Singapore is a Sovereign Republic Island city state; its legislation is based on the English Common Law. The Prime Minister is the head of the executive branch, forming the Government. 1 As per April 2012 estimates, Singapore had a total population of 5,2 million in 2011 2 ; however, about 25 percent of the total population consists of foreigners. The country has four official languages: Chinese (35 percent), English (23 percent), Malay (14,1 percent) and Tamil (3,2 percent).
The country possesses the best road, water and air transportation system in the world. 3
The country has a free market economy, and its per capita GDP (PPP) is higher than that of numerous developed countries such as the US, Ireland, Hong Kong, the Netherlands and Canada. 4 The economy is extremely export-oriented, with its main export industries including consumer electronics, information technology products and pharmaceuticals. 5
The total GDP at current market prices was EUR 186.752 million (SGD 326.832,4 million) in 2011. About 70 percent of the total GDP at current prices was contributed by the service industries, including transportation, wholesale and retail trade, hotels and restaurants and financial services.
The country’s Gross National Income at current prices increased 6,9 percent year-on-year and reached EUR 120,790 million in 2008.
Also, the total Official Foreign Reserves of the country reached EUR 176.221,6 million (SGD 308.403,2 million) in 2011 and the total export value in 2011 was EUR 294.123,1 million (SGD 514.741,2 million). The value to the total items imported by the country in 2011 was recorded at EUR 262.646,9 million (SGD 459.655,1 million). 6
As per the World Bank report of ‘Doing Business 2009’, Singapore ranked first in the world for the ease of doing business. As per the World Bank report Doing Business (2012), Singapore ranked first in the world for the ease of doing business. As per the Globalisation Index 2011, Singapore ranked first in the world for foreign trade and investment. The Global Competitiveness Index rankings of 2007–08 revealed that Singapore is also the most competitive country of Asia and the fifth most competitive nation of the world, lagging behind the US, Switzerland, Denmark and Sweden. 7
This section discusses the common investment vehicles available to foreign investors, the procedures to be followed in order to establish them and related regulations for each investment mode.
Table 1 lists the most common modes of setting up businesses by foreign investors and the legal procedures and implications involved in each process.
Source: Enterprise One (One Network for Enterprises)
There are two general modes of establishing a business in Singapore, as a new business or company, or as a foreign business. The following discussion throws light on the five types of business structure specified under the first category.
A sole proprietorship is the simplest form of business. The characteristics for this business structure are:
It is owned by a person or a company;
It is not considered as a legal entity;
Profits are taxed at a personal income tax rate.
Except in some cases such as undischarged bankrupts, any person or company can register as a sole proprietorship in Singapore. In case the owner is not an “”ordinary resident””9 of Singapore, he/she is supposed to appoint a local manager. All sole proprietorships must be registered with the Accounting and Corporate Regulatory Authority (ACRA).
To appoint a local manager, in case none of the owners registering is an ordinary resident of Singapore;
To check the availability of the business name to make sure that it is not identical to an existing entity, obscene or reserved one. One can check its availability in the online directory of businesses on Bizfile;
Correct Singapore Standard Industry Classification code (SSIC) is required at the time of registration. It can be searched on the ACRA website. One can also seek assistance by calling the ACRA HelpDesk at 00 65 6248 6028 between 7am and 12 midnight, Monday – Sunday (including public holidays);
To provide a local address for the place of business in Singapore to be approved for business use by the Urban Redevelopment Authority (URA);
To ensure that Medisave contributions are up to date with the Central Provident Fund Board (CPF Board). This can be done by using NETS/cashcard, cheque, cash, e-payment etc. The amount to be paid can be judged by logging into Central Provident Fund Board. A unique Singpass, required to login to CPF account, can be obtained online at Singpass.gov;
Lastly, Online Business Licensing Service (OBLS) can be used to collectively assess the licences and permits required to be obtained and register business. An application form from Bizfile. gov can also be downloaded to register.
A partnership refers to a business firm owned by more than one individual or company. In Singapore, a partnership cannot have more than 20 owners, and must be registered with the ACRA. The main characteristics of this business structure are:
It can have a minimum of 2 and a maximum of 20 owners;
The profits form a part of personal income of partners and are taxed accordingly.
The steps to register as a partnership are the same as those for a sole proprietorship (detailed in section 2.1.1). In case of a company, there must be at least one director who is above 18 years of age and is either:
or a Singaporean Permanent Resident;
or an Approval-in-Principal Employment Pass holder;
This form of business structure was introduced in Singapore in April 2005. All LLPs must be registered with ACRA. The main characteristics for this business structure are:
It has limited liability features of companies and a rational flexibility of partnerships;
It can have a minimum of two partners without any upper limit;
In case of an individual partner: personal tax rates would be applicable and a corporate tax rate would be valid in case where a partner constitutes a company.
The steps to register as an LLP are the same as those for a partnership (detailed in section 2.1.2).
A limited partnership (LP) does not have any separate legal entity. The partners who do not manage operations of an LP have limited personal liability. The main characteristics of this business structure are as follows:
The partners in an LP can be individuals, Singapore registered companies or unregistered foreign companies;
At least two members should be present in the LP. Among the partners, there should be one general partner and one limited partner;
A general partner has unlimited personal liability and can be appointed as the manager of the partnership;
The liability of a limited partner is restricted to his/her investment in the partnership;
An LP can be formed through registration of a new LP only, and cannot be formed through converting a company, business or Limited Liability Partnership;
The partners have to pay taxes on their share of income from the LP. The individual partners pay tax at personal income tax rate while corporate partners pay tax at the corporate tax rate.
An LP is registered with the ACRA. The registration steps are similar to those of the sole proprietorship detailed in section 2.1.1 above.
A company is a business entity registered as per the Companies Act. A company has the following characteristics:
A company is a separate legal entity;
The owners of a company are its shareholders;
Each shareholder should have at least one share;
The profits of a company are taxed at corporate tax rates.
Three types of companies can be incorporated in Singapore. They are briefly outlined below:
Private/public companies limited by shares;
The liability of companies limited by shares is restricted to their share capital. A private company can have a maximum of 50 shareholders;
Public companies limited by guarantees;
Non-profit, religious and charitable organisations are usually formed as the public companies limited by guarantees. Such companies do not have any share capital;
Unlimited companies have no limitations on their membership or liability.
A company has to be registered with ARCA. The steps followed for registration of a company are similar to those of the sole proprietorship. The following is the procedure for registering a company:
The eligibility requirements below must be met:
The company name has to be decided on. The name should not be identical to any entity already established or liable to be considered as vulgar or obscene. The name should not be reserved.
The company should find the right Singapore Standard Industry Classification code (SSIC) applicable as per its business activity. The SSIC code can be searched through the website of ACRA – SSIC Code.
The company should have a local address for the business place. The company can operate its business from premises approved by the Urban Redevelopment Authority.
A company has to apply for the right licence and permit. The website Oneline Business Licensing Service provides information about the right licence and permit and other related requirements to be met before registration.
The registration can be done independently or through any professional service firm. The procedure to be followed for selfregistration is provided on the website EnterpriseOne – DIY or Self-Registration.
A foreign business entity can be set up as a branch of the foreign company or Representative office in Singapore. This procedure is outlined below.
Procedure for the registration of a Branch of a Foreign Company:
As per the Companies Act, the foreign company must appoint two local agents residing in Singapore. The local agents act on behalf of the company;
The company should engage a professional firm or service bureau for assistance in preparing and filing the application for registration;
The company name should be approved if it is available.
The Branch office can be registered through the website Bizfile.
The applicable fees for registration formalities include the following:
A company is normally incorporated within 15 minutes of its registration. However, a longer duration of 14 days to two months may occur if the application requires approval from various referral authorities. The list of referral authorities for different business activities can be accessed through this link: ACRA – Referral Authorities Table.
A company can use its representative office (RO) to carry out only the following activities:
Acting as a liaison for the parent company
If a company wishes to set up its RO for banking and insurance activities, the registration authority is the Monitory Authority of Singapore (MAS).
The following steps are required for the registration of an RO with MAS:
An application is made by the Chief Executive or equivalent position holder of the bank or its Singapore office, if operating.
The application is addressed to the following person:
The application form can be downloaded from the link MAS – Application to Set Up Representative Office.
If the company wishes to set up its RO to carry out business activities other than banking and insurance, it should complete registration through International Enterprise Singapore (IES). The following steps are required for the registration of an RO with IES 14 :
An online application is made through the website of IES.
The following documents must be submitted with the application:
If the company does not have digital copies of the required documents, the applicant can submit a hardcopy of the documents at the head office of IES.
The applicant has to pay a processing fee of EUR 114,3 (SGD 200) by cheque, bank draft or credit card.
The cheque or bank draft can be mailed to the following address:
Singapore has an extremely open investment environment. The Economic Development Board of Singapore acts as an investment promoting agency that focuses on securing major investments in high-value manufacturing and service areas to replace the labour intensive activities which have moved to offshore nations.
The following are general characteristics of the foreign investment policy of the country:
The foreign investors are not bound to enter into joint ventures or surrender their managerial controls to the local people;
The local and foreign investors are subject to the same law;
The government has limited or restricted investments in some sectors;
The screening of investment proposals is done with the objective of determining the eligibility of the proposal for the incentives;
There is no restriction on the transfer or repatriation of profits or capital to overseas nations.
The restrictions on foreign investment exist for some of the sectors mentioned below:
Telecommunications – SingTel imposes certain uneconomical technical interconnection requirements, making the operations by overseas companies expensive. The companies of overseas operators face problems in accessing inter-exchange ducts. Also, the decisions made by Infocomm Development Authority and the Ministry of Information, Communication and Arts are not published in detail, which results in the lack of transparency of the rules and regulations governing the telecommunications industry.
Media – Section 44 of the Broadcasting Act restricts the foreign investor’s ownership in the companies’ broadcasting to the domestic market of Singapore to 49 percent or less, with some exceptions. The individuals cannot hold more than 5 percent of shares in a broadcasting company without the Government’s approval.
Banking – Legal differences exist between the foreign and Singapore banks and the kind of licences issued to the foreign banks and local banks. A foreign bank can hold three types of licences—full service, wholesale and offshore. The banks operating on offshore licence can upgrade to the wholesale licence on fulfillment of the criteria set by the Central Bank, the Monetary Authority of Singapore.
Securities and Asset Management – The Government of Singapore removed restrictions on trading by the foreign-owned stockbrokers in 2002. However, foreign investment is not allowed to exceed more than 70 percent of the paid-up capital of the dealers who are members of the Singapore Exchange.
Legal Services – There is a restriction on foreign firms preventing them from practising Singaporean law and hiring lawyers from Singapore to practice Singaporean law or litigate in the Singaporean courts.
Engineering and Architectural Services – Singapore removed the restrictions requiring that the chairman and two-thirds of the board of directors should be engineers, land surveyors or architects, and they should be registered with the local professional bodies.
Accounting and Tax Services – The law requires that at least one partner in the public accounting firm should live in Singapore. The public accountants who hold membership of the Institute of Certified Public Accountants of Singapore and who are registered with the Public Accountants Board can only practice in the country. However, the accountants registered with the American Institute of Certified Public Accountants are also recognised by the board.
Real Estate – As per the Residential Property Act, the foreigner can own condominiums or any unit in a building of at least six levels without prior approval of Singapore Land Authority. However, landed houses and apartments in the buildings with less than six levels can be purchased only after Singapore Land Authority’s approval.
Energy – A US company faced issues in its access bid due to delays in review of its applicant by the Energy Market Authority. No non-incumbent operator has been able to secure access to Singapore’s part of the Sumatra-Singapore pipeline.
A number of legal formalities have to be followed before the actual setting up of a company. The formalities include registration, licencing, requirement of minimum capital, etc.
Table 2 lists the data released by the World Bank related to starting a business Singapore.
Source: The World Bank Group – Document: Doing Business 2012 Singapore
Figure 1 illustrates the obstacles inherent in starting business ventures in various countries.
Source: World Bank 2012 Doing Business
The following documents are required by a person who enters Singapore:
Passport valid for at least six months
Adequate funds for the duration of stay in the country
Confirmation of the onward or return air ticket
The countries requiring a visa for entering Singapore have been divided into Assessment Level 1 and Assessment Level 2. These are shown in the following table:
ICA – Nationals of Assessment Level I Countries; ICA – Nationals of Assessment Level II Countries
The list of nationals included in the Level 1 and Level 2 assessments include the holders of the following documents:
ICA – Nationals of Assessment Level I Countries; ICA – Nationals of Assessment Level II Countries
A person can apply for a visa online through a local contact via the website of Submission of Application for Visa Electronically (SAVE). The local contact uses a Sing Pass account for making the application.
Otherwise, the application can be made overseas through the nearest Singapore Overseas Mission.
A business visit visa is issued to a person who visits Singapore to attend business discussions or negotiations.
The following documents are required while applying for a visa for business visit:
A recent passport size photograph must be pasted on the top right corner of the application form 14 A. The photograph must meet the following requirements:
A copy of the applicant’s passport identity page;
The passport should be valid for at least six months from the date of entering the country;
Checklist 4 must be attached to the form 14A;
Form V39A (Letter of Introduction for Visa Application) duly filled in by the applicant:
The computerised copy of the Singapore registered company’s profile should include the names of the directors and partners in the company issued by the Instant Information Service, Accounting and Corporate Regulatory Authority no later than three months from the date of application.
A social visit visa is issued to a person who comes to the country to meet family, friends or for travelling purposes. The documents required for this visa type are similar to a business visit visa up until checklist 4. (Explained in section 3.1.1 above).
The additional documents required for application are detailed below:
The original and a copy of the local contact’s Singapore Identity Card;
Form V39A (Letter of Introduction for Visa Application) duly filled in;
The requirements for a person to act as a local contact are similar to those explained above in section 3.1.1;
A person belonging to the countries in Assessment Level 1 should also submit the following additional documents: 18
The documents required for obtaining a visa for medical treatment are similar to the business visit visa up until checklist 4. (Explained in section 3.1.1 above).
The additional documents required for application are detailed below:
A supporting letter issued by the hospital including the purpose of visit and the medical condition of the applicant;
Form V39A (Letter of Introduction for Visa Application), duly filled in, is to be submitted if the applicant has not selected the hospital for his/her treatment in Singapore;
The requirements for a person to act as a local contact are similar to those explained above in section 3.1.1.
If a person belongs to a country included in the list of Assessment Level I countries, the following documents are required while applying for a visa for medical treatment: 20
One recent passport-size photograph. The photograph should show the full face of the applicant, it must not be more than three months old. The photo should be in colour and taken with a white background;
The applicant can be requested to present additional documents if necessary;
Documents should be in English language; otherwise an official translation of the same documents has to be submitted.
The multiple journey visa is suitable for business executives who need to visit the country multiple times in a short span. The holder of a multiple journey visa can stay in the country for 14–30 days per visit, depending upon the mode of entry in the country. The visa may be issued for a period of one, two or five years as per ICA policies.
The following persons are issued a multiple journey visa:
Those who visit the country for business purposes or for making investments related to their business;
Those who visit the country to explore investment or business opportunities;
Candidates aspiring for a visa to enter Singapore have to follow the following procedure:
The person should obtain a Letter of Introduction (LOI) issued by a Singapore-registered company. The following documents are submitted with the LOI:
Form V39A filled in by a Singaporean company and Form 14 (application for a visa);
Form V52 filled in by a Singaporean company and giving details of the visit;
An extract issued by the Accounting and Corporate Regulatory Authority, including the business profile of the company;
Copy of the bio-data and the last three pages of the passport, in case the application is submitted at Immigration and Checkpoints Authority in Singapore.
The completed forms and above documents have to be submitted at the ICA office in Singapore or the Singaporean mission overseas, if the application is made abroad.
The pass is suitable for the entrepreneurs aspiring to study the business opportunities in the country for a long duration. The entrepreneur is allowed to leave the country and re-enter on a Long-Term Visit Pass (LTVP).
The applicant should meet the following eligibility criteria while applying for an LTVP:
The applicant has to present the proof of a project-plan for an emerging business in Singapore or the existence of a Singapore joint-venture partner;
The applicant should be a representative of a parent company that has a good track record and enjoys global presence or wants to expand globally.
The pass is granted for a maximum duration of six months.
Application form – Letter of Support issued by the Economic Development Board (EDB).
A write-up with the following information:
After receiving the Letter of Support from EDB, the applicant should submit the application for Long Term Visit Pass (LTVP) Immigration and Checkpoints Authority.
The requirement for the two-week collective gratis visa issued to People’s Republic of China (PRC) group tours can be accessed through the website Immigration and Checkpoints Authority – PRC Group Tours.
The requirements for the visa issued to the Cruise Passengers in Singapore can be accessed through the website Immigration and Checkpoints Authority – For Cruise Passengers in Singapore.
The following people are eligible for permanent residence permit in Singapore:
The spouse or unmarried children of a citizen of Singapore or permanent resident of Singapore. The age of unmarried children should be less than 21 years;
Elder parents of the citizen of Singapore;
The following documents are required when applying for permanent residence in Singapore:
Documents required for the spouse or children of a Singapore citizen or permanent resident of Singapore:
The list of supporting documents required can be downloaded from the accompanying notes to Form 4.
Documents required for the Aged Parents of a Singapore citizen or permanent resident of Singapore:
The list of supporting documents required can be downloaded from the accompanying notes to Form 4.
Documents required for the holders of P, Q or S work pass:
Two sets including one original and one photocopy of the duly filled in form 4;
The list of supporting documents required can be downloaded from the accompanying notes to Form 4.
Procedure for the Investor or Entrepreneur:
The investor or entrepreneur can apply for permanent residence at the office of the EDB as per the provisions of the Global Investor Programme.
EDB Address:
Singapore Economic Development Board
250 North Bridge Road
#28-00 Raffles City Tower
Singapore 179101
Tel : + 65 6832 6832
The following are the types of work permit schemes available to foreigners:
Work Permit for foreign domestic worker
Each of the work passes is briefly described below:
Foreign professionals and executives willing to work in Singapore can apply for an EP. These are available for foreigners who earn a fixed monthly salary of over EUR 1.714,2 (SGD 3.000) and possess recognised qualifications. For details on the recognised qualifications, please refer to the website MOM – Recognised Qualifications.
The EP has three categories, namely P1, P2, and Q1. These pass types have different salary and skills requirements which are described in the table below:
The application for an EP can be made online through the website EP Online.
The payment for online applications can be made by Visa card, MasterCard or eNETS Debit.
A person who wants to manually apply for the EP has to fill in the EP Application Form and submit it with the administrative fee at a SingPost Office.
The form includes a list of occupations, and the form should follow the names as they are provided on this list. The list of occupations has been included in the following files:
Occupations starting from A – I List of Standard Occupation
Occupations starting from J – R List of Standard Occupation
Occupations starting from S – Z List of Standard Occupation
The PEP is granted on the basis of an employee’s skill set. If the holder of a PEP leaves his/her current job, he/she can remain in Singapore for a period of up to six months to search for another job opportunity in the country. The PEP pass is valid for five years.
The following persons are eligible for a PEP:
Foreign professionals whose last drawn fixed monthly salary was not less than EUR 3.999,8 (SGD 7.000). The salary should pertain to a period of six months prior the date of application.
Former P1 Pass holders living overseas;
Foreigners graduated in the institutions of higher learning in Singapore:
The application can be made online by holders of a Singpass through the link PEP Online. The administrative fee for the pass is EUR 11,4 (SGD 20).
Foreign professionals working overseas have to submit the form manually.
Foreign mid-level skilled workers earning a fixed monthly salary of more than EUR 1.142,8 (SGD 2.000) can apply for the S Pass. The S pass is based on a point system, with criteria including salary level, education qualifications, skills, job type and work experience.
There is a limit on the number of S passes and Work Permit holders who can be employed by a company depending on the industry of the employer.
An employer who has not previously applied for a WP or S Pass should submit an application for its Industrial Classification.
The industry classification application can be made online through the website WP Online. The online application requires a SingPass.
The manual application for an Industry Classification can be made through the application form for Industrial Classification.
The application for an S Pass can be made either online through EP Online or manually by filling in the S Pass application form. The application fee for an online submission can be paid online using GIRO, Visa, MasterCard or eNETS Debit and the fee for manual application is payable at any SingPost office.
A foreign worker who wants to work in Singapore and earns a basic monthly salary of up to EUR 1028,5 (SGD 1.800) is eligible to apply for a WP.
Steps followed for the application for a WP:
The employer has to apply to the Controller of Work Permits before actually hiring the worker;
The worker should be at least 16 years of age;
The employer should meet certain obligations as described in the Conditions of Work Permits;
The employer can hire a limited number of S pass and WP holders depending on the Industry Classification of their business activities;
An employer who has never applied for the WPs or S Passes has to apply for the Industry Classification prior to the applying for the WP or S Passes.
It is necessary for a company to make a contribution to the Central Provident Fund (CPF) account for its local employees for at least a month before applying for the Industry Classification.
The application for a work permit can be made through the following channels:
For more details regarding the cancellation and renewal of the WP, kindly visit the website MOM Work Permit.
The work permit for a Foreign Domestic Worker is applied by the employer in Singapore. The Work Permit is usually valid for two years.
The obligations of an employer hiring a FDW are explained on the website MOM – Employer’s Guidelines.
The following points are a general guideline for employers considering a FDW: 25
The employer cannot apply for the work permit of a person who visits Singapore on a social visit;
The worker should be from an ‘approved source country’. The approved source countries include Bangladesh, Hong Kong, India, Indonesia, Macau, Malaysia, the Republic of the Union of Myanmar, the Philippines, South Korea, Sri Lanka, Taiwan, and Thailand.
A person applying for the WP as a first-time FDW in Singapore, should ensure that the worker is at least 23 years and less than 50 years of age.
WP Application Form
– The form can be submitted at the SingPost office.
The table below lists the other types of work passes issued in Singapore:
As per the latest survey conducted by the Economist Intelligence Unit (EIU) in March 2009, Singapore is the tenth most expensive city in the world and third most expensive city in Asia. 26
The average monthly rent for an apartment located in the middle of the city is between EUR 314,3 (SGD 550) and EUR 400 (SGD 700). The rent may vary depending on the facilities provided. The monthly rental of a four bedroom house with swimming pool is between EUR 5.714 (SGD 10.000) and EUR 14.285 (SGD 25.000). All food items in raw form are generally affordable for people. On average, EUR 100 are spent by a Singaporean on food per month. The supermarkets in the country however are very expensive. The average cost for food per day for an individual varies from EUR 5,7 (SGD 10) to EUR 8,6 (SGD 15). Clothing and jewellery are also relatively high-priced in the country. Clothing stores sell both imported and locally made apparel. The night markets and hawkers sell low-priced clothes but bulk buying is essential to receive any discounts. The monthly shopping costs of clothes and wares amount to around EUR 171,4 (SGD 300) in Singapore.
Owning and maintaining a private vehicle can be quite costly. Transportation by public transport is a good alternative as the country has one of the best public transport networks in the world. The average bus fare per trip ranges between EUR 0,4 (SGD 0,71) to EUR 1 (SGD 1,80), with the average train ticket price ranges between EUR 0,6 (SGD 1) and EUR 1 (SGD 1,79). Also on average, the use of bus and MRT (Mass Rapid Transit) can charge approximately EUR 57,1 (SGD 100) per month. The cost of medical consultations in clinics is between EUR 17,1 (SGD 30) to EUR 22,9 (SGD 40). However, the range varies depending on the type of treatment required. 27
The following table gives an overview of other expenses generally incurred by expatriates:
Focus Singapore – Cost of Living in Singapore
Singapore has widened from 29,8 percent in the last quarter of 2011 to 32,1 percent in the first quarter of 2012. 28 The average monthly gross rents for Grade A office space recorded a steeper fall of 5 percent in quarter one 2012. 29 The country is developing new office space measuring 770.000 square metres, which are expected to be completed by 2013. As a result of the increase in office space availability, the supply of office space may continue to be higher than demand in the near future.
The social security organisation of Singapore is the Central Provident Fund Board (CPF). The organisation covers needs in retirement, health care, family protection, asset enhancement and home ownership. Under the scheme, both the employer and employee have to make contributions to the plan.
The table below shows contributions made to the CPF for employees earning a wage of more than EUR 857 (SGD 1.500) per month and the allocation of their contributions.
Percentage of Wage Contributed to the CPF and its Allocation to Different Accounts
CPF – Annual Report 2011 – Overview
For details regarding the contribution made by members earning less than EUR 857 (SGD 1.500) per month, please access the website CPF – Annual Report 2010 – Annex D
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