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Author: boardroomsuperadmin
Sustainable Finance & ESG Reporting: Transformative Steps Taken in APAC
Environmental, social, governance: why it’s essential for SMEs
Environmental, social, governance: why it’s essential for SMEs
Environmental, social and governance (ESG) issues are taking centre stage in Singapore’s business landscape, propelled by a global push towards climate change mitigation, with governments worldwide committing to net-zero targets. This shift has placed increased pressure on businesses to adopt responsible practices, emphasising social equity, transparency and accountability. Furthermore, evolving regulations aimed at enhancing safety and legitimacy within the business environment underscore the critical importance of ESG engagement for companies of all sizes.
It’s not just large corporations that are expected to embed ESG principles in their business operations. In Singapore, small and medium-sized enterprises contribute to 48 per cent of Singapore’s GDP and employ 71 per cent of the workforce, highlighting the role SMEs have in driving sustainable and ethical business practices that contribute positively to the overall health of the economy. As such, SME owners and business leaders are pivotal in shaping a more sustainable, equitable and responsible business future.
In this article, we explore what environmental, social and governance is and why implementing robust ESG practices and processes is not just critical but a strategic advantage for SMEs. We also uncover related opportunities for organisations and provide insights on where business owners and leaders can find the necessary support to implement these ESG practices and policies.
Understanding environmental, social and governance and its relevance to SMEs
Environmental, social and governance is a set of practices adopted by companies to guide how they should conduct business ethically and sustainably. At a broad level, ESG covers the following elements:
- Environmental responsibility focuses on a company’s impact on nature. For example, a small enterprise could adopt energy-efficient operations, reducing both environmental impact and operational costs.
- Social accountability measures how a company manages relationships with employees, communities and suppliers. For SMEs, this could involve creating inclusive workplace policies, engaging in community development projects or ensuring fair trade practices with suppliers.
- Governance concerns practices around a company’s leadership, ethics and transparency. Good governance in SMEs could include developing transparent reporting systems to build stakeholder trust.
Recognising that there is no ‘one size fits all’ approach to integrating ESG practices into business strategy and operations is crucial, as implementation will vary significantly across industries. For example, professional services firms may find greater leverage and opportunities for impact within social and governance, while a consumer goods manufacturer may prioritise environmental and social aspects more heavily.
Why do ESG and sustainability matter?
ESG is a response to a range of concerns, including climate change, rising social inequality and the changing nature of economies.
Investors and stakeholders are increasingly taking ESG into account in their decision-making. Society, customers and clients also expect the companies they interact with to be environmentally and socially responsible. Companies that have robust ESG strategies to manage risks can meet these expectations and compete successfully and strongly in the market.
In Singapore, implementing robust ESG practices offers SMEs the opportunity to differentiate themselves from their competition, attracting more investment, appealing to a larger customer base and ensuring long-term success.
For SMEs eyeing European markets, showcasing solid ESG practices is vital. Europe’s strict corporate social responsibility and sustainability regulations dictate that businesses adopt and visibly demonstrate their ESG commitment.
The Singapore Stock Exchange weighs in
In compliance with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, the Singapore Exchange (SGX) requires all issuers, including the many SMEs listed, to incorporate climate-related reporting in their sustainability reports. This requirement means companies will have to report on their social and environmental impacts and performance.
The date from which companies have to comply with this mandatory reporting depends on the relevant industry. For example, those in financial services, energy and agriculture are required to report under the TCFD framework from the financial year 2023. Building and transport industries will be required to report from 2024.
Challenges and opportunities of ESG adoption
There’s no doubt that ESG is a priority for growing businesses and SMEs of all sizes, but implementing new policies and procedures into business operations can also increase pressure on owners, managers and staff. For small businesses particularly, implementing sustainability practices can be expensive. Busy small business owners, absorbed in the day-to-day running of their business, may not have the time to gain the knowledge needed to implement new practices effectively and give their employees the skills they need to focus on ESG issues.
Although ESG strategies can potentially yield long-term financial benefits, the immediate challenge for many SMEs lies in maintaining profitability in the short term. Balancing ESG objectives with business growth can be daunting, especially when faced with limited access to technical know-how, which stops many SMEs from even trying.
However, integrating ESG into everyday business practices does not have to be overwhelming. Beginning with small, manageable actions can set the foundation and lead to effective long-term change.
Some examples include:
- Adopting energy-efficient practices, starting with something as simple as switching to energy-efficient light bulbs.
- Seeking financial support from government bodies and initiatives designed to support businesses implementing ESG practices.
- Forming partnerships with multinational companies, other SMEs and non-profit organisations to increase ESG knowledge and understanding through collaborative forums.
- Engaging with a service provider experienced in facilitating ESG integration, to guide and support your business along this path.
Tina Thomas, Head of Environmental, Social, and Governance (ESG) at BoardRoom Group, highlighted, “Small and medium-sized enterprises often lack the comprehensive knowledge required for initiating and executing effective ESG strategies. Additionally, they may encounter significant resource limitations. Nevertheless, this is precisely the juncture at which our expertise becomes invaluable. The ESG team at BoardRoom is adept at managing these processes efficiently and in a cost-effective manner, offering a seamless solution for businesses aiming to enhance their sustainability practices.”
The benefits of a robust ESG strategy
These challenges shouldn’t stop SMEs from exploring the benefits of ESG adoption for cost savings, improved efficiency and risk reduction.
Here, we take a look at some of the benefits:
- increased cost savings from ESG policies, such as a reduction in water and energy usage;
- ESG risks and opportunities can be easily identified if supply chain processes are streamlined;
- reduction in waste and the costs associated with waste management;
- reduction in the risk of regulatory fines due to non-compliance;
- an increase in shareholder value and attracting increased investment;
- appealing to a broader range of potential customers;
- an increase in employee morale, efficiency and health and safety outcomes as a result of prioritising employee wellbeing;
- an ability to attract and retain talent and build a stronger employee brand;
- access to new markets;
- access to tax incentives and government grants; and
- differentiation, which can offer many SMEs a competitive advantage.
Clients, customers, investors and regulators now expect businesses of all sizes to reduce their harmful impacts on the environment and people while increasing their resilience to the effects of climate change.
SMEs with ESG cost-saving and other strategies in place that align with their business purpose are much better placed to adapt and meet the challenges of the future while capitalising on opportunities today.
Practical steps towards ESG integration
Integrating ESG into business practices, strategies and goals can be straightforward and varied based on the individual business. A business could initially take several broad steps; however, it’s crucial to define your company’s ESG goals from the outset clearly. This involves engaging stakeholders and establishing regular monitoring to identify areas for improvement.
Tina adds that a good way to start weaving ESG into day-to-day operations is by collecting and analysing data on the performance of the business. She says, “Step one is making sure there’s a process in place where you collect data on a regular basis, perhaps quarterly. Then, assess the data to expose trends, and set ESG KPIs against the data.”
Other key steps to consider include the following:
Where to find support
The Government of Singapore offers a range of incentives and grants to help SMEs adopt ESG best practices. If you’re looking for ESG grants in Singapore or need guidance on where to start, here are some helpful resources:
- Enterprise Singapore’s Enterprise Development Grant (EDG) helps SMEs develop projects to upgrade and innovate their businesses, explore opportunities for growth and expand internationally. Additionally, SMEs can engage with a Registered Management Consultant like Tina for support with integrating sustainability into their business.
- The Enterprise Sustainability Programme (ESP) supports companies in Singapore to learn about and adopt sustainable, green practices.
- The Productivity Solutions Grant (PSG) gives SMEs a financial boost to adopt technical solutions to improve their productivity.
- The Energy Efficiency Fund consists of five grants to support businesses in improving energy efficiency in their industrial facilities.
Discover the opportunities of ESG today
There’s no doubt that environmental, social and governance (ESG) issues are becoming increasingly important for Singapore’s businesses to address. SMEs have a large role to play, and if they don’t already have ESG policies and practices in place, there is mounting pressure to do so.
Implementing ESG offers more than compliance for SMEs. It unlocks innovation, sustainability, and market leadership by fostering long-term business resilience and distinguishing your brand in today’s eco-conscious market. With Singapore’s supportive incentives and leveraging the expertise of business consultants, SMEs can seamlessly integrate ESG now more than ever before.
With a dedicated team of experienced ESG consultants in Singapore, BoardRoom can help your business maximise its positive impact and make the most of opportunities with ESG Access. BoardRoom also offers a range of other services, including company incorporation and corporate secretarial. Contact us to find out more today.
Contact BoardRoom for more information:
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In our commitment to keeping you abreast of pivotal developments, we are pleased to present our commentary of Singapore’s Budget 2024, unveiled by Deputy Prime Minister and Finance Minister Lawrence Wong on 16 February 2024, themed “Building Our Shared Future Together”.
Reflecting on the fiscal year 2023, Singapore exceeded revenue expectations, primarily driven by higher Corporate Income Tax collections.
Against this positive backdrop, Budget 2024 is strategically positioned to propel the Forward Singapore agenda. Our detailed Singapore Budget 2024 Commentary delves into the key tax measures affecting both businesses and individuals.
Key tax measures for businesses
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- Introduction of the Refundable Investment Credit (RIC) Scheme
- Introduction of Corporate Income Tax (CIT) Rebate and CIT Rebate Cash Grant
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- Extension and Revision of Tax Incentive Schemes for Qualifying Funds
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- Introduction of Additional Concessionary Tax Rate (CTR) Tiers
Key tax measures for individuals
- Introduction of Personal Income Tax Rebate
- Increasing Annual Income Threshold for Dependent-Related Relief
- Impending Lapse of Course Fees Relief (CFR)
- Removal of Tax Relief for CPF top up qualifying for Matched Retirement Saving Scheme (MRSS)
Other key tax measures
- Introduction of Overseas Emergency Humanitarian Assistance Tax Deduction Scheme (OHAS)
- Withdrawal of Income Tax Concession on Royalty Income
As we collectively navigate the Forward Singapore agenda, understanding these fiscal changes becomes paramount. Download our commentary now to stay informed and ahead.
Should you have any questions on how to maximise your tax position with this latest announcement, please email our tax team at [email protected].
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The power of BPO in facilitating overseas business growth
The power of BPO in facilitating overseas business growth
Expanding a business overseas is a critical growth goal for many organisations. The appeal of new markets is enticing, but the challenges of moving into offshore territories can be overwhelming.
Understanding and complying with diverse, unfamiliar legal frameworks, tax structures and regulatory compliance standards in foreign territories is a complex process, and non-compliance can result in far-reaching consequences for any business. For owners, entrepreneurs and leaders keen to pursue overseas opportunities but needing an in-depth understanding of local issues, specialist business process outsourcing (BPO) services can be essential to safe and successful expansion.
Through a BPO partner, businesses gain insights into local compliance and strategic support in navigating the intricate process of establishing and growing your presence in new markets.
In this article, we explore what a BPO provider is, what they do for their clients, and how BPO can help clients navigate regulatory complexities when considering expansion into Asia.
What is BPO? Your key to successful international expansion
Running a business, especially one that is expanding globally, is complex and can be fraught with compliance risks. Missteps in unfamiliar areas can lead to significant consequences, demanding careful navigation, knowledge and skills. That is where business process outsourcing (BPO) comes in. BPO occurs when a business outsources critical backend functions to external entities.
However, it’s important to recognise that certain functions will come with an increased need to find a provider that specialises in regulatory compliance.
Some of these functions are:
When you engage an expert BPO service provider with specialised skills in regulatory compliance to outsource these critical functions to, your staff can concentrate on your business’s core competencies. By working with an expert provider and also being aware of how each function interplays with your company’s broader operations and expansion goals, risk can be mitigated, ensuring the integrity and continuity of your core business activities.
There are several fundamental advantages of partnering with a compliance focused BPO provider:
Navigating your expansion into Asia
Asia’s robust economic growth and diverse markets make it an increasingly attractive destination for business expansion. In this rapidly growing business environment, understanding the key factors crucial for successful business expansion is pivotal for tapping into the region’s unique opportunities.
Here are four important factors to look out for in selecting your BPO provider:
The complexity of local regulations
Business owners entering new markets in Asia must understand that the regulatory landscape in the region has evolved and continues to evolve rapidly. Hugo Walkinshaw, Group Chief Executive Officer of BoardRoom, has this advice for foreign investors entering Asia. “There’s some commonality among Commonwealth countries, but you cannot assume if you have a footprint in one country, you can easily take that elsewhere. We advise businesses to be aware that Asia’s not one place.”
Just as every country has a unique culture, language, time zone and climate, so too are its regulatory framework, laws, processes and ESG standards. Therefore, it is recommended you get advice from a BPO provider who has the experience in regulatory compliance and deep relationships with the regulators in the country you are planning to enter.
Owners and business leaders who fail to consider the complex regulations are putting their personal and business reputations at risk.
Leveraging technology in an evolving regulatory landscape
Technology is changing how businesses operate, and the regulations that govern technology are also evolving rapidly. This complexity is magnified in Asia due to the diverse legal and technological landscapes across different countries.
An example is data security, which has become increasingly complex in a rapidly-digitised world where data is valuable, and automation is commonplace. Businesses have a duty of care to themselves, their staff and their customers to protect data and information systems. A service provider with sound security systems in place is an essential layer of protection to your business, ensuring compliance with local data protection laws. This is especially crucial for functions like payroll, where sensitive employee data must be handled with care and accuracy across different legal frameworks.
Partnering with a compliance-focused service provider who understands these regulations and leverages the latest technology provides assurance that compliance requirements are consistently met.
Geopolitical and economic concerns
The Y2K scare, the 1997 Asian crisis, the 2007-08 Global Financial Crisis and COVID-19 – the past two decades have been punctuated by massive economic uncertainty and geopolitical volatility. These factors make for an increasingly complex environment for businesses. However, Hugo says economic opportunities in the region are still compelling.
A corporate services provider that offers an integrated suite of services across multiple countries can leverage regional expertise and serve as a single point of contact for businesses moving into Asia. Furthermore, businesses ought to seek a seasoned provider with a appropriate market presence that is aligned with your expansion goals. These providers will have first-hand experience navigating legislative changes and are better positioned to address the needs of businesses amidst volatile geopolitical and economic uncertainty.
Ensuring the right coverage
When choosing a BPO provider, it is important to understand their size and scale. What services do they provide, and which countries do they operate in?
Businesses entering Asia will find many providers that Hugo calls “single-service, single-country local players”. But these might not offer a comprehensive enough service for your business. Choosing a provider that operates in several countries with a range of services is often a better option, allowing your business to enter whichever country you decide to expand into.
Furthermore, a service provider with regional expertise and integrated services like corporate secretarial and tax advisory can also help optimise your business’s tax payouts. This starts at the incorporation stage with the advice on the most advantageous business structure. Different business structures have varying tax implications, and a knowledgeable service provider can navigate these intricacies to ensure that your business benefits from tax efficiency while remaining compliant.
BoardRoom: your compliance focused BPO partner
Successfully establishing a business in Asia requires a deep understanding of its laws and regulatory structures. Regulatory compliance-focused BPO service providers equipped with this expertise offer invaluable guidance to help businesses navigate the complexities of regional expansion. They take on the responsibility of a range of business processes, freeing up your time and resources to grow your business.
At BoardRoom, we have the regional expertise to help your business navigate the complex regulatory landscapes and technology integration in various Asian nations.
Our multi-service offering and our years of experience managing cross-border expansion means you get integrated, efficient solutions to help your business succeed:
- Corporate Secretarial
- Company Incorporation
- Accounting
- Tax Advisory and Filing
- Payroll
- ESG Advisory Services
Contact our team for your expansion needs now!
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Singapore’s variable capital company: a guide to VCC benefits and setup
Singapore’s variable capital company: a guide to VCC benefits and setup
In the evolving landscape of Singapore’s financial sector, variable capital companies (VCCs) have emerged as a prominent and flexible solution for diverse investment needs.
Thanks to its innovative structure, the VCC has led an increase in investment flows into the city-state, and has helped to propel Singapore firmly onto the global stage as a destination of choice for fund managers and family offices. This has also led to opportunities for professionals through the creation of local jobs. In response to the high demand, the Singaporean government recently extended the Variable Capital Companies Grant Scheme to 15 January 2025.
This article provides an overview of the VCC to help you decide if it is the right investment vehicle for you. In consultation with multiple business experts, we explain what a variable capital company is and the benefits it offers. We will also explain the setup process and provide advice for giving your entity the best chance of success in the region.
The VCC structure and its unique benefits
The VCC is an innovative structure offering many benefits for investment managers in Singapore – particularly high-net-worth individuals and families.
“The introduction of the VCC Framework at the start of 2020 further strengthened Singapore’s value proposition as a leading full-service asset management hub,” explains Eunice Hooi, Head of Corporate Secretarial for BoardRoom Singapore.
Like private limited companies, VCCs are governed by a board of directors and have shareholders who own shares in the fund. They also offer limited liability for shareholders and directors, as they are considered a separate legal personality (this means that shareholders and directors are protected in cases of litigation against the company).
However, VCCs have unique benefits that may make them a preferred structure for investment managers. In contrast to other investment structures, VCCs offer:
- operational flexibility;
- tax efficiency, and
- privacy.
Importantly, fund managers can use VCCs for both open- and close-ended funds. Open-ended funds allow investors to freely invest, redeem or withdraw shares without shareholder approval, empowering them to respond swiftly to market changes. “VCCs can also pay dividends out of capital, giving fund managers the flexibility to meet their dividend payment obligations,” says Zhan Aijuan, Senior Manager of Corporate Secretarial for BoardRoom Singapore.
In addition, VCCs can incorporate new funds and re-domicile existing funds to a new location.
“VCCs can also enjoy the extensive tax treaty network that the Singapore government has with over 85 countries,” Eunice adds.
VCCs can be set up as:
- a standalone fund or
- an umbrella VCC with two or more sub-funds, each holding a portfolio of separate assets and liabilities.
Josephine Toh, Associate Director of Corporate Secretarial for BoardRoom Singapore, adds that umbrella VCCs can offer valuable economies of scale.
“VCCs need to appoint a variety of professionals, such as fund managers, company secretaries and auditors,” she says. “Umbrella VCCs enable investors to achieve economies of scale by splitting the cost of using the same professionals across all sub-funds.”
Further, the fund managers can claim a 30% reduction on qualifying VCC set-up costs paid to Singapore-based service providers through the Variable Capital Companies Grant Scheme.
Regulatory requirements for VCCs
Compliance requirements for VCCs encompass stringent reporting standards and governance mechanisms to promote transparency and accountability.
The Variable Capital Companies Act governing VCCs in Singapore is relatively new, and therefore will continue to develop. Fund managers must ensure their VCC complies with this legislation as it evolves.
VCCs also have obligations to the Monetary Authority of Singapore (MAS), such as the implementation of processes for anti-money laundering and countering the financing of terrorism.
Key requirements for the setting up of VCCs include:
- at least one ordinarily resident director in Singapore;
- one qualified MAS licensee as a fund manager (this can be the same person as the local resident director);
- a registered office in Singapore;
- a Singapore-based company secretary; and
- an auditor and annual audits.
Setting up a Singapore VCC
A prominent feature of the VCC framework is the option for fund managers to either set up a new VCC or re-domicile their existing investment funds with comparable structures to Singapore. This flexibility offers a range of advantages and can significantly enhance the fund manager’s operations. Below are the steps in incorporating a new VCC or re-domiciling existing investment funds.
Incorporating a new VCC
Companies seeking to expand their presence in Singapore or tap into the benefits of the VCC structure can set up a new VCC. Here are the key steps involved:
INCORPORATING A NEW VCC
Register a VCC name via the VCC Portal. Once approved, the VCC must be incorporated within 120 days and adhere to any potential reviews by Referral Authorities.
Decide between establishing a non-umbrella VCC or an umbrella VCC that contains multiple sub-funds with segregated assets and liabilities.
Appoint VCC officers, including director, company secretary, auditor and fund manager. At this point, you will also need to decide on the VCC's first financial year end (FYE) and determine the accounting period length.
Provide a publicly accessible registered office address for the VCC and submit a constitution detailing the VCC's governance, operations and key stakeholder rights and responsibilities.
This can be done directly through the VCC Portal or via a registered filing agent or corporate service provider. The processing time can range from 14 to 60 days, depending on any additional governmental reviews.
Register individual sub-funds under an umbrella structure of a VCC.
Re-domiciling existing investment funds
For fund managers with existing overseas investment funds that align with the VCC framework’s criteria, the option to re-domicile these funds to Singapore can be an efficient and cost-effective strategy. This process involves transferring the registration and legal domicile of an existing fund to Singapore while retaining its existing structure. Here are the key requirements needed for re-domiciling existing investment funds:
Eligibility assessment: Fund managers must first determine whether their existing investment funds meet the criteria for re-domiciliation to a Singapore VCC. The existing fund should have a similar structure and characteristics to that of a VCC, making it a suitable candidate for re-domiciliation.
Approval from shareholders: In most cases, the existing fund’s shareholders must approve the re-domiciliation. This process may require a special resolution or a majority vote, per the fund’s existing legal structure.
Regulatory compliance: Fund managers should ensure that the re-domiciliation process aligns with the regulatory requirements of both the fund’s current jurisdiction and Singapore.
Transfer of assets and liabilities: As part of the re-domiciliation process, assets and liabilities of the existing fund must be appropriately transferred to the newly incorporated Singapore VCC. If applicable, this transfer process should ensure the segregation of assets and liabilities for each sub-fund.
Appointment of local service providers: Engage local service providers, including a permissible fund manager, company secretary, and auditor, to ensure compliance with the VCC Act’s requirements. The engagement of these professionals is crucial for ongoing compliance.
Re-domiciliation application: Submit the necessary documentation to the Monetary Authority of Singapore (MAS) for approval of the re-domiciliation. The application should include details of the existing fund, the proposed Singapore VCC structure, and other relevant information.
Tax implications: Consider the tax implications of re-domiciling the fund to Singapore. Collaborate with tax advisors to maximise the benefits available under Singapore’s tax incentive schemes, such as the Singapore Resident Fund Scheme or the Enhanced-Tier Fund Scheme.
A trusted partner in Singapore VCC incorporation
The VCC in Singapore is transforming the investment landscape, offering flexibility, tax benefits and privacy. It attracts wealth, creates jobs and solidifies Singapore’s position as a global financial hub. Setting up a VCC in Singapore involves navigating a complex landscape of legal, financial, and regulatory requirements.
BoardRoom, as a trusted partner with more than 50 years of experience in corporate services, can guide you through each step of the process, from registering your company to corporate secretarial services and setting up an efficient tax structure. BoardRoom can also ensure your accounting and tax compliance meet local and APAC-wide standards for your VCC in Singapore.
Contact us today to discuss how we can help set up your VCC and optimise the tax incentives.
Contact BoardRoom for more information:
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Startup companies in Singapore: where are the opportunities?
Startup companies in Singapore: where are the opportunities?
In an increasingly unpredictable global business landscape, Singapore stands out thanks to its economic resilience and stability. Renowned for its robust economy, Singapore has strategically cultivated a welcoming environment for startups and businesses alike, offering a unique blend of security, consistent growth and government initiatives that foster innovation.
A straightforward regulatory framework, low corporate tax rate and a strong rule of law underscore the country’s business-friendly atmosphere. For startup companies, Singapore’s appeal extends beyond its economic prowess, as it has positioned itself as a dynamic hub for new ventures ready to capitalise on opportunities and join a vibrant business community.
In this article, we delve into the landscape created for startups and new businesses, the reasons entrepreneurs should consider establishing their startups in Singapore, and the factors business owners need to consider when registering a startup in Singapore.
Why choose to establish your startup in Singapore?
The Singapore Government actively promotes a business-friendly environment through open policies and initiatives, a relatively uncomplicated regulatory framework, a resilient free market economy, low taxes and tax incentives. It also provides a range of attractive grants for startups.
The government’s strong focus on economic development has created an environment where startups in Singapore can thrive and where foreign investors are welcome. Startups and entrepreneurs will find a supportive and innovation-led business community. As a result, Singapore has built a global reputation as a top location for international expansion. Here are just a few other reasons why it is a great place to do business:
- Singapore has a stable economy with world-class transportation, communication and technology networks and other infrastructure.
- Thanks to its diversified economy, it offers opportunities in a range of industries.
- Singapore is a global financial hub with a well-regulated and stable financial system.
- The Singapore Government has implemented incentives and policies to streamline administration and create a pro-business environment.
- Its efficient regulatory framework makes establishing a business in Singapore easy. For example, an application to incorporate a private limited company in Singapore can be approved within a day through the Accounting and Corporate Regulatory Authority (ACRA).
- Singapore has low corporate tax rates and a transparent legal system. The tax system is straightforward to navigate, with tax incentives offered to many businesses.
- Situated at the crossroads of major shipping routes, Singapore serves as a gateway to the Asia-Pacific region.
- Its multicultural environment has created diverse markets for businesses to tap into.
What is the startup scene in Singapore?
The government has proactively encouraged an environment of innovation and supports this in a range of ways. For example, the Economic Development Board provides resources and assistance to support overseas companies and individuals starting businesses in Singapore. The government has also invested in the Startup SG program, providing various services and grants to Singapore’s startups. Some sectors offering an array of opportunities that startups could consider include:
A supportive community is a hallmark of the startup scene in Singapore
Along with a variety of government-led assistance programs to support entrepreneurs and innovators, Singapore’s thriving business community has also created initiatives to foster growth. The Action Community for Entrepreneurship (ACE) helps to promote entrepreneurship, catalyse new growth opportunities, scale startups and build champion enterprises. For example, ACE’s Start-up Mentorship Program connects entrepreneurs with experienced business leaders who offer their expertise and guidance without charge.
The Singapore Women Entrepreneurs Network (SG-WEN) provides an important platform for women in business to unite, network and share experiences and insights.
The Youth Co:Lab is an example of an initiative designed for young people in business. It offers a collaborative and creative workspace for entrepreneurs to cultivate their ideas and support their business growth.
Best practices when registering your startup in Singapore
While Singapore has created a welcoming environment for new businesses, there are many compliance factors that startups and entrepreneurs must consider when incorporating a business in Singapore.
Eunice Hooi, Head of Corporate Secretarial, BoardRoom Singapore, says it is important to seek advice from an experienced, professional advisor when launching a business. “They will guide business owners through every stage of the incorporation process. They will also provide specialty advice on the different types of business structures available, and which one is best suited to the business needs. They will also take into consideration the legal and the tax implications of business ownership.”
Eunice says business owners need to consider the answers to several questions. What is the nature of your business? Are you establishing a branch i.e. an extension of your head office in another country? Or do you want to test the market by registering a representative office before you set up a permanent structure in the foreign country? A professional advisor can help you answer these questions and provide advice on the types of company structures in Singapore. They will also help you fulfil your obligations and avoid the pitfalls of inadequate planning.
Three critical aspects when establishing a business in Singapore are tax, corporate secretarial and payroll.
A professional can help you understand the tax implications of your business and decide on a structure that takes advantage of tax incentives.
Singapore also has cultural nuances and sensitivities that those unfamiliar with the business landscape might find challenging. It is important to understand and respect the cultural norms of your workforce. Ken Wong, Managing Director Asia, Payroll at BoardRoom, highlights some of these nuances: “Singapore is so diverse and there are times when you actually will need to make salary payments earlier so employees can enjoy festive holidays with salaries being paid to them in advance,” says Ken. “Singapore also has a prevalent ‘bonus culture’, with employees often expecting to receive some form of bonus at the end of the year, this is often not written in an employment contract.”
How BoardRoom supports your startup
Singapore is a politically safe, business-friendly country. Businesses and startup companies in Singapore enjoy an array of incentives and support to help them thrive. For entrepreneurs and business owners venturing into the Singapore market, understanding and respecting the local business landscape is crucial. This includes being well-versed in areas such as tax regulations, business structures, corporate regulatory requirements and payroll compliance.
Offering a range of corporate services, BoardRoom has proven itself to be a trusted partner of established and startup businesses in Singapore. We guide your business at every step and offer a range of corporate services, including corporate secretarial, payroll, tax compliance, company incorporation, accounting and bookkeeping and ESG advisory services.
Contact us to discuss how we can help you establish your startup today.
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