Singapore is a business-friendly country that attracts small and medium-sized enterprises (SMEs) from all over the world. Here are some important things to consider when starting an ecommerce business in Singapore.
Time to read: 6 minutes
In general, Singapore has a friendly approach to international trade. Companies, even small ones, generally have no problem establishing themselves and domestic consumers are usually open to products manufactured abroad.
That said, it's a good idea to familiarize yourself with some of the important trading laws in Singapore before entering the market.
We will answer the most important question at the beginning of this article: why choose Singapore? Then we dive into Singapore's surprising trade barriers. We end with a practical overview of what it takes to make a mark in the physical or online marketplace, including international currency transfer options.
- Why choose Singapore?
- Trade Barriers and Regulations in Singapore
- Set up shop in Singapore
Why choose Singapore?
In a literal world of opportunity, why would companies choose Singapore as their destination for expansion? The answer lies primarily in Singapore's reputation as an accessible business center.
A sovereign island city-state, Singapore is located at the southernmost tip of the Malacca Peninsula in Southeast Asia. It is a free port, a free trade zone: companies generally pay low taxes to stimulate economic activity. The working language is English, so communication is easy. This city-state's skilled workforce makes it an obvious choice for the most demanding manufacturing companies.
Let's take a look at some of the top reasons why businesses love Singapore.
Advantage 1: Low taxes
First,Singapore operates under a territorial tax system, which means income from Singaporean sources is taxed. In addition, companies are required to register for the Goods and Services Tax (GST) if their taxable turnover exceeds SGD 1 million per year. GST is a value added tax levied on the supply of goods and services in Singapore, andcurrent rate is 8%.
In addition to GST, Singapore also has a corporate income tax (CIT) system, where companies are taxed on income earned in Singapore. Hethe current VAT rate is 17%, usually lower than in the United States. Singapore also offers various tax credits and benefits to businesses, including tax credits for start-ups, partial tax credits for small and medium-sized enterprises, and tax credits for industries. .
If you are a US citizen and have a business in Singapore, please note that you still need to comply with US tax laws. This means that you must declare your foreign income and assets on your tax return to the Tax and Customs Administration. The good news is that there is a tax treaty between the US and Singapore to avoid double taxation. So, depending on the circumstances, youcan claim foreign tax creditsto offset your US tax liabilities.
But as always, it's worth consulting a tax professional familiar with US and Singaporean tax laws to make sure you're complying with all applicable rules.
Advantage 2: booming economy
Global praise for Singapore abounds in the business world. According toGlobal Talent Competitive Index (GTCI) 2022Singapore is the second most competitive country in terms of talent. In 2022, the World Bank also ranked Singaporethird on his listone of the best countries to do business.
Singapore's economy is not just growing, it's thriving. Finance, trade and manufacturing make up a large part of its economic activities, and government initiatives for businesses (especially, as we mentioned earlier, for small businesses) are designed to encourage foreign investment.
Advantage 3: trained personnel
Singapore has a low unemployment ratejskilled workforce;people are very polite, and most people benefit from access to quality higher education institutions. In general, students graduate from universities and enter the world of work with excellent qualifications.
Foreign companies in the biomedical sciences, logistics, chemistry, electronics and transport engineering sectors benefit greatly from opening stores in Singapore. It is relatively easy to obtainSingapore Entrepreneur Visa (EntrePass). You must ensure that you meet the relevant criteria, can demonstrate that you own at least 30% of the shares in your company, have received funding and have an innovative company that can create jobs.
Trade Barriers and Regulations in Singapore
As a free port, Singapore is not known for its strict trade rules, but for the ones thatrobimay seem unusual, at least at first glance. Here are some of the more interesting constraints companies face when they expand to Singapore.
in Singaporea multi-level licensing system for motorcyclistsbased on engine power. Road tax on motorcycles in the country is also based on engine power. Result? Engine manufacturers sometimes struggle to expand in the region due to the lack of demand for high-performance engines.
Alcohol rates in Singapore are generally higher than in the USSingapore, tax charges depend on the type of alcoholtoo much alcohol per litre.
What is the US-Singapore Free Trade Agreement?
OpUnited States-Singapore Free Trade Agreement (USSFTA)came into effect in 2004 and removed tariffs and other trade restrictions between the United States and Singapore. The agreement covers several sectors, including telecommunications, information technology and financial services.
In addition to protecting intellectual property rights, it has the resources to enforce labor and environmental laws. With the implementation of the USSFTA, there has been an increase in investment and trade between the United States and Singapore. Americanexports to Singapore increased by 13.3%only in the last year.
Started an e-commerce business in Singapore
Setting up an ecommerce business in Singapore is simple and easyusually lasts one to three days. US companies can register atOffice of Accounting and Business Regulations(ACRA) and receiveunique entity number(UN). From there, they can set up a website and start selling products.
However, businesses should be aware of some important laws that apply to e-commerce. For example, companies must comply with laws in Singapore.Personal Data Protection Act (UODO)and obtain customers' consent before collecting and using their personal information. Companies must also comply with thisElectronic Transactions Act (ETA)and issue electronic receipts and invoices.
Lazada and LazMall: Online marketplaces in Singapore
Small businesses looking to sell online to consumers in Singapore usually set up profiles on Lazada. Foreign SME owners with successful LazGlobal trading accounts can apply for LazMall accounts after six months.
Here is a detailed description of how to set up a LazGlobal Seller Lazada account on the marketplace:
- Setting up a company in Singapore:Before you do anything else, set up a branch in Singapore and make a logistics and shipping plan.
- Create an account with Lazad: Go to the Lazada websiteand create a new LazGlobal reseller account.
- Provide all required documents:To open a LazGlobal Merchant Account, you must provide valid proof of identity, company VAT number, proof of your business address, proof of business registration and other documents.
- Create your Lazada store:Once your account is approved, you can create a Lazada storefront and upload it with your products.
- Consider Hong Kong compliance:You can ship products directly to consumers who shop at your store or store them at the Lazada distribution center in Hong Kong. If you choose the second option, Lazada will fulfill your requests (for a fee).
- Link a direct debit account:To recover funds from your Lazada account, you must link a collection account:AderFor example, an account is easy to create and there are no subscription costs or a minimum deposit.
withdraw money from singapore
Ready to expand to Singapore? In this case, you will almost certainly have to move money in and out of the country. Currency transfer options include:
- Banks on the main street:Until recently, traditional bank transfers were the most accessible currency transfer partners for businesses. Unfortunately, bank charges can be expensive and SWIFT slow, especially between the US and Southeast Asia.
- Companies that need:Digital currency transfer partners like Zyla can transfer funds quickly and offer an alternative to face-to-face banking.
At first glance, traditional bank transfers seem reassuringly simple. But the costs can quickly add up and affect your profit margins. To preserve as much capital as possible, many business owners choose trusted payment partners before expanding internationally.
Expansion to Southeast Asia with Zyla
If you have been successful in the United States, you may decide to expand abroad. Singapore is an excellent destination for US business expansion because it has a dynamic economy, a favorable attitude towards international trade and an open consumer base.
Entering a new market requires practical planning. Before you start trading with wholesalers or opening new accounts on the exchange, think about how you are going to move your money between Singapore and the United States.
The Zyla account is an easy way to pay trading partners and receive payments from the markets quickly.
- Open multi-currency accounts with local account information
- Make fast and secure global payments to suppliers, employees and partners
- Collect money from sales in the market
- Keep costs low with competitive rates
Zyla's free account allows businesses to collect and pay internationally, giving you the freedom to do business anywhere, all with the security of our online platform.Open an account today and you can be approved, set up and trading internationally within 24 hours.To start or find out by calling(855) 797-3366Hallo.
- Determine your home business scheme. Understand scheme's provisions and guidelines. Find out industry-specific guidelines. Learn about taxes and government assistance. ...
- Choose a business structure. Choose a business address. Reserve your business name. ...
- Hire employees. Using commercial space. Get licences and permits.
- Before you start. Who must register with ACRA. Choosing a business structure. Reserving a business name. ...
- Register your business. Starting a sole proprietorship/partnership. Setting up a local company. Registering a limited partnership. ...
- Other Useful Information. List of referral authorities. Corppass, licences, taxation etc.
- Planning Permission/Change of Use approval. ...
- A copy of Applicant's NRIC. ...
- A copy of ACRA registered Company Business Profile. ...
- Letter of authorization (if filer option is selected) ...
- Layout plan of the premises. ...
- Floor plan (location plan) ...
- Tenancy Agreement/ Letter of consent. ...
- Pest Control Contract.
Business Plan and Capital
The Accounting and Corporate Regulatory Authority requires a minimum capital S$1 to start a business in Singapore, which is a convenient requirement for many entrepreneurs. After company registration, comes the much more difficult part of getting the business up and running.
Foreigners can register a company without immigrating to Singapore. They need to appoint a local director at the time. Afterwards, they can go back and direct their company from their native country. If they want to form their Singapore company and work as its local (resident) director, they need to immigrate.Do small businesses need to register in Singapore? ›
If you want to a Name for your business, you will need to register it as a sole proprietorship or a private limited company with ACRA, the Company Registrar of Singapore.Do you need a license to sell things in Singapore? ›
Retail businesses will need a business license, depending on the goods and services they provide, and the type of goods and services being sold. Your business is considered retail when you sell merchandise and goods directly to consumers.Can foreigners buy commercial shophouses in Singapore? ›
#1: Eligibility. Singaporeans and Permanent Residents are eligible to buy residential shophouses, while interested foreigners will need to get approval from the Land Dealings Approval Unit (LDAU) to acquire the property for residential use.Can I open store in Singapore? ›
Foreigners who intend to relocate to Singapore and to set up a retail business can either set up a Private Limited Company and apply for an employment pass or apply for an EntrePass and set up the Private Limited Company or designate a Local Nominee Director (where the foreigner does not plan to relocate to Singapore).Can I start small business in Singapore? ›
Anyone can open a Singapore business, be it a foreigner or a local. This is according to the Singapore Companies Act. You just need a local registered address, a corporate secretary, a shareholder, and a resident director. You'll also need a paid-up capital of at least $1.
Home-based Food Business and Food Safety
While HBFBs are not licensed, they are still subject to the Environmental Public Health Act (EPHA) and the Sale of Food Act (SOFA)* and are required to ensure that the food they sell is prepared in a manner that is safe for consumption.
Yes, foreigners can open a restaurant in Singapore, but they must comply with regulations, obtain necessary licences and permits and meet the requirement of company incorporation set out by ACRA such as having at least one local director.How much does a business license cost in Singapore? ›
Company Incorporation: As soon as your business name is approved, you can proceed to apply for company incorporation. Although there are varying rates for different types of applications, the standard registration fee in Singapore is S$300.Is Singapore tax free for business? ›
The standard corporate tax rate in Singapore is 17%. A partial tax exemption is eligible for first SGD 300,000 of chargeable income. Under this condition, 75% of the first SGD 10,000 of chargeable income is tax exempt and 50% of the next SGD 290,000 of chargeable income is tax exempt.What is considered small business in Singapore? ›
There are two main criteria to be considered a SME in Singapore: Registered or incorporated in Singapore. Employment size of not more than 200 or with annual sales turnover of not more than $100 million.How can foreigners do business in Singapore? ›
- Relocate to Singapore and apply with Employment Pass.
- Relocate to Singapore and apply with EntrePass.
- Run Singapore company from anywhere in the world by appointing a resident nominee director.
Can a foreigner register a sole proprietorship? Foreigners who are residing overseas and want to register either a sole proprietorship or a partnership must appoint at least one locally resident authorised representative (e.g. Singapore citizens, Permanent residents or holders of EntrePass/ Employment Pass).Is Singapore the easiest place to do business? ›
Singapore has retained its position as the best business environment over the next five years, according to EIU's latest business environment rankings for the second quarter of 2023. Canada and Denmark, with tied scores, follow closely behind, largely supported by strong levels of economic and political stability.Is it illegal to resell items in Singapore? ›
Generally, there is no prohibition against the resale of goods and services, including concerts and sports events tickets, subject to the terms and conditions of the original seller.How long does it take to get a business license in Singapore? ›
Listed below are some of the industry-specific licenses that must be obtained in order to run a particular business in Singapore. In general, it may take 2 weeks to 2 months for a business license or permit to be fully processed.
It is mandatory for companies in Singapore to employ a qualified company secretary within 6 months of incorporation. The secretary must be a resident of Singapore. Every new business registered in Singapore must have a local address. This cannot be a PO Box number.Can Americans buy property in Singapore? ›
The foreigner applicant must have an adequate economic contribution to Singapore. Interested foreigners may apply through the Singapore Land Authority. There are no restrictions for foreigners who want to buy commercial properties in Singapore.Can you live in commercial property Singapore? ›
Unlike a residential property where you can reside and live in, a commercial property is a building mainly for business purposes or work. For the property owner, it is used to generate profit, either through rental income or capital gains.What is a Singapore shop house? ›
Shophouses—a historical source of delight and nostalgia—are a prevalent building type in Singapore's architectural and built heritage. These buildings are generally two- to three- storeys high, built in contiguous blocks with common party walls.Can I run a business from my home in Singapore? ›
Residents may carry out small scale home-based business activities without requiring URA's approval. The premises must still remain as a residential dwelling and you are reminded to be considerate of your neighbours.Do you need a permit to sell things on the street in Singapore? ›
On the streets
In order to sell things in public places, and yes, that includes tissue, you need a licence under the Street Hawking Scheme. The licence costs $120 and will confine you to a certain spot. That means you can't walk around or sell in multiple areas.
Is Hard Selling an Offence in Singapore? While hard selling is by itself not an offence, persons may still be sued for hard selling and/or be penalised for related offences. For one, hard selling is considered an “unfair practice” under the Consumer Protection (Fair Trading) Act (CPFTA).Is Singapore easy to start a business? ›
Fast & simple incorporation. As one of the world's most bureaucracy-free markets, it's possible to open a company in Singapore with a minimum of one shareholder, one director, one local company secretary, a local address, and a share capital of just $1.Do I need a business license in Singapore? ›
The nature of your retail business will determine the licenses, permits, and approvals you need from various authorities. Retail stores such as supermarkets, pharmacies, pet shops, and telecommunication stores must apply for a business license.Do I need a visa for business in Singapore? ›
US Passport Holders (regular, official and diplomatic) do not require a visa to enter Singapore for business or for social visit purposes.
Singapore was listed by The World Bank as the second-best country for ease of doing business.Is $100 K in savings a lot Singapore? ›
A Singaporean's Milestone: Having $100k in Savings
It's a pretty common goal amongst many Singaporeans.
You do not need a visa for tourist or business visits up to 90 days. Visit the Embassy of Singapore website for the most current visa information.Can a US green card holder travel to Singapore without visa? ›
All foreign nations who visit Singapore will need to have an SG Arrival Card. The SG Arrival Card, or SGAC for short, is a type of electronic permit that allows travelers to enter the country, with or without a visa. Both US citizens and US Green Card holders will need the SGAC to travel to Singapore from the US.Does Singaporean need a visa to USA? ›
Most Singaporeans traveling to the U.S. on business or tourism for less than 90 days do not require a visa and can travel under the Visa Waiver Program (VWP).