Singapore is considered amongst the top 5 countries in Asia to start a company or open a subsidiary company by foreign entrepreneurs. With the recent political instability in Hong Kong, the next best place for foreign entrepreneurs, Singapore is becoming even more popular. A lot of companies are moving out of Hong Kong and considering moving to Singapore as it offers good political and economic stability, as well as great tax benefits.
If you are one of those who are looking to make your move to Singapore, HeySara has got you covered. In this article, we would try to address all your queries on how do you get going with your move from Hong Kong to Singapore.
Why should you move to Singapore?
A lot of MNCs have their Asian headquarters based in Singapore. It is also considered the hub for startups. So what makes companies choose Singapore over other Asian countries? The reasons are aplenty:
- Great market reach
- Huge talent pool – local as well as foreign
- Economic and political stability
- Almost no bureaucracy and corruption
- Low corporate tax rates
- 100% foreign-owned companies
- Fast and easy process to register a business
- The digitalized process to incorporate a company and meet statutory requirements
- Sound banking system
What kind of business entities can you set up in Singapore?
In Singapore you can mainly set four types of business entities:
- Sole-Proprietorship or Partnership
As the name suggests, Sole-Proprietor is a business owned by one person only while Partnership is a business owned by 2 people or more but should not exceed 20 partners.
- Limited Partnership (LP)
A Limited Partnership is a company owned by 2 or more partners (no maximum limit) with at least one general partner and one limited partner.
- Limited Liability Partnership (LLP)
Limited Liability Partnership is owned by 2 or more partners (no maximum limit) where the partner’s liability is generally limited as the company is treated as a separate legal entity.
A company is a business form that has a separate legal entity from its shareholders and directors. Any business with more than 20 partners needs to be incorporated as a Company under the Companies Act. They can be further classified as Exempt Private Company, Private Limited Company, and Public Company based on the number of members.
To know more about each type of business structure and compare them, you can refer to the ACRA website.
What are the requirements for starting a business in Singapore?
In Singapore, foreigners generally opt to form a Private Limited Company over other business structures. To start a Private limited company you would need to meet the following requirements:
- A registered Singapore address
- A unique company name
- Minimum of 1 resident director
- Minimum of 1 shareholder
- Minimum paid-up capital of 1 SGD
- Local corporate secretary
Once you have all these requirements in place, you can submit your application via BizFile+ to register your company. As a foreigner, you would need to appoint an authorized filing agent (e.g. a law firm, accounting firm, or corporate secretarial firm) to submit the online application on your behalf.
How long does it take to register a company?
If you have all your documents in place, your company can be registered within a day. However, if some additional approvals are required from any other government agency, the registration could take anything between 14 days to 60 days.
How can you move to Singapore after incorporating a business?
If you would like to move to Singapore after incorporating your company, you would need a work visa to work here. You can either apply for an EntrePass or an Employment Pass (EP) which would have to be applied by your company on your behalf. To compare and learn which pass you are eligible to apply for, read this guide here. If you would like to move with your family, your company would have to apply for a Dependant’s Pass (DP) for them.
For a more in-depth guide on how to move to Singapore, click here.
How much corporate tax would you need to pay in Singapore?
In Singapore all the companies local as well as foreign pay a flat tax rate of 17% on their chargeable income. Once you move to Singapore, you would need to pay taxes for all income gained in Singapore to the Singapore Government while all income gained in Hong Kong will be taxed by the Hong Kong government.
What factors should you consider before relocating from Hong Kong to Singapore?
Now that you are all set to set up your business in Singapore, you should also consider the following factors that would help you assess and plan on how you would run your business:
- Staff: Human resource is one of the most important factors that one needs to consider while relocating as you don’t want to lose your best and loyal employees in the bargain. Discuss and make necessary arrangements to relocate your employees or work out an alternative plan to retain them. You would also make a plan on how would you hire more resources, if required, in Singapore.
- Banking: As you already have a running business in Hong Kong, you would also have a corporate bank account with a bank there. Chalk out a plan with your bank to see how you can transfer all your banking assets to Singapore hassle-free as well as continue to have uninterrupted banking transactions during the move. Read this guide on how you can open a corporate bank account in Singapore.
- Clients: The success of a business is highly dependent on its client relationship. Even though you are moving base, you don’t want your clients to feel there would be any change in the quality of your service. Reassure them by taking them through the new business model and processes well in advance.
- Vendors: Every business engages with vendors that are cost-effective in terms of the products and services offered as well as logistics. There might be some changes to the logistics cost after you move to Singapore. Get your vendors onboard by sharing with them your new business model and re-evaluate the cost of supplies. You might have to consider collaborating with new vendors and suppliers to enjoy some cost benefits of moving to Singapore.
- Assets: Evaluate your tangible and intangible assets to assess what all can you relocate to Singapore and how. If you have equipment and machinery, you would also have to see if it is economical to bring them along or buy new ones in Singapore. Also, you need to figure out how to move your intangible assets like Intellectual Property (IP) and craftsmanship.
- Contracts: All your ongoing contracts would need to be re-negotiated as per the Singapore legal terms once you move to Singapore.
- Office: To register a company and operate out of Singapore you would need a business address. Depending on the number of employees, the kind of products and services you offer, the equipment required, and the budget you would need to identify a space that would meet all your requirements.
Moving your business from Hong Kong to Singapore might seem like a lot of work but in fact, it’s quite simple and straightforward.
We at HeySara strive to make this process seamless for our clients. We will take charge of the whole process from incorporating your business to taking care of all the other legal requirements for you to start operating from day one. We also provide services like recruitment support, applying for work-passes, and providing co-working spaces. Reach out to us for a smooth move from Hong Kong to Singapore.
1. Do I need to be physically present to register a company in Singapore?
No, you don’t need to be physically present to register a company in Singapore as the whole process is digitalized. You can be anywhere in the world to incorporate and run your business that is based in Singapore.
READ: When Tradition Meets Digital – Introducing the New Generation of Digital Corporate Secretarial and Accounting Firms
2. Can a foreigner be a director of the company they incorporated?
Yes, a foreigner can be a director of the company they incorporate in Singapore but they need to appoint at least 1 resident director if they don’t plan to relocate to Singapore. An Employment Pass holder (EP) can also become a director of another company provided they have the required approvals from MOM.
If you do not have a candidate to fulfill the necessary requirement of 1 resident director, you can hire the service of a nominee director.
3. Can I, a foreigner, register my company with ACRA on my own?
No, you would have to engage a local registered filing agent – a law firm, accounting firm, or corporate secretarial firm, to register your company in Singapore.
4. What are government fees to register a company in Singapore?
The government fee charged by ACRA to register a company in Singapore is SGD 315 including SGD 15 for company name registration.
5. Is there a minimum salary I need to earn to get an Employment Pass in Singapore?
Yes, to apply for an Employment Pass (EP) you need to earn at least $4,500 a month and have acceptable qualifications. If you plan to move with your family you should earn at least $6000 per month to apply for a Dependant’s Pass (DP) for your family.