In Singapore, starting a construction company is a terrific method to fulfil your entrepreneurial dreams. As you can see, Singapore’s economy held up well during the global pandemic, having grown 1.3% in the first quarter of 2021.
Even though business is now slow in the construction industry, it is nonetheless making a major contribution to the economy. Its gross domestic product (GDP) contribution in 2020, at the height of the pandemic, was SGD12.1 billion.
The organised construction industry, having its origins in the Bronze Age, grew with the pyramids of ancient Egypt. Then, as a result of considerable improvements in building design brought about by the Industrial Revolution, the era of skyscrapers eventually began.
With advancements in design, materials, and procedures, technology is currently transforming and developing our modern fast-track construction sector.
In this article, you’ll get a glimpse of the procedures and processes that surround a business in the construction industry. We’ll also give you tips on expanding your business and demonstrate how to make sure you always comply properly with the regulations.
A Construction Business: What Business Is It?
Construction is the act of starting from nothing and constructing something. It is distinct from renovation and retrofitting, which enhances, restores, replaces, or fixes something that has already been created.
Building, industrial, and infrastructure construction all fall within the construction business, and each of them needs specialised teams to design and carry out the project.
It’s ideal to have a project manager, engineers for design and construction, project architects, and site managers who are experienced.
Some of the tasks a construction company performs include:
- Constructing, installing, and maintaining stationary structures.
- Building, engineering, structural, or finishing works.
- Mixed types of construction work, including specialities.
- Preparing sites and renting out construction machinery.
- Carrying out installation work on buildings.
The built environment industry in Singapore is strictly regulated by the Building and Construction Authority (BCA). They are leading Singapore’s Construction Industry Transformation Map and are in charge of the majority of approvals.
To promote transformational technologies in the built environment industry, BCA also created the BuildSG project.
Why Open Up a Construction Company In Singapore?
An important foundational component of the economy of a country is the construction industry. For Singapore’s built environment, which includes homes, shopping centres, business parks, and other infrastructure, it is something essential.
The North-South Corridor, Tuas Megaport, and Greater Southern Waterfront are all large-scale construction projects.
The construction sector is competitive, but it can also be rewarding. You can feel a sense of pride and accomplishment after constructing a hospital or a school, for instance.
Additionally, construction firms construct buildings, bridges, roads, and other essential elements of civilised society. As a way to fulfil your business and social obligations, you can also adopt “green” practices.
Singapore is a fantastic location to launch a business. Its status as a worldwide commercial centre, competitive tax regimes, and world-class infrastructure and connectivity are all big pluses.
With new projects in the works, the government is also dedicated to using sustainable building techniques. By the end of this year, the demand for new construction is expected to reach SGD28 billion, according to BCA.
What are the Requirements for Starting a Construction Business In Singapore?
Your company will need sturdy foundations, just like a building does. Prepare your groundwork by compiling the necessary business plans.
Investigate the most recent market trends, technological advancements, solutions, potential rivals, and suitable sites. You’re ready to go after you add a flexible financial plan and budget to the equation.
If you have all the necessary documentation, incorporating a business in Singapore is a simple process. BizFile, a business platform run by Singapore’s Accounting and Corporate Regulatory Authority (ACRA), is used for all online transactions.
Alternatively, you can take the contemporary path and work with companies offering business solutions, such as HeySara. You have the freedom to concentrate on the business side of things, thanks to Singapore’s company incorporation services.
What Is the Procedure for Registering and Setting Up a Construction Business In Singapore?
Step 1: Pick a Name for Your Company
Choosing a name for the business is the first step. By doing this, you’ll be able to reserve the right to use your company name and register it in BizFile+.
The name will be held for 120 days or until the firm is officially formed with the payment of an SGD15 application fee.
Additionally, there are particular restrictions on a firm’s name. The company name, for instance, cannot be the same as or similar to the name of another business.
Some words are quite restricted; thus, before registering the firm’s name, you will need approval from the relevant authorities.
Step 2: Register the Company
The company must then be registered. The business must gather the required paperwork for submission to the Accounting and Corporate Regulatory Authority (ACRA), which is in charge of regulating the registration of business organisations.
Depending on the type of business organisation you prefer, different documents are needed. However, the following are the essentials:
- Resident shareholder or director.
- Singapore registered address.
- Company Secretary.
- Comprehensive business plan.
- The thorough layout of the business premises.
- Startup capital of at least SGD1.
Step 3: Apply for Licenses and Permits
In addition to registering the company as a legal business organisation, construction businesses must get licenses and permits from the Building and Construction Authority (BCA) to undertake building projects, engineering, renovations, and demolitions.
Construction companies may also require work permits for foreign employees in addition to BCA licenses. Before the employees may begin working for the company, you must detail the scope of their duties to the Ministry of Manpower (MoM).
Which are the Licenses and Permits In Singapore Needed by a Construction Business?
Construction sector regulations are strict because they directly affect public safety and health. It is crucial to understand that before beginning activities, you must obtain consent from the following authorities:
- Urban Redevelopment Authority of Singapore (URA).
- Singapore Civil Defence Force (SCDF).
- Professional Engineering Services Licence (PESL) from the Professional Engineers Board of Singapore (PEB).
It takes a lot of paperwork and formalities to apply for the PESL. On its website, the PEB publishes detailed application guidelines that cover the needs of each business structure.
For a step-by-step breakdown of the registration process, you should also look at PEB’s online tutorial. You might also get in touch with a corporate service provider to take care of everything.
Once you have overcome these basic obstacles, you can look at other approvals that may be necessary. Below is a list, though it is not all-inclusive:
- Obtaining approval from the Ministry of Manpower (MOM) before hiring any overseas workers.
- The Land Transport Authority (LTA) offers road occupation licenses through its Road Occupation Management Portal (LTA.PROMPT).
- Licenses from the Infocomm Media Development Authority (IMDA) for general radio communication, telecommunication wiring contractors, etc.
- Authorisation from the National Environment Agency (NEA) for scheduled occupation, energy management, trash management, etc.
In addition to these, you must register with the Contractors Registration System (CRS) belonging to the BCA. If you wish to manage building projects for the public sector or take part in tenders, this is a must. For the following, visit the BCA website:
- A Builder Licence for either a General or Specialist.
- The Construction Workforce Registration System (CWRS).
- Permit to Operate (PTO) Systems.
- Outdoor Advertising Sign or Signboard Licence.
- Permit to Erect a Temporary Building.
To receive qualified assistance with obtaining company permits, you can get in touch with a corporate service provider in Singapore.
Step 4: Establish a Corporate Bank Account
Opening a separate bank account for the business allows owners to monitor the money coming in and going out of the account and to keep their personal finances distinct from those of the firm.
When choosing a bank for corporate accounts, keep in mind that accounts used for construction generally have a lot of cash coming in and going out.
As a result, transactions won’t be marked as suspicious due to high cash flow. The majority of large banks, though, are prepared to manage such business transactions.
Step 5: Request for Insurance
Accidents at the job site are a possibility, as they are with the majority of labour-intensive projects. Accidents in the construction industry can be dangerous for both clients and employees, in addition to being expensive.
Accidents on building sites can result in significant damage, which can lead to hefty repair costs. An excellent strategy to support the business in the event of an accident is through insurance.
Many insurance providers provide different kinds of insurance plans designed especially for construction enterprises. For those who work on construction sites and are exposed to the risks present there, insurance coverage is also available.
Construction workers, architects, engineers, and even project managers and interior designers can all benefit from having insurance.
Step 6: Engage Workers
Finally, you can proceed and employ individuals to start construction work. Contractor firms frequently include engineers, architects, electricians, and builders on staff, but numerous building firms also provide design services and hire interior designers to complete the project.
Before allowing workers onto a building site, it is critical to give them the appropriate safety training and tools. This rule applies to all newly hired employees of the business, even those who have previously worked for construction firms.
Step 7: Kick Off Your Construction Business
Then, you may start your company, advertise it to the public, and attract clients for building and remodelling jobs. It is a good idea to brush up on Singapore’s construction laws and regulations since construction companies frequently offer end-to-end services.
What are the Needs for Setting Up a Construction Business In Singapore?
A construction firm in Singapore must abide by certain regulations, unlike the typical company registration process.
First of all, there aren’t many different company structures to choose from. According to the Professional Engineers Act, only the following organisations are eligible for a professional engineering license:
- Limited Liability Partnerships.
- Multi-discipline Partnerships.
- Limited Corporations.
- Unlimited Corporations.
A few “extra” regulations must be followed before opening a construction company in Singapore. These are once more unique to construction firms and will have an impact on the application and approval procedure. As a result, make sure the following is done correctly:
- The majority of the management or directors must be licensed engineers.
- Engineering services are specifically listed as the primary activity in the articles of association.
- You must have the necessary professional liability insurance for your company.
- SGD500,000 is required as the minimum share capital.
What are the Best Ways to Expand Your Construction Business In Singapore?
Although the construction industry requires a lot of work, there are many options to explore your hobbies. For instance, ‘eco-entrepreneurs’ can use green or eco-friendly methods and supplies when working on construction projects. This gives you a great niche and a competitive advantage and helps you stand out from the crowd.
Consider taking on smaller tasks or hiring a subcontractor if you’re just getting started, and ask them for recommendations. By doing this, you’ll be able to learn about the business while staying on a tight budget. Additionally, it will assist you in building a trustworthy network of connections that you can use later. It offers a significant chance to familiarise people with your business and have your brand recognised as a provider, etc.
Consider investing in technology, such as enterprise resource planning (ERP) systems, if you have bigger pockets. You may scale up and strategically expand operations with the aid of additional technological solutions like automation, artificial intelligence, and robotics. Of course, you also need to develop and train your personnel. Work on building a competitive, dependable, and highly skilled workforce right now.
Attend trade shows as often as you can because they offer great chances for networking and information on market trends. You’ll be in good shape if you join a few construction associations and have an active social media presence. By supporting charitable community activities, you may also spread positive energy, raise brand awareness, and give back to the community.
A completely new realm of entrepreneurship is emerging as we transition to new corporate rules and practices. One such option to consider is opening a construction company in Singapore. Indeed, it can be a very promising path for anyone with a passion for the sector.
As previously explained, operating a construction company in Singapore calls for several licenses, permits, and permissions. To hire foreign workers, one must additionally apply for work permits at the Ministry of Manpower (MOM).
In general, it is a good idea to use a professional corporate service provider to manage ongoing administrative tasks, including company registration, taxation, business licenses, and work visas.