It is almost impossible to meet an entrepreneur who would not want to set up a business in Singapore. It is indeed a lucrative location with all the benefits most Asian countries don’t have. Whether you want to know how to set up a representative office, start a new independent business or buy an existing business, the island state will have answers for you. We can praise it on and on. But does this mean that it is all a bed of roses? Definitely, no! Here are the 10 challenges of doing business in Singapore.
Incorporating a Business
If you are used to doing business with some backstreet papers or without the proper documentation, Singapore is not a place for you. All businesses must be registered upon meeting all the criteria and issued with a certificate of incorporation by the registrar of business. The challenge arises when a person does not want to comply with the simple steps that must be followed.
Common Reporting Standards
This is a relatively new set of measures to which all entities must adhere. A CRS official will register all businesses and subject them to audits. For their part, the entities will have to keep a register of all nominees to be directors and controllers.
The Tasks of Company Directors
As part of the requirements to start a business, at least one director who is a resident of Singapore must be registered. This may not be a problem, but the bigger challenge is their roles. They need to make sure that annual returns are filed and that there is an annual general meeting. Operating in contradiction to this will lead to non-compliance problems.
It may not be a problem particularly if you are good at complying with taxes. However, the IRAS (Inland Revenue Authority of Singapore) officials will be pursuing you if you fail to submit any tax as required. Sometimes, non-compliance may be a result of failure to calculate tax correctly rather than a planned forfeiture of business assets.
The Need for a Work Pass
No matter how much you want to invest in Singapore, you will have to obtain a work pass. They are issued by Singapore’s immigration department, which reserves the right to deny admission. They may decide not to issue you an EntrePass or any other work pass if they feel that you do not qualify for one.
According to numerous reports, Singapore has one of the best workforces in regard to professionalism. But there is one big challenge that is strangling the labor force: a shortage of employees. While this could be solved by foreign workers, the state has stringent measures regulating immigration.
High Operating Costs
As compared to other Asian countries, Singapore has a high operating cost. The rent for shops, electricity costs, internet costs, and labor costs are relatively high. A person who is moving a business from another country will quickly realize this upon arrival to Singapore. While there is nothing a person can do about this, it is important to adopt some cost-saving measures.
No matter where you go, there is a unique culture that people have. Singapore is a multicultural state with the following groups dominating: native Singaporeans, Chinese, Indians, and Europeans. As a business person, you must know how to deal with each of these dominant groups because you will interact with them every day. If you do not realize this, you will always have problems.
In addition to the people’s culture, the state also has a specific work culture. Due to the influence from both the West and East, you will find that most businesses operate with non-written rules that result in a laid-back work atmosphere. You may find it hard to cope with this if you are used to an extremely formal environment.
Singapore may not be much different from many other countries in the world when it comes to working hours. But the world is quickly adopting a flexible work pattern that is moving away from the 40-hour per week schedule. Even though many people now want to outsource to freelancers who deliver finished work within a few hours, Singapore is still stuck to a traditional 5 workdays in a week that run from 9 to 5 each weekday.
By now, you know the challenges you are likely to face when you start a business in Singapore. Start by preparing simple solutions to them for great success.