How Do I Start a Small Business in Singapore? (Updated 2024)

Singapore is renowned as a prime destination for budding entrepreneurs, especially those in the dynamic sectors of e-commerce, retail, and events. With over 99% of Singapore's 311,000 registered businesses being small and medium enterprises, contributing almost half of the country’s GDP, you'll be joining a thriving community of local businesses.

Launching your business in Singapore should be exciting, not confusing. This article will walk you through the steps to start a small business in Singapore, including the legal and operational processes, and often-overlooked details that most guides leave out.

How to Start A Small Business: 7 Key Steps

Starting a business is like building a house. Before you even lay the first brick, you need a solid blueprint—a clear vision for your business idea and structure. These fundamental decisions will shape every step of your journey, from choosing materials to decorating the finished product.

1. Choose Your Business Idea and Structure

Before registering your business, conduct thorough market research. This is like "looking before you leap". Analyze the competitive landscape, evaluate market needs, and assess your skills. 

First, ask yourself:

• What problem does my product/service solve?
• Is there demand?
• Who are my ideal customers?
• Who are my competitors?
• Is there a niche I can fill with my skills/strengths?

Next, do some industry research: Many sectors in Singapore have specific regulations. Carefully research the industries you're interested in to understand the legal requirements and guidelines. Industries with specific guidelines include financial services, food & beverage (F&B), retail, technology, and real estate.

Finally, choose a business structure: Select one that aligns with your risk tolerance and the type of business. In general, there are four business structures in Singapore:

Most small businesses opt for the Private Limited Company structure as it keeps personal assets safe from business debts, making it easier for future fundraising. 

2. Determine Your Capital Requirements

When starting your small business, carefully estimate your start-up and ongoing expenses. This includes costs for rent, utilities, inventory, salaries, operating expenses, software subscriptions, etc.. To pay for your expenses, here are some funding options to consider:

a) Personal savings. Also known as “bootstrapping,” funding your business with your own money lets you retain full control over decisions with no investors or creditors to answer to. 

b) Loans from friends and family. This can be a great option as you have more flexibility to negotiate interest rates and the repayment schedule directly with your lenders. 

c) Bank loans. While this is the traditional way to get business funding, most new businesses may not meet the requirements for standard bank loans due to a lack of operational history. Fortunately, Enterprise Singapore (ESG) has partnered with multiple banks to provide the SME Working Capital Loan, a funding option with smaller loan limits.

d) Government grants and funding schemes. Explore government grants designed for SMEs to support operational costs and boost productivity. Popular options include the Productivity Solutions Grant (PSG), SMEs Go Digital, and Startup SG Founder. Check the full list of available SME grants for more details.

e) Investors. Another way to fund your idea or business is to approach investors directly. Angel investors (high-net-worth individuals) and venture capitalists (focusing on high-growth startups) are common sources of external investment. Startup incubators and accelerators guide founders through the early stages of development, while crowdfunding campaigns allow you to raise funds from many individuals through online platforms.

3. Develop a Business Plan

The next step is to create a business plan that captures your key decisions and goals. You don't need a lengthy document to get started; a one-page plan is a great way to begin (.

Key components of a business plan include:

• An executive summary that outlines your business concept and plan
• Market research and analysis findings
• Description of your products or services
• Target audience and customer segments
• Sales and marketing plan and strategy
• Projected financials, including income forecasts, expenses, and any funding needs

There is no wrong way to write a business plan, and you can always expand it later if you need to secure loans or funding that requires a more traditional business plan.

4. Choose a Business Name and Location

Choosing a company name is an exciting step forward in your entrepreneurial journey. You can do so by using BizFile+ to check if the name is available. If you find a suitable company name, you can reserve it for up to 120 days as you finalize other aspects of your business registration. 

As for your business address, a valid address is required to register your business in Singapore. In some cases, you can use residential addresses as business addresses, but you may need to seek prior approval from HDB or URA beforehand. Another method is to use the addresses of virtual offices, self-storage solutions, or corporate secretary service providers.

5. Register Your Business

With everything in place, you can now register your business entity with the Accounting and Corporate Regulatory Authority (ACRA):

1. Reserve your business name on BizFile+ (S$15 registration fee).
2. Submit necessary documents (e.g., IDs, addresses of directors and shareholders).
3. Complete the online application to register your business entity.
4. Obtain a Unique Entity Number (UEN).
5. Set up a physical business address (required for Companies and LLPs) by finding a suitable location to rent or use the address of providers like BOXPARK.
6. Open a corporate bank account with your preferred bank.

6. Take Note of Licenses, Permits, and Taxes

Apply for the necessary licenses and permits required for your specific business/industry. You've already done some industry research earlier, so now it's time to submit formal applications to the relevant government agencies. 

You should also register for Goods and Services Tax (GST) if your annual revenue is expected to exceed S$1 million. Corporate income tax rates apply to Private Limited Companies and Limited Liability Partnerships, while sole proprietors and partnerships are taxed as individuals.

7. Set Up Operations and Compliance

After registering your company in Singapore, there are just a few more things to consider:

• Implement accounting software for accurate bookkeeping and tax compliance.
• Develop HR policies and procedures that comply with labor laws (Employment Act) and data privacy regulations (PDPA) if hiring employees.
• Appoint a company secretary within 6 months for Private Limited Companies.
• Utilize BOXPARK’s self-storage for inventory and STARVAULT's safe deposit boxes for confidential documents.
• Establish a company website and social media accounts for branding, marketing, and lead generation.

Start Your Small Business with BOXPARK

Get the space you need, when you need it! Store everything from inventory and machines to props and equipment. Perfect for e-commerce businesses, retailers, freelancers, and any Singapore company in the events industry.

What you’ll get:

• 24/7 access
• Clean, temperature-controlled units
• Storage space of various sizes
• Valid business address
• Mailbox service
• Immediate signup with no waiting

Here’s how to get started with BOXPARK—take a virtual tour, get a custom quote, or contact us for more enquiries!

Need a high-security storage solution?

Looking for a safe space to store important and confidential business records? STARVAULT’s safe deposit box service is conveniently located in the same building as BOXPARK (and both are owned and operated by the same company). Your documents will be kept secure with multiple layers of security, including biometric facial recognition, access card, PIN, fingerprint verification, and key access.

Sign up for an in-person tour at STARVAULT or contact us for more details.