Starting a business in Singapore is relatively simple and straightforward. The only complex and critical part for many aspiring entrepreneurs is identifying the types of licenses and permits you require to start a retail business.
Singapore is probably one of the best places in Asia to launch a retail business, as it is one of the most vibrant lifestyle hubs in the region. Furthermore, Singapore is an attractive location for businesses because not only does it have a well-educated workforce, but it also has a low corporate tax rate (17%), as well as a variety of other attractive tax schemes and incentives.
Corporate tax on foreign-sourced dividends, branch profits and service income remitted back to Singapore can be minimised, if not entirely absolved, when certain conditions are met. Singapore has one of the broadest and most exhaustive taxation networks in the world, having signed more than 80 double-tax treaties.
Retail Sector in Singapore
Singapore’s thriving retail sector, charged by the fast growth in tourism, contributes to a significant portion of Singapore’s Gross Domestic Product (GDP). The city-state is located in close proximity to major markets such as China and India, and this provides businesses with access to a large consumer base. In addition, what makes Singapore such an attractive location is that it has a strong infrastructure that supports retail businesses, and this makes it easy for companies to set up shop here!
In Singapore, a retail outlet is defined as a shop or store where business owners can sell their products or services at a specific price directly to the public consumer. When it comes to deciding on what type of product(s) you would like to sell, the retail market has a variety of options available to you, such as speciality retail, work, home, lifestyle, entertainment, communications, food and beverage, supermarkets, bookshops, and so much more.
Starting a Retail Business in Singapore
You need to determine what will work best for you by doing proper research on the market for your specific product or service, identifying and determining your competition in the market, and judging the viability of your product or service when sold at the best possible price, thus giving yourself a competitive edge over and above your competitors. Think about what will make you, your brand and your product or service unique in order to stand out from the rest!
For example, if you have a passion for textiles, design and clothing, then you could open a clothing retail business, where you source, create, manufacture or buy clothing items to sell directly to the consumer. If you are selling goods or items at a price that a customer must pay to obtain them, then you will be classified as a retail business owner.
It has been found that the top three most profitable businesses to start in Singapore are either in education, social media management and web design, but the industry with the highest growth rate (4.4%) in 2022 is Singapore’s manufacturing industry, specifically for the development of biomedical manufacturing, electronics and precision engineering clusters. Having said this, the cost of doing business in Singapore can be high, and this needs to be taken into account when planning your budget.
According to research, company registration in Singapore costs amount to approximately US$1,940 in the first year, and annual company costs from the second year onwards amount to approximately US$600. On average, the start-up costs for setting up a business amount to roughly US$12,200, although this largely depends on the nature, type and size of the retail business chosen.
Also, remember that you will need to find a suitable and appropriate location for your store, and this should be based on factors such as population density, demand, competition and rental. Lastly, you need to develop a specific marketing strategy that will help promote your store, product or service and attract customers.
When starting a retail business, you will be required to go through a business registration process and obtain the necessary licenses and permits so that you can commence business and make your dreams come true. This is a relatively simple process, and it can easily be done by yourself. It is important to remember that you must be a Singaporean or a Permanent resident. A pertinent requirement to starting your retail business is that you must first be registered with the Accounting and Corporate Regulatory Authority (ACRA).
The nature and type of retail business you choose to start will determine which licenses, permits, and approvals you will require from the various authorities. It may certainly sound complicated, but rest assured, it’s much easier than you may think.
There are many different Singapore entity types, such as Tax resident LLC, Legally tax exempt LLC, free zone company, Subsidiary LLC, Holding company LLC, PLC company and many more.
However, the type of business entity most commonly registered in Singapore is the private limited liability company. This type of business is where the company is a completely separate legal entity. This not only ensures protection for shareholders from any company debts beyond the amount of capital they have paid up but also provides the most efficient tax structure. Anyone over the age of 18 can register a company in Singapore, and the rules and regulations are stipulated in the Singapore Companies Act.
The Business Registration Process
The first step is registering your business with ACRA. There are specific documents required, and by using your SingPass ID, you can go online and log in to BizFile+ to provide all the necessary details. This process is usually completed within 24 hours, and if you are doing it yourself, the company registration cost charged by ACRA is S$315. You will need to draft and notarise your company’s Articles of Association and file them with ACRA. You will also be required to input all the details and particulars of the directors and/or shareholders of the company. If you are unsure about how to compile these documents for ACRA, it is advisable to contact a reputable accounting firm or specialised service provider, who may be able to assist you with the process and provide more information regarding it.
In addition, your new retail business will be required to obtain approval from the Urban Redevelopment Authority (URA) and meet fire safety requirements, along with procuring a Fire Safety Certificate from the Singapore Civil Defence Force (SCDF).
Required Licenses and Permits
The licenses and permits you need for your business will largely depend on what you intend to sell. This is particularly important if your business has anything to do with health and safety. For example, if you want to start a supermarket business, you will need a Supermarket License as specified by the Environmental Public Health Act. You will also have to abide by the guidelines for cleanliness, food safety, and the prevention of food-related diseases.
If you are wanting to start a liquor retail business, you will be required to obtain a Liquor License from the Liquors Licensing Board. Another example of a large market for business is the cosmetics business. The Health Sciences Authority (HSA) must be notified via its PRISM website before putting any new product on the market. However, you are exempted from getting a license to import and sell cosmetics products in Singapore due to the ASEAN Cosmetic Directive.
The list of licenses required for a specific business can be an exhaustive one and may include licenses such as copyright licenses, wide-area private network licenses, and non-residential TV licenses. The non-residential TV license is applicable if your retail outlet is going to have a TV in it. Again, if you are ever unsure as to what type of license and/or permit(s) you require, it is recommended to appoint a corporate service provider who can offer further information on licensing requirements.
Registering any business in Singapore can be simple as long as you follow the process. The process can be delayed if you are unclear on what to do or miss out on applying for the right licenses. However, to help you stay on your plan of opening a retail business, you should engage a company incorporation consultant.
A company incorporation agency will not only help you register your company but also get the relevant licenses for you. While they manage all the paperwork for you, you can put all your energy into planning and managing your company’s operations.