Registering your IT business in Singapore: what should I do?

Hello colleagues!



My past material was criticized according to two criteria: the authorship of the quote was incorrect and the error associated with the selection of the picture. Therefore, I decided, firstly, to conduct an educational conversation with a photographer. And secondly, carefully check the statements used and, importantly, if necessary, slightly change them, so that they would not accuse me of not knowing English either.



That is why the originally planned second part of the title “What can I do” (by Alan Silson, performed by Smokie) had to be redone to “What should I do”, since “I can” and “should” are completely different verbs, and the second is much more correct in the context of the topic of the article than the first. For everything else, including the practical usefulness of the material, the accuracy of the facts and algorithms of action, I bear full responsibility to the readers.

Do I need it?

The obvious answer to this question: “Of course, because Singapore is the key to the economy of the entire Southeast Asian region,” it will not be entirely correct. The fact is that this jurisdiction provides extremely favorable conditions for doing business, but the cost of the entry threshold is far from being in all options (and there are quite a lot of them) will be acceptable. However, if you want and willingness to certain compromises to find a budget option is quite realistic.



I will explain with an example. Actually, the costs of registering and maintaining the functioning of the company in Singapore are slightly lower than in many other developed countries. Therefore, working without creating Substance (i.e., actual presence) will not require significant investments. Another thing is that the long-term prospects for such a business structure will not be very bright. But a full-fledged office and staff working all week is really expensive.



In other words, you have to choose between a compromise budget option with some shortcomings and a full-fledged Substance - with others. But in any case, the prevailing online misconception that business in Singapore is very expensive can be successfully carried out on a well-deserved and decent vacation.



And now - another consideration that is directly related to the answer given in the subtitle. You write excellent and optimized code. You are thoroughly versed in the architecture of modern programming languages ​​(C ++, Java Script, Python, Ruby, PhP - underline what you need). Build unique algorithms in your head. Always find custom solutions that use hidden resources of the OS and processor? Great, I'm glad for you. All these talents - important, relevant, useful - cannot guarantee you success.



I allow myself to develop the idea: success in the Singapore market itself is not particularly important and necessary for you. Forget about it, there are things much more significant. A seditious affirmation, for which relies rods and a link to Siberia? Not at all. The Singapore market itself, in addition to being highly competitive, is very small. This jurisdiction is valued not so much for potential business opportunities (although they, of course, should not be discounted), but for its reputation in the business world. In other words, opening a business structure in Singapore, you order and pay for a powerful advertising company for your products in the global market. This idea, of course, is very crude, but it conveys the essence of the idea perfectly.

Phase number 1. And talk?

The mentality of a person born in any of the countries of the former USSR lies in the fact that he first delays any important steps to the last, and then, when all the deadlines have already passed, he begins to act. The situation analysis stage is usually not included in this chain, because of which, in 99%, the life path of a business structure is very short. Therefore, I suggest that you familiarize yourself with the recommended course of action, which has proved its effectiveness. However, if you are used to going your own way and stepping on the same rake over and over again, I will not object. After all, everyone chooses for himself ... (Yuri Levitansky).

Choosing an intermediary

To begin with, I’ll note that it is precisely the selection of a specialist who will represent your interests and deal with all organizational troubles, because you can’t physically perform some stages on your own. At a minimum, this applies to approving the name and filing of securities in ACRA (Office of Corporate Regulation and Accounting). To do this, you need a resident of Singapore with the appropriate authority.



It is extremely difficult to do without it even if your company has experienced and qualified international lawyers, and at least one of them must be a resident of Singapore. An independent attorney will cost you some money. So, for an all-inclusive service, my company takes a little more than 8 thousand USD. But in return, the client gets the opportunity to delegate all the efforts to the specialist and not think about the risks associated with the refusal of registration, as well as expert support and many additional services. It seems to me that this approach justifies the insignificant (by appropriate standards) costs.

Name Reservation

The main requirement is the originality of the name. Try to distance yourself as far as possible from the combinations known to everyone, because in this case, with a high degree of probability, you will be crushed by lawsuits from copyright holders. Take for example the Linux distribution with the pretty name LindowsOS. As you might guess, the project was oriented (let it land him digital fuzz in the FreeSpire world) for better compatibility with Windows.



In 2002, what we are talking about happened. The company received a lawsuit from the Redmond giant for the consonance of brands, but two years later, Microsoft executives chose to settle the matter with the world and offered $ 20 million as compensation ...



Note that for reliability it makes sense to prepare for the registrar several options for names (in case one is busy or rejected). But the services that check the originality, it is better not to use, because their creators will not give you any guarantee.

The structure of the company

First of all, it is worth deciding on the legal form. This may be Company Limited or Limited Liability Partnership - a company or, respectively, a partnership, but both options involve limited liability. Note that the Company form has several types: Private, Public, Limited by shares, Limited by guarantee, etc.



It is difficult to say which option is right for you, without an additional in-depth analysis of all the inputs. One should take into account the current tax climate, the requirements of external sources of financing, the number and type of shares issued and many other factors, some of which are by no means on the surface.

Officials

To be at the helm of your own company is very tempting, but this option is far from always the best. The fact is that one of the directors must be a resident of Singapore. An important clarification: one, but not necessarily the only one. Your further actions will depend on whether you are ready to move to Singapore.



If so, feel free to stand at the helm. But remember that you will have to take care of obtaining a visa in advance and come to terms with the fact that information about your modest person as a beneficiary will be transmitted to the Federal Tax Service. And this factor in many cases is undesirable.



If you are not ready to move yet, or if you don’t want to “shine” in the Russian Federal Tax Service, you will need the services of a nominee director. Fortunately, Singapore law provides for such a scheme. You will also need a secretary (in fact, a business manager). He must be a) solely an individual and b) a resident of Singapore. Note that prior to the registration process, the secretary will be required to sign a standard form 45B (Companies act, section 50, section 173) and to document the consent to take the position, as required by the Companies Law.

Legal address

Initially, I planned to convince you that real success and the ability to communicate “on a short leg with the powers that be is the prerogative of a full-fledged Substance. With a classic office, a good coffee machine and a pretty young secretary. And various compromise options, many of which, by the way, do not work at all in modern realities (subscriber boxes, dummy addresses, etc.) - this is the road to nowhere.



But then I realized that the attributes of a “beautiful life” (excuse me, a solid business) are not yet a success. If your product or service "shoots" if customers like them and they want to buy them if they try to copy them - this is success. The program itself can be written by a group of freelance programmers. In the end, the lack of a full-fledged office with all the necessary attributes did not prevent Steve Jobs, Steve Wozniak and Ronald Wayne from starting Apple.



Friends, please do not confuse the attributes and true values. The first without the second is not useful and in the most negative way affects the existing budget. Believe me, it is possible to wipe your nose with the great of this world with minimal costs, which we spoke about at the beginning of this section. It is quite possible! However, many readers disagree with me.

Constitution

This document has nothing to do with the basic law of the state (in Singapore it was adopted back in 1965, the latest additions - in 1996). In this jurisdiction, it means a set of rules that includes the company’s charter and memorandum that previously existed independently of each other. The relevant changes have been introduced by global amendments to the Companies Act.



The document should indicate (the most significant points):

• Authorized capital
• Registered Address
• Name of Director
• Legal form

A typical charter can be found on the Internet, but no one will give you any guarantee that it meets all modern requirements. Therefore, I recommend visiting the official website of the regulator ( ACRA ) and download the current version from it.

Bank selection

You will have to choose a financial institution for services on your own, because at the same time circumstances that are difficult to describe in words will often be taken into account. I will tell you about the advantages and disadvantages of working with both Singaporean and foreign banks, after which I will try to choose the best option.

Preparation and planning phase

Usually, my employees once again discuss with the client all the details and only after that the direct preparation begins. The procedure itself will include:

• Company registration.
• Entering data into the IRAS register (Inland Revenue Authority of Singapore, Internal Revenue Office of the Internal Revenue Service of Singapore). I’ll clarify that a personal account will be created automatically.
• Opening a corporate bank account.
• Obtaining the necessary licenses and permits. They may, for example, be needed to launch a payment system, issue electronic money, trade (import and export) and some other activities.
• Final preparation of all documents.

Phase 2. registration

If my experts were involved in your business (after all, you will not begin to take risks and try to open a company yourself?), There should not be any problems. The package of documents will be transferred to ACRA (via the standard BizFile channel). The approval process takes no more than 3 days, although in most cases everything happens online almost instantly.



But I want to clarify that it is too early to congratulate yourself on the success and uncork champagne (or what do you prefer to drink there on major holidays?). We all worked hard, but the result achieved is only part of the matter, albeit the most difficult.

Phase 3. Additional activities

The main task to be completed is opening a bank account in the chosen jurisdiction. In Singapore, the procedure will require your personal presence, in other countries (for example, in Switzerland) you can do without this. But remember that choosing a bank is an extremely responsible step that does not endure fuss.



What remains to be done if you are aiming for a real substance and an actual presence in a jurisdiction (for an important note, see below):

• Register for GST (an analogue of domestic VAT, which our businessmen “love” so much).
• Filing an application for employee work visas (including yours, if you decide to take cover at first for a nominal service).
• To receive additional financing (state grants and subsidies, including those specialized for the IT segment).
• Actual obtaining of additional licenses, which we discussed at the previous stage.
• Staff recruitment. I’ll especially emphasize that local business is extremely wary of commercial structures in which offices use the English language of the format “London from the capital of Great British”. Colleagues, I highly recommend training staff, otherwise you will be waiting for new clients right before the second coming.
• Arrangement of a digital office. You will need a stable and high-speed communication channel, a meeting room and trained personnel. I also remind you that it is highly desirable to get a coffee machine, office equipment and a pretty secretary. With the last paragraph, alas, I can not help you.

Attention! The described activities are necessary only when you plan to fully work in Singapore. If compromise options are used (outsourcing, freelancer services, etc.), you can do without them!

Instead of an afterword

I tried to cover as much as possible all stages of the registration of a new business structure in Singapore, but not to burden the text with endless transfers, prices for services, options for circumventing difficulties and other information that would be useful if the company was independently opened.



You may not agree with me, but I still allow myself a categorical statement: without expert support, you will only waste your time and money. And then, when neither one nor the other is left, say that Alexandra and her portal are a bunch of lovers who just want to sell the service. No and no again. We strive to ensure that domestic business receives a permanent residence in Singapore, and this work requires considerable qualifications and experience.



Yes, you write excellent code, want to promote original and sought-after IT services, or are ready to show new digital wonders to the world (probably that was what Steve Jobs thought when he proposed the iMac user community in 1998, which became a symbol of Apple’s rebirth). But the company must be registered by professionals who are ready to guarantee quality.