Why setting up a software company in Singapore is gaining immense popularity and is a great idea to go with? Well, it’s because of the high demand for software in the country. However, almost everyone in the world is using computers so it’s obvious that business related to technology can bring you more significant revenue. The same applies to software companies. However, Singapore is considered one of the most preferred destinations for excellent IT infrastructure and services, and the software businesses in Singapore have great benefits. That is why both investors and developers are seeking to establish a software company in Singapore.
In 2014, for world digital competitiveness by IMD, Singapore has topped the list and left a lasting impression on technology. In addition, Singapore has ranked first in the world economic forum‘s networking readiness index in 2016, 6th in the global cyber security index in 2015 by the United Nations telecommunication union. These most outstanding achievements have made Singapore the second most digitally competitive country worldwide after the United States.
If you have always been passionate about information technology and intending to showcase your skills to commercialize it, then this is the right time to jump into and grab the opportunity by setting up a software company in Singapore. However, it is a straightforward process to set up a software company. This article is all about industry practices, acquiring licenses and permits, and the software Company registration process. These details in the article will be helpful for you in setting up a software company.
If you have adequately implemented each step given in the article to set up a software company, then you might give your business a great foundation and opportunity to generate revenue. Also, you can read additional details on a complete guide to Company registration in Singapore.
Additionally, if you intend to form an offshore company then choosing to refer to the guide on How to Form an Offshore Company in Singapore will make it possible.
What is a Software Development Business?
A software development business is entirely responsible for developing and maintaining computer applications and designs. These businesses use lots of resources in conceiving, programming, documenting, testing, bug fixing, specifying, and designing. The Corporation and public institutions are welcomed to purchase the software as per their own needs. However, the demand for IT products is increasing to a greater extent, which means there will be more considerable demand for software and applications in the future as well.
Singapore is craving to turn into a Smart nation and analyze the IT industry as a backbone of Singapore. This is why adapting and embracing digitization is the essential part of the process, and till now, Singapore has had a more fantastic climate. The more fabulous business environment, excellent infrastructure, and existing connectivity make Singapore a much potential and promising destination for setting up a software company.
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Before you proceed with setting up a software company in Singapore, here are some of the considerations that you need to keep in mind. The primary thing that needs to be considered is to research for the niche. This includes few things like the types of services and products you are looking to offer, the State of the local industries, and several other software company-related details. Along with such, making yourself familiar with the local industry can assist you in forming strategic decisions.
Making Your Break in the Software Development Business
It’s obvious that it is the broader process behind setting up a software company in Singapore. Basically, there are two ways to proceed with setting up a company.
The first thing that you need to do is to consider choosing the type of business. You can choose between the sole proprietorship, Limited liability Company, and Private Limited Company. Every kind of business has its own requirements and benefits, but the process of setting up a company is all the more similar in many ways. However, you will require registering your Company with accounting and corporate regulatory authority to continue operating your business activities legally.
Prior to registering your company, it will be the ideal choice to think about few details like the nature of your business. Besides this, it is essential to establish few details in your business, including information about members, initial investment, partners, liability, funding, income tax rate, and owners. No doubt, it will take time to decide on each thing, provided that every business structure possesses distinct features and requirements.
What is the Registration Process for Starting a Software Development Business?
The other thing is the registration process for the setting up Software Company in Singapore. In terms of the registration process,
Step 1: Choosing a Name for the Company
You will first be required to choose the business name that does not match the existing company name or contain irrelevant and misleading language. However, you also need to consider that the name you choose for your software company does not match the trademark.
Step 2: Article of Association of the Company
The other step involved in the registration process of the software company is that the article of Association of the company needs notarization, drafting, and filing with the accounting and corporate regulatory authority.
However, you also need to look out for the relevant tax authorities in Singapore to register your company for GST and several taxations. Therefore, it might also be a reliable option to connect with a tax expert to maximize the taxable benefits and exemptions ultimately. Once you have fulfilled the company registration requirement, registration of the company will now begin.
The incorporation of the software company can be done in two ways:
The first way is to directly through the government or by the relevant company incorporation service provider. The first way allows you to visit the government-introduced online portal known as Singapore Biz file and fulfill the specified company-related instructions. Irrespective of which company you choose, you need to provide the following given documents:
Step 3: Documents required
- Company name.
- Details about the business activities.
- Directorial and shareholder information.
- Registered address and company secretary details.
The memorandum and articles of association of the company also need to be provided.
Step 4: Provided with UEN numbers
At last, you will also be required to choose the desired business structure for your company. Once all the steps have been successfully completed, it will only take three working days to process. If successful, a unique entity number will be provided. This number will be considered the reference or identifying number that can be used in several government affairs and transactions.
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License and Permits You Will Be Needing
The most important thing in setting up the company in Singapore is issuing the license and permit depending upon the type of business structure. For this step, the regulating body will be the Infocomm Media Authority of Singapore. Acquiring the license or permit from the Singapore government is considered as evidence of approval for conducting a software business in Singapore.
The type of license and permit that needs to be issued will depend on the types of products and services provided by the particular company. The estimated time to process the license or permit to be issued can take anywhere between two weeks to 2 months, based on the type of product or service.
However, it’s always the best option to connect with a reliable lawyer or company incorporation service provider to issue a license or permit for the software company. You can also contact the local municipal office and cross-check with them regarding the license you require for your company. Always remember, it is essential to have a relevant license or permit for successfully operating the business activities.
Post-Registration Formalities you should know
Upon successful registration of the software company, a certificate of incorporation, company business profile, and company stamps can be accessible. Based on the type of company you choose, the first board meeting among the shareholder must take place. Along with this, it is also relevant to provide the shareholding certificates to the respective shareholders. However, statutory compliance is not just a one-time obligation; instead, you need to comply with it consistently. To ensure that the company keeps on running consistently and according to the law, ensuring to follow each requirement is essential. For example, annual returns filing, corporate tax filing, accounting requirements, and AGM’s are necessary for each company. Additionally, it is essential to consider statutory compliance to prevent potential penalties.
If you are a foreigner and intend to operate a company in Singapore, in that situation, you will be required to appoint a Singaporean, permanent resident, local director, or via Entre Pass. The second thing that you need to keep in mind is that you need to reach out and appoint a registered filing agent or firm to assist you in this regard. If you do not intend to stay in Singapore, in that situation, you will require hiring a nominee director. In contrast, if you intend to stay within Singapore, you will require a relevant work visa to live and run a company in Singapore lawfully. Moreover, you can also reach out to the appropriate filing agent or firm to determine the type of visa you must apply for. Luckily, the employment pass holder can also register a company in Singapore and hold up to 100% of shares. Once you have formed a company in Singapore, you need to hire a local resident director in your company.
You need to be aware of a few additional fees while setting up a software company in Singapore. The fee for company name registration with ACRA is S$15, and for company registration in Singapore, the ACRA charges S$300. There might be several other fees involved in the process of establishing a software company in Singapore. That’s why it is essential to save some funds prior to establishing a company in Singapore.
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After reading the above article, you might have complete details on establishing a software company in Singapore. However, no matter what type of business structure you choose, the process will be similar in all kinds of business structures. So carefully read all the points before proceeding to establish a software company in Singapore.
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