Starting a Business in Singapore: 10 Critical Factors to Know in 2025

Singapore’s thriving economy, strategic location, and pro-business policies make it a top choice for global entrepreneurs. Yet, navigating local compliance and setup complexities can determine your venture’s success. Discover 10 must-know factors for starting a business in Singapore—and how partnering with corporate experts ensures seamless compliance.

1. Choose the Right Business Structure

Selecting the optimal legal structure impacts liability, taxes, and scalability. Key options include:

• Private Limited Company (Pte Ltd): Offers limited liability protection, tax benefits (e.g., Start-Up Tax Exemption), and credibility for investors. Requires at least one resident director and SGD 1 paid-up capital.
• Sole Proprietorship: Simple setup but risks unlimited personal liability. Only available to Singapore citizens/PRs.
• Partnership/LLP: Shares liability among partners or offers limited liability for specific roles.

Tip: For foreign entrepreneurs, a Pte Ltd with a nominee director is ideal for compliance and scalability.

2. Understand Legal and Registration Requirements

• ACRA Registration: Mandatory for all businesses. Foreigners must use a registered filing agent (e.g., Vero) since direct registration via BizFile+ requires SingPass.
• Licenses and Permits: Industry-specific approvals (e.g., F&B, fintech) are required. Use GoBusiness Licensing Portal to verify needs.
• Company Secretary: Appoint one within six months of incorporation to handle statutory filings.

3. Budget for Setup and Operational Costs

• Initial Costs: SGD 315–SGD 2,500+ (ACRA fees, licenses).
• Ongoing Costs: Annual compliance: SGD 3,000–SGD 12,000 (tax filings, secretary fees). GST registration: Mandatory if revenue exceeds SGD 1 million.
  Pro Tip: Use virtual offices (SGD 50/month) to reduce overheads.

4. Secure Funding and Grants

• Government Schemes: SPRING Singapore offers grants like the Enterprise Development Grant (up to SGD 1 million) for innovation and scaling.
• Investor Networks: Platforms like BANSEA and ACE connect startups with angel investors.
• Self-Funding: Minimum SGD 1 paid-up capital, but higher amounts boost credibility.

5. Navigate Tax Obligations

• Corporate Tax: Flat 17%, with exemptions for startups (75% off first SGD 100,000).
• Double Taxation Avoidance (DTA): Singapore’s 80+ DTAs prevent dual taxation on foreign income.
• GST: 9% rate applies to revenue over SGD 1 million.

6. Foreigner-Specific Considerations

• Resident Director: Mandatory for Pte Ltd registration. Use nominee director services (SGD 5,000+/year) if based overseas.
• EntrePass: Apply for this visa if relocating to manage your business.
• Banking: Remote account opening is possible, but some banks require in-person visits.

7. Prioritize Market Research

• Local Consumer Behavior: Attend trade shows and use tools like GoBusiness’s e-Adviser to analyze trends.
• Competitor Analysis: Study pricing, marketing strategies, and gaps in sectors like e-commerce or fintech.

8. Build a Compliance-Ready Team

• Hiring Locals: CPF contributions (17% of salary) are mandatory for Singaporean employees.
• Foreign Talent: Apply for Employment Pass (EP) or S Pass for skilled hires.
• Outsourcing: Use third-party services for roles like accounting or IT to save costs.

9. Leverage Technology and Infrastructure

• Digital Tools: Adopt cloud accounting (e.g., Xero) and project management software for efficiency.
• Smart Nation Initiatives: Access grants for AI adoption or digital transformation.
• E-Commerce: Platforms like Shopee or Lazada simplify market entry.

10. Plan for Long-Term Compliance

• Annual Filings: Submit financial statements to ACRA and hold AGMs within deadlines.
• CPF and Payroll: Ensure timely contributions to avoid penalties (up to SGD 5,000).
• License Renewals: Track expiry dates for industry-specific permits.

Bonus Section: Secrets They Don’t Tell You When Starting a Business in Singapore

1. Nominee Director Risks: Cheap nominee services may lack transparency. Always verify credentials and contracts to avoid fraud.
2. Hidden Banking Fees: Some banks charge high fees for low balances or international transfers. Compare options like DBS, OCBC, and UOB.
3. GST Timing: Registering for GST too early can increase compliance costs. Wait until your revenue nears SGD 1 million.
4. Local Partnerships: Collaborating with Singaporean businesses can improve market access and credibility.
5. Government Grants: Many entrepreneurs miss out on grants like the Productivity Solutions Grant (PSG) or Market Readiness Assistance (MRA). Stay updated on eligibility.
6. Cultural Nuances: Understanding local business etiquette (e.g., punctuality, hierarchy) can strengthen relationships with clients and partners.
7. Digital Presence: A strong online presence (website, social media) is crucial for attracting local and international customers.

Still Wanting to Start a Business in Singapore

Starting a business in Singapore demands strategic planning, from structuring your entity to mastering compliance. By addressing these 10 factors and leveraging insider tips, you’ll build a resilient foundation for growth.

Need Help? Partner with Vero, Singapore’s trusted corporate service provider, for end-to-end support in registration, tax optimization, and compliance. Explore Vero’s services to launch your venture confidently.