Ebook: Starting up in Singapore? Here’s what you need to know

Photo credit: World Bank’s annual report.

Company founders in Singapore need to register with the Accounting & Corporate Regulatory Authority (ACRA), which oversees business entities in the country. ACRA offers detailed guides on setting up a company. Local agents such as law and accounting firms can help with the process and act as your representative here.

Why is Singapore a good idea?

Some of Singapore’s perks for entrepreneurs: a favorable tax environment (corporate tax is 17 percent, very low compared to Singapore’s close neighbors), English as the official language, a stable political system, and a strategic location that allows easier access to other markets in Southeast Asia and broader Asia-Pacific.

Singapore is already a major trade hub connecting Asia to the rest of the world. A lot of multinational companies have chosen to base their Asian headquarters in the city-state. Venture capital and private equity funding increased since last year to reach a five-year peak, according to valuation and corporate finance advisor Duff & Phelps. And there is no shortage of venture capital funds to back promising companies.

Singapore’s small size allows for a tighter ecosystem where several co-working spaces and startup communities offer meetups, networking, exchange of ideas, and support to budding entrepreneurs.

The Hub is a staple among co-working spaces and startup communities in Singapore. Photo credit: The Hub.

What’s the catch?

The flipside of Singapore’s cosmopolitan status is an exorbitant cost of living, particularly for foreigners living and working in the country. Singapore was the fourth most expensive city in the world to live in for 2016, according to human resources consultancy Mercer. This results in higher labor costs for employers.

Finding the right people is also challenging. High-caliber technical talent is scarce in Singapore, as people are drawn to more prestigious destinations like Silicon Valley. The government has been trying to address the problem with an increased focus on training and education but that’s a long-term plan.

Hiring restrictions on foreign talent aren’t making things any easier either.

The government’s role

Unlike other countries, Singapore’s government seems to grok startup entrepreneurship and tech innovation. The Infocomm and Media Development Authority oversees a number of initiatives to help develop the ecosystem, like providing accreditation services for promising startups and creating connections between technology businesses and corporations.

The country’s Economic Development Board is actively exploring how to better support startup entrepreneurship, while its investment arm, EDBI, has been backing young businesses in Singapore and abroad.