What are the risks of doing business in Singapore and How To Overcome From It

Singapore’s reputation as a business-friendly nation is based on its capacity to harness globalization. However, operating a business in this jurisdiction has significant difficulties. Thus hiring local assistance is essential.

Singapore’s reputation as a business-friendly nation is based on its capacity to harness globalization. Due to its numerous resources, crucial in the knowledge economy, Singapore is ranked second in the world by the World Bank for ease of business. Moreover, companies aiming to develop in the Asia Pacific area select it as a destination due to its favourable tax rates and advantageous location.

However, there are specific difficulties in conducting business in Singapore, and the demand from foreign companies is resulting in fierce rivalry and rising business expenses in a squeezed labour market. We will learn how to keep the foundations of your business solid and keep it way from taking a hit in future, by neutraling the risk that omes your way.

Starting a Business

Although starting a business in Singapore is relatively simple, many new enterprises frequently fall victim to regulatory compliance issues, especially when they are foreign-owned. For example, the Accounting and Corporate Regulatory Authority (ACRA) requires new firms to register online using BizFile+, where a name search may be done, and the paperwork for company registration can be finished. To use BizFile+, you will need a SingPass ID, also known as a Singapore Personal Assess Password, for online government transactions.

The Importance of Company Directors

The Companies Act obliges every Singaporean business to have at least one resident director. Therefore, a resident director who neglects to ensure that the annual return is submitted to the Accounting and Corporate Regulatory Authority (ACRA) and that the annual general meeting is convened may be found to be in non-compliance and may get a court summons.

Complying with the Common Reporting Standard

The Common Reporting Standard (CRS) will be implemented in Singapore, and the first exchange will happen by September 2018. New entities will be categorised under CRS for CRS-related reasons. They must also maintain lists of nominated directors and controllers.

Managing Building Permits

This is a tiresome procedure. Eleven permit-related processes in Singapore must be completed before the building begins. Even though the system usually takes less than a month, it is a pain. First, any construction must have the Urban Redevelopment Authority’s approval before starting. Then, once your plans have been accepted, you must wait until you receive technical approval from the Land Transport Authority, the Commissioner for Workplace Safety and Health, and the Central Building Plans Unit of the Ministry of Environment.

Opening a Corporate Bank Account

Companies opening bank accounts in Singapore may expect more significant compliance checks and Know Your Customers (KYC) requirements from the banks due to adopting international information exchange legislation like the Foreign Account Tax Compliance Act (FATCA) and CRS. Depending on their CRS categories, they will be expected to disclose information on the firm’s ultimate beneficial owners and shareholders.

Paying Taxes

The Inland Revenue Authority of Singapore (IRAS) oversees several types of taxes in Singapore and has a territorial tax structure. To use the IRAS or Central Provident Board websites and pay taxes, businesses must sign up for a CorpPass or SingPass. In addition, the “management and substance” examination set forth by the IRAS may be needed for companies wanting a Singapore tax residence certificate.

IP rights protection

Businesses moving to Singapore may run into issues with IP enforcement and protection. For example, companies operating in the United States have expressed concern about the lack of effective deterrent sanctions for end-user software piracy, the limitations of trade secret protection, and the necessity for stricter action against infringing items transshipped through Singapore.

Obtaining Work Passes

A valid working pass is required for foreigners who want to live and work in Singapore. However, the Ministry of Manpower’s labour laws have made getting a working pass more challenging. Therefore, every application is evaluated individually. The preliminary evaluation is based on the applicant’s educational background, professional experience, fitness for the position, and the industry the potential employer serves.

High Operating Costs

Singapore has a comparatively higher cost of doing business than other Southeast Asian nations. The cost of paying local staff is higher due to the strong Singapore dollar. Due to the scarcity of land, rent for commercial or retail spaces is twice as expensive as in adjacent Asian nations.

Labour Shortage

Although Singapore is renowned for having the “World’s Best Professional Workforce,” bringing in labour from other nations can be challenging due to the government’s tight employment restrictions on foreign employees.

Trading Across Borders

Singapore has long served as a hub for international trade and is one of the most cost-competitive areas in the world for cross-border trade. However, it is crucial to remember that some products can only be imported into Singapore with permission from the appropriate government bodies, which may also provide a specific permit. Businesses must also complete an online import permit application and pay applicable taxes or duties when importing.

Culture

A multiethnic nation, Singapore is home to populations of Chinese, Malay, Indian, and Eurasian people. English is the most extensively used language for business and administration out of the four official languages of English, Mandarin, Malay, and Tamil. Remember that there are some gestures and subjects to steer clear of. For example, pointing is considered impolite. Talk about things other than your personal life, politics, and religion. Instead, focus on certain subjects like tourism, architecture, or regional food.

Punctuality is a crucial cultural distinction to take into account. In Singapore, it is considered impolite to keep an executive waiting, although, in the United States, starting a meeting a few minutes late may be fine. Seniority and age are respected as well. Correcting or arguing with an elder or superior openly is impolite, thus refraining from doing so. Research on extra cultural peculiarities to ensure a smooth transition when conducting business in Singapore.

Conclusion

Although you may find it appealing to search for company incorporation services in Singapore as soon as you think of business in the Asia-Pacific area, there are plenty of considerations to keep in mind. These considerations, however, are not compromises and should not deter you from company opening in Singapore. The advantages of doing business in Singapore far outweigh the nominal impedance the micro-nation has up its sleeve.