A Guide To Starting Small Businesses In Singapore post-COVID19

If you wish to start a business in Singapore, the process of ideating and establishing your business can feel complex and overwhelming. In this guide, we walk you through the 7 steps of setting up an SME in Singapore, focusing on the changes brought about by the post-COVID19 period.

Rest assured that the process is not as complex as it may initially appear, particularly as you can outsource your various regulatory obligations to a one-stop corporate services provider. At D’ Ark Services Pte Ltd, we ensure that the relevant paperwork for registering your business and for fulfilling its annual obligations are handled seamlessly.

Draw up a Business Plan

COVID has posed rising challenges for particular sectors of the economy, but it has also contributed to the rise of new sectors and niches. You should consider the viability of your business idea in light of this changed environment. You should also consider:

• What is your target demographic?
• What are the gaps in the market you aim to address?
• Who are your competitors?
• What are the unique selling points of your business?
• What do you project the start-up costs and running costs to be?
• How will you secure the initial funds for your business?
• How will you recruit manpower?
• Who would be your suppliers?
• Do you plan to attract investors, and how would you do so?

These are all the starting questions you should ponder before you begin the process of establishing your business. The impact and abruptness of the COVID19 pandemic has also shone a light on the importance of having an emergency business fund in the event of such unforeseen circumstances.

Decide Your Business Structure

Deciding on the structure of your business is crucial for registering it with the relevant authorities such as ACRA. You may choose from sole-proprietorships/partnerships, limited partnerships (LP), limited liability partnerships (LLP) and companies.

Compared to sole-proprietorships and limited partnerships, LLPs and companies hold the benefit of limited liability, protecting owners from personal liability for debts and legal actions taken against the LLP or company. However, such structures come with greater compliance requirements. For example, at present, companies are required by ACRA to appoint particular personnel such as a minimum of 1 Singapore Resident-Director, 1 Company Secretary, and 1 Data Protection Officer. You are also required to have a minimum of 50 shareholders, and to report on the structure and particulars of these shareholders.

Regardless of the business structure you decide upon, various layers of regulations and paperwork are required. As such, the process may feel overwhelming, and regulations may also change over time. Furthermore, the structure you choose affects your legal status, setup fees, and taxation obligations.

As such, you may wish to consider consulting specialised accounting services, which can advise you on the structure best suited to your business and its profile, and to aid you in the process of establishing it. At Ark Associates PAC, we provide corporate services tailored precisely to such needs.

Secure Premises and a Registered Office Address

Will your location put you close to your target demographic? Does the location fit your image and brand? What are the financial costs of the premises? How will you stand out from competitors in the area? These are all basic questions you should consider when deciding the physical location of your business. You may choose to look at online listings for spaces to rent, or simply take a walk around suitable neighbourhoods. One silver lining to the COVID19 pandemic is that the rental costs of premises tend to be lower in this time period.

Keep in mind that a local registered office address is required of all businesses in Singapore. Official correspondence, such as mail from the government, is routed to the address. If you are starting a small-scale business, you can choose to reduce your operating costs by forgoing a commercial space, and instead establish a home business under the Home Office Scheme, whereby you register your private residential property or HDB.

Consider Setting Up An Online Presence

Beyond a physical location, having a strong digital presence has become all the more crucial and effective during this COVID19 period. The increase in the number of work-from-home personnel has meant an increase in the frequency and volume of internet activity around the world. As such, the online sphere has become a crucial domain for informing potential customers and clients of your business.

Digital marketing and social media marketing are cost-effective methods of marketing, PR and news dissemination. These methods also allow you to reach more niche markets and to compete with larger, more established brands. When setting up your website, make sure to secure a domain name, and to populate your site with helpful information in a reader-friendly, SEO-friendly format. If you choose to engage in social media marketing, consider offering promotions and discounts to your online fans, possibly in exchange for following your account or sharing a post. Social media is also a good space for engaging with your customers to build a community and gather feedback.

Register with the Relevant Authorities

All businesses in Singapore are required to register with ACRA. When registering, you must have the particulars of your upcoming business on hand, such as its business structure and office address.

Depending on your chosen business structure, you may also be required to submit further details such as your shareholder(s) information and a register of registrable controllers. To reduce the manpower and time your company dedicates to such tasks, you may wish to consider employing the services of an accounting firm. At Ark Associates PAC, we provide corporate services which give you the peace of mind that your company is complying fully with ever-changing regulations.

Consider your Bookkeeping Obligations

If you choose to establish a Singapore-incorporated company, filing your annual returns with ACRA is a mandatory obligation. For most companies, this includes the annual financial statements, where you must account for your revenue and expenses, and manage your cash flow. To fully account for your business expenses, we recommend keeping all receipts of transactions such as placing orders with your suppliers or purchasing ads. The COVID19 time period has also meant a change in accounting operations for many businesses- for example, any government subsidies and rental waivers provided to your business must be accounted for. You also have further annual obligations, such as confirming any changes to your business activities, and to verify the details of your company’s shares if applicable.

Bookkeeping for your business may feel time-consuming and complex, particularly as you must meet the deadlines of filing the various paperwork. For example, you must file your annual returns within 7 months of the closing of your financial year end, lest enforcement actions by ACRA are taken against the company. As such, we recommend engaging the services of a specialised accounting firm. At Ark Associates PAC, we ensure that your business is complying fully with its bookkeeping obligations in a timely manner.

Consider your Taxation Obligations

While your tax obligations are not immediate, consider that filing taxes will be an annual obligation for your business. Your obligations depend upon the structure of your business- for example, if you establish a sole-proprietorship, you should report your business’s income in your personal income tax return. However, companies file the Singapore corporate income tax instead, known as the Estimated Chargeable Income (ECI).

It is advisable to familiarise yourself with the various forms of taxation and the deadlines you must meet- however, we nonetheless recommend engaging an accounting services provider to aid you in the matter. Engaging specialised accounting services means you can be fully assured of avoiding any legal problems, particularly as there are frequent changes to the amount and types of taxes your business must file. At Ark Associates PAC, our taxation services ensure your taxes are filed appropriately in a timely manner, and we further aid in maximising your business’s tax deductions.

Conclusions

We hope that this was a helpful guide to setting up your business in Singapore, particularly in this post-COVID19 period. Feel free to contact us about our corporate services for aiding you in your upcoming business endeavours. You may also learn more about our full range of services here.