How to Start a Business in Singapore: Reasons, Steps and Things to Take Note of
Written by the Amazon Team
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Did you know that Singapore is known to be one of the easiest places where you can start a business? In fact, the country has been ranking highly in the World Bank’s Ease of Doing Business reports for consecutive years.
In our article, we cover some key reasons why Singapore is the ideal place to set up your business. We also share the step-by-step process of starting, the reasons to sell on Amazon and things to take note of before getting started.
Did you know that Singapore is known to be one of the easiest places where you can start a business? In fact, the country has been ranking highly in the World Bank’s Ease of Doing Business reports for consecutive years.
In our article, we cover some key reasons why Singapore is the ideal place to set up your business. We also share the step-by-step process of starting, the reasons to sell on Amazon and things to take note of before getting started.
Reasons to start a business in Singapore
For many aspiring entrepreneurs, as the country enjoys strong trade and investment, Singapore is an attractive place to start a company. Additionally, it is one of the easiest places in the world to do business.
Some benefits for business owners in Singapore include:
Some benefits for business owners in Singapore include:
- Double Taxation Avoidance Agreements
- Investment Guarantee Agreements
- Free Trade Agreements (FTAs)
- Strong intellectual property laws
Moreover, the rate of digital adoption within the country is accelerating, making online businesses an attractive option for entrepreneurs. In fact, the revenue from e-commerce in Singapore is expected to grow from US$4.56 billion in 2020 to US$11.21 billion in 2025.
Steps to starting a business in Singapore
If you are keen on setting up a business in Singapore, here are the steps to get started:
Step 1: Decide on a business idea
The first step is deciding on your business idea and coming up with a business plan. There are many different ideas that you can explore including home-based and online options. You can also choose between offering goods or services or both.
Depending on your chosen business idea, the amount of profits, capital required and time invested may differ.
Depending on your chosen business idea, the amount of profits, capital required and time invested may differ.
Step 2: Raise capital
After deciding on a business idea and laying out your business plan, it is time to raise some capital.
The amount of capital required may vary depending on the size, scale and nature of the business. For example, personal savings may be sufficient to start a small business in tutoring while a large amount of capital may be required to start a physical apparel store. The nature of your business should guide your source of raising capital. Be sure to research all your options carefully before choosing your sources for fundraising!
Here are some sources for raising capital in Singapore:
● Government grants and schemes
There are various government grants and schemes that you can leverage in Singapore. This includes, but isn’t limited to, Startup SG Founder, Startup SG Tech and Startup SG Accelerator.
● Government grants and schemes
You can explore private financing options such as venture capitalists and angel investors. Before making your pitch, it is important to conduct research on them to understand if their values and conditions are in line with your ideals.
● Loans
You can explore getting loans from banks and financial institutions. Before making a decision, you may wish to compare the interest rates to find the best one.
The amount of capital required may vary depending on the size, scale and nature of the business. For example, personal savings may be sufficient to start a small business in tutoring while a large amount of capital may be required to start a physical apparel store. The nature of your business should guide your source of raising capital. Be sure to research all your options carefully before choosing your sources for fundraising!
Here are some sources for raising capital in Singapore:
● Government grants and schemes
There are various government grants and schemes that you can leverage in Singapore. This includes, but isn’t limited to, Startup SG Founder, Startup SG Tech and Startup SG Accelerator.
● Government grants and schemes
You can explore private financing options such as venture capitalists and angel investors. Before making your pitch, it is important to conduct research on them to understand if their values and conditions are in line with your ideals.
● Loans
You can explore getting loans from banks and financial institutions. Before making a decision, you may wish to compare the interest rates to find the best one.
Step 3: Reserve your business name
Once you have secured the capital needed to start your business, the next step is to choose a unique name for your company. Below are some considerations when coming up with a business name:
- Generic words such as ‘corporation’ or a business type indicator (e.g. Pte Ltd, Limited) are not differentiating for your company name
- Some words could be viewed as vulgar, offensive or obscene and should be avoided
- There might be certain names that may be prohibited so be sure to do your research once you have thought-starters
- Names with copyrights or trademarks cannot be used
You can find out more about reserving a business on Accounting and Corporate Regulatory Authority (ACRA).
Step 4: Register your business
The next step is to register and incorporate your business on ACRA. To do so, you will need to decide on the type of business structure. Each business type has its own advantages and disadvantages so be sure to research the business landscape and scalability, planning forward before deciding on the business structure. These are the 4 main structures you can choose from:
● Sole proprietorship or partnership
A sole proprietorship can be owned by an individual, company or limited liability partnership (LLP). On the other hand, a partnership involves 2 or more partners (up to 20). Similarly, they can be an individual, company or LLP.
● Limited partnership (LP)
An LP is a type of partnership involving 2 or more partners. In this business structure, at least 1 general partner and 1 limited partner are required and the business is not a separate legal entity from the partners.
● Limited liability partnership (LLP)
An LLP operates similarly to a partnership, however, the business is a separate legal entity from its partners. This option limits the liability of the partners, potentially reducing the debts and losses accrued.
● Company
A company is a separate legal entity from its members, who have limited liability over the debts and losses of the company. At least 1 shareholder and 1 director are required to register the business. There are 2 categories of companies – private and public:
● Sole proprietorship or partnership
A sole proprietorship can be owned by an individual, company or limited liability partnership (LLP). On the other hand, a partnership involves 2 or more partners (up to 20). Similarly, they can be an individual, company or LLP.
● Limited partnership (LP)
An LP is a type of partnership involving 2 or more partners. In this business structure, at least 1 general partner and 1 limited partner are required and the business is not a separate legal entity from the partners.
● Limited liability partnership (LLP)
An LLP operates similarly to a partnership, however, the business is a separate legal entity from its partners. This option limits the liability of the partners, potentially reducing the debts and losses accrued.
● Company
A company is a separate legal entity from its members, who have limited liability over the debts and losses of the company. At least 1 shareholder and 1 director are required to register the business. There are 2 categories of companies – private and public:
- Private: 50 members or less
- Public: More than 50 members
Register your brand on Amazon Brand Registry
Amazon allows you to build your brand without having to worry about infringements or inaccurate content. When you register with Amazon Brand Registry, you can create more accurate product listings, report suspected violations and guard against counterfeit products.
Step 5: Find an office space
When registering your business, you are required to input an office address.
For larger companies, a physical office space may be required. You can either own or rent one, or use a co-working space that allows you to register their location as a business address.
For smaller businesses, you can rent a virtual office address or use a co-working space. Alternatively, your home can be registered as an office space if you have 2 or less employees who are not residing in your home. You will need to apply for a Home Office Permit, and you learn more about the Home Office Scheme on the Housing & Development Board pages here.
For larger companies, a physical office space may be required. You can either own or rent one, or use a co-working space that allows you to register their location as a business address.
For smaller businesses, you can rent a virtual office address or use a co-working space. Alternatively, your home can be registered as an office space if you have 2 or less employees who are not residing in your home. You will need to apply for a Home Office Permit, and you learn more about the Home Office Scheme on the Housing & Development Board pages here.
Enjoy working from home when you sell on Amazon Singapore
Prefer working in the comfort of your own home? You can consider setting up an e-commerce business on Amazon Singapore where you can sell a wide variety of products!
Step 6: Apply for permits or licenses
Depending on your business, you may also need to apply for the relevant permits or licenses. For example, you may need to apply for a license if you are setting up a business or e-commerce store selling secondhand goods.
Get approval for your products before listing them on Amazon
Did you know that certain product categories on Amazon Singapore require additional approval before they can be sold? Before you list your products, be sure to find out if approval is required.
Step 7: Set up a bank account for your business
Most business structures require you to set up a separate bank account for your business where you will receive and make payments for your goods and services.
Some factors to consider when choosing a bank include:
Some factors to consider when choosing a bank include:
- Monthly maintenance fees
- Minimum initial deposit
- Minimum fall below fees
Receive payment from Amazon to your bank account safely
When you have a positive balance in your Amazon seller account, the amount will be transferred to your bank account on a periodic basis.
To ensure the safety of these transfers, only accounts that are part of Amazon’s Payment Service Provider Program or those issued by a deposit taking-bank will be accepted.
To ensure the safety of these transfers, only accounts that are part of Amazon’s Payment Service Provider Program or those issued by a deposit taking-bank will be accepted.
Step 8: Hire employees
Employees are a crucial part of the business as they assist you with the daily activities and operations. You can source for talent through agencies and online recruitment portals.
When hiring employees, you may wish to take note of the regulations stipulated by the Ministry of Manpower (MOM) such as the Employment Act and sick leave entitlement. These regulations cover areas such as the maximum working hours per week and the number of sick leave and annual leave days.
When hiring employees, you may wish to take note of the regulations stipulated by the Ministry of Manpower (MOM) such as the Employment Act and sick leave entitlement. These regulations cover areas such as the maximum working hours per week and the number of sick leave and annual leave days.
Step 9: File corporate income tax
As a business, you are required to file corporate income tax. In Singapore, this is a flat rate calculated based on a percentage of the business’ chargeable income. Certain companies may be able to enjoy full or partial tax exemptions, depending on their eligibility.
Reasons to start a business on Amazon Singapore
Thinking about starting an e-commerce business? Here are some reasons why you should build your store on Amazon Singapore.
Access to local and international markets
When you sell on Amazon, you can get access to our customer base in Singapore and can even expand to more than 20 marketplaces worldwide. In fact, over 300 million customers shop on Amazon stores globally.
Easy order fulfillment
Instead of handling order fulfillment on your own, Amazon offers you the option of leaving this process to our team with Fulfillment by Amazon (FBA). We can help you pick, pack and ship your products, and assist with customer enquiries while you focus on growing your business.
Comprehensive support for sellers
Amazon offers various tools and solutions to help you grow your business including brand analytics, advertising and our own Service Provider Network. We also offer resources through our Seller University and webinars where you can get tips and advice from our team and expert sellers.
Things to take note of when starting your business on Amazon Singapore
Before starting your business on Amazon Singapore, these are some things you may want to take note of:
Business structure
A store on Amazon can take the form of any business structure (i.e. sole proprietorship, partnership, LP, LLP or company). However, it is important to consider the extent of liability you are willing to incur based on the size and nature of your business.
Seller registration
To sell on Amazon Singapore as a business, you will need to prepare the following items and documents:
- Proof of business establishment
- Identity document (ID) of the company representative (e.g. passport or national ID card)
- An internationally chargeable credit card
- A local phone number
Register as a seller on Amazon Singapore
Confused about the seller registration process? Read our guide for more information on how to register on Amazon.
Selling fees
There are 3 types of fees when selling on Amazon Singapore – selling plan, referral and logistics fees.
a. Selling plan
On Amazon, you can choose between the individual or professional selling plan (prices exclude GST):
● Individual: $1 per item sold
● Professional*: $29.95 per month (regardless of the number of items sold)
*The subscription fee is waived until 31 December 2023. Terms and conditions apply.
b. Referral fees
This is a commission fee that is charged based on the total selling price of a product and varies depending on the product category.
c. Logistics fees
This is an optional fee, depending on how you choose to fulfill your customers’ orders.
● Fulfillment by Amazon
If you opt to ship your orders through Fulfillment by Amazon (FBA), you can enjoy a hassle-free order fulfillment process. You can also tap on our customer service capabilities to manage enquiries and handle returns and refunds.
Use our Fee Calculator to find out the estimated cost of your shipments.
● Amazon Easy Ship
When you deliver your products through Amazon Easy Ship (AES), you enjoy greater visibility on your orders and a simplified shipping experience. You can also plan for your operations more accurately with AES’s rate card.
a. Selling plan
On Amazon, you can choose between the individual or professional selling plan (prices exclude GST):
● Individual: $1 per item sold
● Professional*: $29.95 per month (regardless of the number of items sold)
*The subscription fee is waived until 31 December 2023. Terms and conditions apply.
b. Referral fees
This is a commission fee that is charged based on the total selling price of a product and varies depending on the product category.
c. Logistics fees
This is an optional fee, depending on how you choose to fulfill your customers’ orders.
● Fulfillment by Amazon
If you opt to ship your orders through Fulfillment by Amazon (FBA), you can enjoy a hassle-free order fulfillment process. You can also tap on our customer service capabilities to manage enquiries and handle returns and refunds.
Use our Fee Calculator to find out the estimated cost of your shipments.
● Amazon Easy Ship
When you deliver your products through Amazon Easy Ship (AES), you enjoy greater visibility on your orders and a simplified shipping experience. You can also plan for your operations more accurately with AES’s rate card.
Goods and Services Tax
While it is not compulsory to be GST-registered to sell on Amazon Singapore, local GST laws may require your business to be registered. According to the Inland Revenue Authority of Singapore (IRAS), the requirement to be GST-registered is dependent on your business’ taxable turnover.
In an ever-changing landscape, you are encouraged to refer to the IRAS GST Website for the latest GST guidelines.
Once your business has been GST-registered, you will need to submit your GST registration number to Amazon. You will also be required to charge GST on goods sold through the store.
In an ever-changing landscape, you are encouraged to refer to the IRAS GST Website for the latest GST guidelines.
Once your business has been GST-registered, you will need to submit your GST registration number to Amazon. You will also be required to charge GST on goods sold through the store.
FAQs on starting a business in Singapore
Can anyone start a business in Singapore?
Both locals and foreigners can start a business in Singapore and own 100% of the company’s shares if they are over 18 years old. However, they must not be bankrupt or have been convicted of a legal offense.
Is it easy to start a business in Singapore?
Yes, Singapore is known as one of the easiest countries to start a business.
However, as a business owner, there are certain factors to take into account including the preparation needed and the capital and manpower required. These factors will depend on your chosen business idea and can affect the ease of starting.
However, as a business owner, there are certain factors to take into account including the preparation needed and the capital and manpower required. These factors will depend on your chosen business idea and can affect the ease of starting.
How much does it cost to start a business in Singapore?
The cost of starting a business in Singapore depends on the industry and the number of employees you are planning to hire.
You can use a cost calculator for a rough estimate of the amount needed to set up and run your business for the first year of operation.
You can use a cost calculator for a rough estimate of the amount needed to set up and run your business for the first year of operation.
What businesses can I start in Singapore?
There are many different types of businesses that you can start in Singapore including:
● E-commerce
● Dropshipping
● Baking
● Delivery
● Laundry
Note: This list is not exhaustive and merely lists some examples of businesses to start in Singapore.
● E-commerce
● Dropshipping
● Baking
● Delivery
● Laundry
Note: This list is not exhaustive and merely lists some examples of businesses to start in Singapore.
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