Starting a Business in Singapore: A Comprehensive Guide for New Business Owners

Starting a Business in Singapore

Embarking on the journey of entrepreneurship in Singapore is both exciting and challenging. The city-state's robust infrastructure, strategic location, and pro-business environment make it an attractive destination for startups. Despite the ease of doing business here in Singapore, establishing a successful business requires meticulous planning, effective execution, and continuous monitoring. This guide provides a detailed roadmap for new business owners, focusing on three critical phases: Planning and Understanding Your Business, Execution, and Monitoring and Coping with Changes.

Planning and Understanding Your Business

All business activities start with a business idea. Having a business plan not only helps owners stay organized but also ensures that they truly understand the nature of their business. This may range from types of business structures, corporate tax rate requirements, government agencies that oversee your industry, or the need for a business license or regulatory compliance.

Having a plan is essentially a feasibility study of the new business, allowing business owners or individual investors to understand the business model, business goal and returns.

a. Research About Your Industry

Before launching your business, it's imperative to conduct thorough research into your chosen industry. Understanding industry norms, best practices, and the competitive landscape will provide insights into operational standards and customer expectations. Recognizing potential risks, such as market saturation or regulatory changes, allows for proactive risk management. Identifying opportunities, such as emerging market trends or technological advancements, can provide avenues for growth.

For instance, the rise of digital transformation has led to increased demand for IT services and solutions. Understanding these trends enables businesses to align their offerings with market needs. Additionally, staying informed about regulatory changes ensures compliance and mitigates potential legal risks.

While "researching about your industry" may seem like a tall order, it can be something straightforward for small businesses. For example, aspiring e-commerce business owners, you may wish to perform research regarding the products you wish to sell, how competitors are pricing their products on the platform, and what the demand is. E-commerce businesses may also wish to focus on product sourcing as this will directly determine your pricing. Understanding your selling platforms (Amazon Singapore, Shopee, Lazada) and your products is also crucial for formulating an effective online sales strategy. Some products are trend-based, and others become obsolete quickly (technological products) and may have various implications for your e-commerce sales.

The information required may vary significantly for a business in a different industry. For example, home-based businesses in the food and beverage (F&B) sector may require a significant effort to understand taste profiles that suit the mass market. They may also need to focus on social media presence, including the possibility of digital marketing and logistics considerations for food delivery. Additional requirements and restrictions may also govern home-based businesses that use their residential address as the registered business address or business premises.

In essence, understanding your industry is the prerequisite for a successful business. While we are unable to list all the details for each industry, our experience in helping SMEs grow through business advisory has allowed us to develop a niche understanding of familiar industries.

b. Partnering: Building Strong Relationships

No business can thrive in isolation. Establishing strong relationships with key business partners—such as customers, suppliers, and advisors—is essential. Customers provide revenue and feedback, suppliers ensure the timely delivery of quality materials, and advisors offer strategic guidance and professional advice.

You may wonder, as a small home-based business, how this is applicable.

Assuming the home-based business is in the service industry, such as digital marketing solutions, building meaningful relationships with your existing clientele is a strategic move. This is especially true if some of your clients have connections with larger companies, and having a good reputation will go a long way in securing them as potential customers.

Most business owners are experts in their field. They may be looking to partner with experienced professionals for compliance and administrative requirements. This may range from hiring a professional firm to assist with business registration processes, maintaining company records (corporate secretary solutions), or seeking bookkeeping advice. Similarly, collaborating with financial advisors may offer expert advice in effective tax planning and financial management.

Singapore's business ecosystem offers various platforms to foster partnerships. Organizations like Enterprise Singapore provide resources and support for SMEs to connect with potential partners and collaborators. Additionally, networking events and industry conferences offer opportunities to build relationships and expand your business network. For small startups, you may also consider exploring startup SG Founder to expand your network. As a business hub, Singapore boasts a robust network of pro-business solutions and partnerships, providing valuable insights for company growth.

c. Financial Planning and Resource Allocation

A well-structured financial plan is the backbone of any successful business. Forecasting revenue, estimating expenses, and setting aside capital for unforeseen circumstances are vital steps. Organizing operational workflows and establishing a clear timeline for business milestones can enhance efficiency and accountability.

Having a good forecast is akin to receiving expert advice. Creating a financial plan can be daunting for business owners, especially if they are unfamiliar with the general requirements of starting a business.

Consider you are starting an F&B Outlet with the target audience being hot-pot lovers. You will be required to understand the capital outlay at the start (rental deposit, kitchen equipment, dining apparatus, and renovation), the monthly cost (Ingredients, salaries, rental, and marketing plans), and the amount of expected revenue. While many of these are merely forecasts, the goal of all financial planning is to ensure that these "forecasted figures" are calculated estimates.

Execution - Putting your Business Plans into Action

Executing your business plan is the start of your business journey. The first step is always to register your business entity. Depending on each business profile and requirements, there are different types of business entities to choose from.

a. Incorporating Your Business

Incorporating your business in Singapore involves registering with the Accounting and Corporate Regulatory Authority (ACRA). Most new businesses opt to register as a Private Limited Company, a separate legal entity that offers limited personal liability protection and certain tax advantages. For a foreign company looking to establish a subsidiary in Singapore, there are various business structures and options for investors to consider. However, depending on the business entity type, additional requirements, such as having a local legal resident as a director, may apply.

Whether you are a foreign investor looking to start a business in Singapore, a local small start-up, or an angel investor looking to start a business here, it is advisable to seek professional advice from a corporate service provider to ensure all legal requirements are met, including the appointment of directors and company secretary.

The incorporation process typically requires a company name, a registered office address, at least one shareholder and one director, and a company secretary. The process of business registration is done through an online application, and most service providers offer competitive packages for incorporation services. Additionally, businesses must maintain statutory company records and comply with annual filing requirements. Engaging with professionals can facilitate this process and ensure compliance with Singapore's corporate governance standards. For foreign companies or local potential business owners who are unfamiliar with the application processes, having a professional firm to assist you is one of the popular choices for business investors.

There may be other post-incorporation processes that are essential, such as setting up a business bank account, setting up a Corppass account for company officers, and licensing applications (depending on your business requirements).

b. Capital Investment

Investing in the right infrastructure is crucial for business operations. This includes securing a suitable premise, purchasing necessary equipment, and acquiring software solutions that enhance productivity. Depending on each industry, certain capital investments may be integral to your business. A well-equipped kitchen for a restaurant, cleaning equipment for a car wash company, or machinery for a manufacturing firm are examples of key capital investments that will have a direct impact on one's business.

Companies may also require additional software investments, such as a time management and payroll system for effective staffing solutions (common in retail shops and retail chains), customer relationship management (CRM) systems for client management and service delivery, or inventory management systems for efficient warehousing solutions. While all these should have already been included in the planning phase, getting it up and operational may take further training and integration.

Singapore's financial institutions offer a range of funding options for startups. Programs like Startup SG provide grants and loans to support business development and innovation. Additionally, platforms like Funding Societies offer peer-to-peer lending opportunities, connecting businesses with potential investors. Exploring these options can provide the necessary capital to kickstart your business operations.

c. Business Development and Marketing

Effective business development and marketing strategies are essential for attracting and retaining customers. Start-up or newly set-up companies usually face an uphill battle when it comes to generating sufficient business revenue. Unless the business has an anchor client, it is essential to consider a strong marketing plan for business development. This involves identifying target markets, crafting compelling value propositions, and utilizing various marketing channels to reach potential clients. In Singapore, digital marketing platforms, such as social media and search engine optimization (SEO), can be leveraged to enhance online visibility. Participating in industry events and networking opportunities can also facilitate business growth and brand recognition.

Building a strong brand identity is crucial in differentiating your business from competitors. Developing a professional website, engaging in content marketing, and utilizing social media platforms can enhance your brand's presence and credibility. Additionally, offering exceptional customer service and soliciting customer feedback can foster customer loyalty and positive word-of-mouth referrals.

For businesses unsure about their marketing direction, professional advice can be useful in understanding the available options. We advise fellow business owners to remain open, speak to multiple marketing business partners, and learn from successful examples.

d. Operational and Quality Control

Establishing efficient operational processes and maintaining high-quality standards are fundamental to business success. This is all the more important for the growth of startups. Implementing standard operating procedures (SOPs) ensures consistency in service delivery and minimizes errors. Regular quality control checks and feedback mechanisms can help identify areas for improvement and enhance customer satisfaction. In regulated industries, adhering to industry-specific standards and obtaining necessary certifications can bolster credibility and trustworthiness.

Investing in employee training and development ensures that your team possesses the necessary skills and knowledge to perform their roles effectively. Additionally, fostering a positive work culture and promoting open communication can enhance employee morale and productivity.

e. Staffing and Employees

Hiring the right people is one of the most crucial components of executing your business vision. In Singapore’s fast-paced, high-standard business environment, your team can be your greatest asset—or a significant liability—depending on how you approach staffing. SMEs, in particular, must balance limited resources with the need to attract, retain, and develop capable employees who can help grow the company sustainably.

i. Understanding Local Employment Laws

Before onboarding employees, it is essential to familiarize yourself with Singapore’s employment laws, primarily governed by the Employment Act. This legislation stipulates minimum terms and working conditions, covering issues such as hours of work, rest days, annual leave, medical benefits, termination requirements, and salary payments.

For companies hiring foreign employees, it’s equally important to comply with Ministry of Manpower (MOM) regulations on work passes, including the Employment Pass, S Pass, and Work Permits. There are quotas and levy requirements for different industries, and hiring decisions should always consider long-term workforce planning to avoid over-reliance on temporary staffing.

ii. Recruitment Strategy and Onboarding

A thoughtful recruitment strategy goes beyond just posting job advertisements. Consider what skillsets are essential to your business success in the first 6–12 months and beyond. Startups often operate with lean teams, so it’s critical to hire individuals who are both technically proficient and adaptable to changing roles.

Some SMEs choose to engage recruitment agencies or freelance HR consultants for initial hiring to streamline the process. Having an experienced HR consultant or a recruiting agency partnering with you may be all it needs to assemble a great team that drives your business forward.

iii. Employees - Building your business

By taking a strategic approach to staffing, SMEs in Singapore can build agile, competent, and committed teams that are aligned with business goals. From compliance and recruitment to engagement and retention, each decision regarding your people strategy can directly influence your long-term success. With the right support structures—whether through digital tools or outsourced HR services—you can manage your workforce efficiently while focusing on what you do best: running and growing your business.

Monitoring and Coping with Changes

a. Continuous Improvement

Adopting a mindset of continuous improvement is vital for staying competitive. Regularly reviewing operational processes, seeking employee feedback, and investing in training and development can lead to enhanced efficiency and innovation. Incorporating customer feedback into product or service offerings can also drive improvements and align offerings with market demands.

For instance, businesses like The Golden Duck have thrived by embracing customer insights and adapting their products accordingly. Starting modestly in 2015 with just salted egg yolk chips produced in a home kitchen, the brand has since expanded to over 3,000 global stores. Co-founder Chris Hwang emphasizes the importance of understanding and defining your target customer, innovating based on customer preferences, and embracing small failures as opportunities for quick rectification and iteration.

b. Financial Monitoring and Analysis

Regularly reviewing financial statements and comparing them with forecasts can help in identifying discrepancies and areas for improvement. Having financial ratios and key performance indicators (KPIs) can provide insights into profitability, liquidity, and operational efficiency. Engaging with financial advisors or accountants can assist in interpreting financial data and making informed decisions.

The basis of having reliable figures begins with a strong finance team. A capable team with adequate software should produce accurate financial records and ensure compliance with the Singapore Financial Reporting Standards (SFRS). Where having an in-house team to manage your accounts is simply not cost-viable, businesses usually consider engaging professional services for accounting and payroll. These services ensure timely corporate income tax filings (including personal income tax for sole proprietorships and partnerships), accurate payroll processing, and adherence to regulatory requirements, allowing business owners to focus on strategic growth.

Certain service providers may offer expert tips and insights for company growth. For example, monitoring cash flow and profit margins can help identify areas where costs can be reduced or where additional investment may be needed. A reputable accounting firm may offer guidance on the advantages and disadvantages of various financing options, such as debt versus equity. A good accounting professional may also single out good-performing segments for expansion consideration or underperforming segments that may require further attention.

Implementing cost-control measures and optimizing pricing strategies can enhance profitability and ensure the sustainability of the business. From expense forecasts and budgets to monthly expense analyses, having accurate financial figures in this aspect allows for good planning.

Establishing accurate and practical expectations for funding requirements, business performance (break-even), and return on investment (ROI) may shed more light on the expectations for shareholders and business owners alike.

Having a strong finance team or service provider will certainly give you the resources to make good business decisions.

c. Adapting to Business Changes

The business landscape is dynamic, and being adaptable is crucial. Monitoring industry trends, technological advancements, and regulatory changes allows businesses to pivot and adjust strategies accordingly. For instance, embracing digital transformation and adopting e-commerce platforms can open new revenue streams and reach a broader customer base. Staying informed and agile ensures long-term sustainability and growth.

Singapore's position as Asia's go-to hub for start-ups is reinforced by its blend of strategic location, supportive government policies, strong legal frameworks, and diverse talent pool. As geopolitical tensions shift and global supply chains realign, Singapore offers a stable and neutral base for companies looking to expand across Asia and beyond. For new business owners, this presents a unique advantage: the ability to grow in a globally connected environment while enjoying local incentives and a pro-enterprise ecosystem.

Entrepreneurs should also remain responsive to macroeconomic trends, such as rising interest rates, inflation, or foreign exchange fluctuations, all of which can impact the cost of doing business. Developing contingency plans and maintaining strong supplier relationships can reduce your vulnerability to such shocks.

Moreover, the ability to adopt and integrate new technologies such as automation, artificial intelligence (AI), or data analytics can create competitive advantages. These innovations enable SMEs to scale efficiently, enhance customer engagement, and make informed, data-driven decisions.

d. Compliance and Regulatory Adherence

Compliance is a cornerstone of sustainable business operations in Singapore. The government maintains strict regulatory standards, and businesses are expected to comply with all statutory requirements from incorporation through dissolution. These obligations include:

• Filing Annual Returns: Every Singapore-incorporated company must file annual returns with ACRA, along with financial statements prepared according to the Singapore Financial Reporting Standards (SFRS). A company secretary typically handles this, and it is common for companies to seek the services of a professional firm for their appointment.

• Corporate Tax Filing: Companies must submit estimated chargeable income (ECI) within three months of the financial year-end and file their tax returns with the Inland Revenue Authority of Singapore (IRAS) annually. The computation of taxable income may be significantly different from business profits.

• Goods and Services Tax (GST): Businesses with annual taxable turnover exceeding S$1 million are required to register for GST. Once registered, businesses must file periodic GST returns and remit the taxes they have collected. Alternatively, some companies may wish to consider voluntary registration.

• CPF Contributions and Payroll Reporting: Companies must comply with employment laws, including paying mandatory CPF contributions for local employees, issuing itemized payslips, and adhering to Singapore’s Employment Act.

Failing to fulfill these obligations can result in penalties, disqualification of directors, or even legal action. That’s why it’s prudent to engage qualified professionals or corporate service providers to manage compliance responsibilities on your behalf. Having such a business partner may be beneficial for new businesses as they are likely to provide guidance and business advice while ensuring deadlines are met.

For SMEs, in particular, outsourcing regulatory and compliance tasks is not just a matter of convenience—it’s often a necessity. It frees up internal resources, reduces the risk of non-compliance, and allows entrepreneurs to concentrate on growth and innovation.

Final Thoughts - The Journey of Entrepreneurship

Starting a business in Singapore is a challenging yet rewarding endeavor. From the moment you conceptualize your idea to the stages of execution and long-term operational management, each step requires strategy, discipline, and adaptability. The business environment in Singapore offers numerous advantages, including clear legal frameworks, global connectivity, access to talent, and a well-developed financial ecosystem. Yet, these benefits are fully realized only when entrepreneurs make informed decisions, plan meticulously, and engage with the right partners.

Let’s recap the essentials:

• Plan Thoroughly: Understand your industry, build strategic partnerships, and develop robust financial and operational plans. Use this phase to validate your business concept and assess the competitive environment.

• Execute Precisely: Register your company properly, invest in infrastructure and personnel, build your brand, and establish quality operational systems. Take the time to implement best practices that align with your long-term goals.

• Monitor and Evolve: Constantly review your performance, manage your finances proactively, remain open to change, and meet all legal and tax obligations. Business is not static, and the ability to pivot or scale appropriately is what distinguishes enduring enterprises from the rest.

Finally, never underestimate the value of professional support. Whether it’s compliance, payroll, accounting, tax, or HR, working with a reliable business services provider ensures that your foundational functions are handled accurately and efficiently. For SMEs, this partnership can be transformative, contributing directly to smoother operations, enhanced credibility, and informed strategic decision-making.

By committing to strong business fundamentals and leveraging Singapore’s conducive ecosystem, you’ll be well-positioned not only to start but to thrive and grow in one of the world’s most competitive business hubs.

How we can help your Business

At OakTree Accounting and Corporate Solutions, we provide solutions for business owners at every stage. We offer:

Business Advisory and Planning for SME: For potential business owners to evaluate the cost, the requirements, and key financial figures for the businesses. This includes statutory requirements, licensing, and other estimated expenses.

Incorporation & Corporate Secretary: Assist business owners, including foreign investors and foreign companies, to set up a company in Singapore. Corporate Secretary services include resolution management, annual returns filing and statutory compliance.

Accounting & Bookkeeping: Provide timely accounting and financial records for business owners, including deciphering key financial figures to facilitate business decisions.

Taxation: Manage tax computation and filing, tax advisory and planning to ensure businesses comply with tax regulations.

HR and Payroll Support: Provide Key HR support, including HR outsourcing and payroll computation, to manage your employees effectively. As solution providers, we aim to streamline HR processes, thereby freeing up business resources.

Recruitment and Staffing: Through our trusted partner, recruitment solutions may be essential, especially if the company relies heavily on the skill sets of its employees. Partner with us to enhance your pool of talents!

DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily represent the views and opinions of any individuals or organizations with which the author may be affiliated, either in a professional or personal capacity, unless explicitly stated.