy process.
Another aspect of the EntrePass is the requirement to progressively hire locals. While Singapore has an industrious, skilled workforce, their expectations are significantly higher than their peers in the nearby neighbouring countries. In a recent survey conducted by one of the largest job banks across a variety of academic disciplines in local tertiary institutions, it found that one in five graduates expect no less than S$4,000 for their starting pay . Naturally, for the business owner who is struggling with keeping costs low, this requirement may eventually become a burden.
Most importantly, as reflected above, one can apply for the Employment Pass once incorporation of the company is complete and the processing time is much faster than the EntrePass, which must be applied for within six months of incorporation. Hence, if one intends to apply for the EntrePass, do have your documents ready so that application can be made as soon as possible within the six month window.
Read more about Singapore Company Registration Options for Foreign Individuals at Rikvin.com.
