Incorporating a company in Singapore can be a very good idea, and it’s one of those things that will help companies grow and expand in the long term. But as always, there are Singapore company incorporation challenges too. There can be certain struggles and various Singapore business setup issues that you will face at times. Of course, this will vary between niches. Yet it’s still the type of thing that you have to keep in mind.
Finding a location for your business
When you learn how to incorporate a company in Singapore, one of the main issues that arise is the fact that rental prices can be very high. Buying a place is usually better in the long run. But as a small business that’s just incorporating, rentals are the cheaper option at the time. Yet despite that, rental prices have been higher and higher over the past few years. And the worst part here is that it will only end up being more challenging in the long term.
It’s important to understand that finding a place where you can do business from is quite tricky for a company when it’s just conceptualized. However, there are alternatives like business hubs where you can split some of the costs. And that’s the thing, you always want to focus on expanding on the process and pushing the boundaries as much as you can. But in most situations, that’s going to be a struggle if you don’t have an adequate place to do business from. Yes, there are some ways to circumvent things like having multiple businesses split costs as they operate from a single space.
Regulations regarding the way you operate
In general, Singapore is a pro-business country, but that doesn’t mean you can do anything you want. There are very specific rules and requirements that you must abide by. So even if it seems like a relaxed environment, that doesn’t mean they will be accepting anything without any struggle. The problem here is that a lot of the time, you need to know the regulatory framework very well.
It makes sense to have a legal expert that can help with any Singapore business setup issues or ongoing problems. Those things can be solved in the long term, and it will lead to a much better result. Plus, you can learn from the start how to maintain a healthy operation without worrying about any issues that can end up affecting your company going forward. Even if it doesn’t seem like a problem at first, it does become one down the line.
Hiring people can be tricky
It’s ok if you want to hire someone that’s residing in Singapore. The problem is that every single foreign worker you want to bring to the company will need to have their own work pass. There are restrictions to who can get a work pass. And in many cases, it can take quite a bit of time to receive that pass. Plus, people that come via such a pass can’t change jobs. They don’t even have the option to have any self-employment outside of the company they have a work pass from.
There are also restrictions and certain authorizations that you need to follow with this particular pass. Even if it doesn’t seem like an issue at first, it most certainly becomes one as you try to address all the different challenges and downsides. Thankfully, you can hire locals for your business. You can still hire foreigners, but keep in mind that it can become a struggle to keep up with the work pass requirements for each person.
A lack of capital
You can find many different ways to generate capital in Singapore. The problem is that there are way too many companies trying to do the same thing. In some ways, we can see it as a victim of its own success. But the reality is that getting capital is a struggle for many companies. Aside from the Singapore company incorporation challenges themselves, the inability to get capital can be a huge challenge. And it’s definitely the type of thing that you want to focus on the best way that you can.
Otherwise, a lack of funding and maintaining the right cashflow can be incredibly tricky to do. And when we talk about a new business, that can be the difference between growing and achieving great results, or just dealing with innate problems down the line. It can become a make or break situation, even if it might not seem as problematic in the beginning.
Marketing your business
The thing to note about marketing is that you need it in order to grow, and many companies won’t always have that kind of opportunity. And that’s the thing we have to realize here. Marketing and growing a business will always be tricky, but there are ways to do that properly. One of them is to develop a very good brand identity and keep it consistent on all your social platforms.
On top of that, you also want to invest in content marketing and start promoting your offers via that content. You can go even further by utilizing social platforms as a way to inform customers, but also gather feedback and learn what people actively want you to improve upon or change. And yes, there are other things to consider as well.
Supply chain issues
There have been supply chain problems in Singapore, and the issue is not exactly new. With that being said, these have become a little better over the past few years. However, it’s still difficult to find certain raw materials. Importing them can be an option, yet that turns out to be quite an expensive approach. And not only that, you also need to find reliable suppliers, which is a challenge onto its own.
That being said, the sheer fact that you have to invest in a robust inventory management system and hire staff to handle that will bring additional expenses. Thankfully, you can go with alternative sourcing options as well. Working with industry associations can be a solid approach, and it can definitely give you a unique system to surpass all those demanding situations. Plus, we also have to realize that there are new technologies and solutions added to supply chains, which further enhance the process in a very cohesive and professional manner.
You need a local resident director
That can be tricky for some businesses, because not everyone can find or hire a professional within that niche. And not only that, it becomes very challenging for certain companies to expand and grow if they can’t find a local resident director. It’s not as hard these days, as there are incorporation companies that will help you with the process.
However, it’s still a requirement and you have to abide by that. It’s definitely an important aspect that many foreigners trying to learn how to incorporate a company in Singapore tend to forget. But that’s fine, because you will still end up having a significant amount of different options to take into consideration. There are a lot of compliance requirements and if you can’t find a local resident director, that will be an issue onto its own.
Acquiring a license can be difficult
It might not be the case for all niches, but one of the common Singapore company incorporation challenges is that some businesses can’t really get a license. That’s a problem for them and it only makes things worse because you can’t identify the right solution that will deliver good value in these situations. With that being said, the process of getting a license can be very long and sometimes it’s even prolonged by some back and forth with the authorities.
Is it mandatory to get a license when you incorporate your company in Singapore? Not all niches have this, but import licenses, health products, foods, capital markets, private schools, even travel agents will require a license. So it certainly narrows things down to the niche, but for the most part, getting that license is important and it will end up pushing your business in different directions. That’s certainly a thing to keep in mind with this type of situation.
Opening a bank account
Even opening a bank account and handling financials can be a bit tricky here. The thing to note is that you need a registered legal entity in Singapore in order to open a business bank account. Then you also need to share necessary documents like ID, proof of address, a description of the business activities, documents submission is also necessary, along with directors and signatories that need to be present for the account opening.
That shows it’s an entire process, and not something very simple. It can deter some foreigners from doing this, but you can work with an incorporation business that will be able to handle some of these challenges and concerns that can sometimes arise.
Long working weeks
On average, people in Singapore are working 45 hours a week, so a bit more than the average people in the US or Europe. That does add more challenging situations when it comes to incorporating, because you need to figure out what type of working hours you need to go for. And while there are demanding challenges, the situations that appear also have their fair share of problems.
Plus, you have to figure out the legalities regarding this process, while also navigating the work-life balance problems that can sometimes arise in these situations. The strictness of certain situations and concerns here can be quite struggling for a lot of people. There’s definitely value to be had regardless, but the outcome can be harder to achieve especially due to various technicalities and legal loopholes.
Tax compliance
The tax rate is 17%, which is way lower than the number it was even 20 years ago, at that time the tax rate was 26%. So the taxes in Singapore have been dropping quite a bit, which is great for the people that want to live there. It’s just as appealing to run a business. However, the tax compliance is very strict and if you don’t comply with those tax regulations, there are harsh sanctions.
It’s also important to understand that there are no restrictions when it comes to the tax compliance and regulations. That’s a challenge for certain niches, and it can be one of those things that will be difficult to handle, especially in the beginning!
Depending on the niche, you can also end up with different taxes as well. And even the process of registering for a SingPass to access the IRAS and getting an option to pay corporate taxes can be very difficult most of the time. With that being said, there are certain tax breaks and lots of payment methods to help streamline the process.
Trading across borders
If you want to know how to incorporate a company in Singapore and also trade beyond borders, that alone will end up being quite the struggle. That’s because even if Singapore is a global trading center, the government has certain restrictions when it comes to various goods. With that being said, you might need to receive a special license, or you will have to pay the GST or duty when you import something. It’s not as easy to import stuff from outside the country. It makes sense, because Singapore, like any other country, tries to focus more on local production.
These are only a few of the different Singapore company incorporation challenges that can arise. Every business will face a variety of challenges itself, but at the end of the day, the main focus is always on consistency, quality and a really good experience. With that in mind, it’s still a good idea to work closely with a team of experts who can provide support and assistance during these times. It’s a great opportunity to focus on results, and in doing so, you will have a much better ROI. Use that as an advantage, and you will be amazed with how much it can help surpass any incorporation challenges in Singapore!
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