Singapore is considered a business hub because it features as one of the top business-friendly countries of the world. If you are an entrepreneur and have a tech-startup idea, Singapore is a great country to start with. Singapore Economic Development Board (EDB) has declared a Tech startup program in Singapore.
This program encourages all the entrepreneurs to base their startup companies in Singapore. Hence, in this article, we cover all the basics of the things you should know before going through the process.
The Singapore government plans to transform Singapore into a tech hub for important technologies. This is conducted under the Smart Nation Initiative. The Singapore government has also launched Digital Economy Framework for Action that includes following strategies:
- Economic growth acceleration through the digitalization of businesses and industries.
- Establish a highly competitive tech ecosystem
- Developing an Info COMM Media sector on which the Digital Economy can grow and thrive.
Additionally, Singapore offers a corporate tax rate of flat 17%. The Startup companies receive tax exemption of up to 75% of the first $100000 income. With the second income of $100000, 50% of tax exemption becomes applicable.
Want to start a tech-business in Singapore?
Following are the key factors that you should take care of while trying to establish a startup in Singapore:
- Studying basic market trends and research
- Current competition levels
- Funding availability
- Ownership/shareholder details
Let us understand each of the above-mentioned aspects in detail:
1. Studying basic market trends and research:
Singapore is a quirky place to be for a startup and entrepreneurs. The country is a huge hub for the PropTech industry. But so many companies are just portal websites and very few actually have site developers. Therefore, a tech startup in this situation can connect with the agencies instead of builders.
About 81% of Singapore citizens do not have their own private property. However, the home ownership rate is around 91%. This is an important fact that tech startups should consider.
Singapore is known as a tech and a financial hub. A high percentage of senior citizens are comfortable with Robo Advisors. This could be huge for FinTech companies.
If you are an EdTech startup, you will face a significant amount of competition in the industry. Hence, you need to have a lot of innovative ideas. Therefore, before launching your startup, it is advisable to study market trends for your industry.
2. Current competition levels:
Singapore boasts of having the most competitive economy that has overtaken Hong Kong and UK. The government agencies encourage competitions to eliminate cartels and monopoly.
Singapore recently announced its commitment to defy the wave of protectionism. Therefore, your startup will never face discrimination compared to existing companies.
The Intellectual Property Protection law, declared in 2019, ensures that companies have healthy competition. This law also ensures that the new companies also receive protection. But it is advisable to get a patent for any new ideas the entrepreneur may have come with.
To survive in the market, you should conduct a SWOT analysis of your idea. Ensure that your idea is unique and marketing it can help it survive in the Singapore economy.
3. Funding availability:
Singapore has 117 foreign banks with 6 local banks. You also get tax deductions if you are an Angel investor. You would be eligible for tax benefits if you are Venture Capitalists Funds.
Regardless of whether you need a third-party investment or a paid-up capital, Singapore is the right Asian country to start. The Singapore government also runs the Startup SG Equity Scheme. Under this scheme, the government offers to co-invest with selected third-party investors.
These options encourage the budding entrepreneurs to start their own company in Singapore. Additionally, for direct aid, the startups can contact Enterprise Singapore for help.
4. Ownership/shareholder details:
The Shareholder Agreement (SA) is an important factor to consider within any startup. This defines the rights and obligations on the shareholders’ part. While it is not a compulsion to have this document, the benefits of holding one are innumerable.
One of the huge benefits of this is protection from the share dilution. If your company issues more shares than necessary, your ownership over the company is diluted.
With SA documentation, there is a fair judgment towards the investor. The document defines the company’s goals and direction in the market. This kind of information ensures that everyone knows whether they should be investors.
The basic process of setting up a business in Singapore is pretty straightforward. But certain aspects of it can seem challenging. Hence, having information beforehand can seem helpful. This information can help you kickstart your company smoothly and effortlessly. if you need any help We are the providers of the best Singapore Company registration services.