Is It Hard to Start a Company in Singapore? Answers to Investors' Questions and the Truth

Is Setting Up a Company in Singapore Difficult? Uncovering the Truth Behind Investors’ Doubts

In today's shifting global economic landscape, more entrepreneurs and investors are turning their attention to Southeast Asia - a vibrant and growing market. As a regional financial and business hub, Singapore stands out due to its political stability, efficient governance, and world-class business environment. It has become one of the top choices for entrepreneurs looking to set up operations overseas. So, just how difficult is it to start a company in Singapore? This article explores recent developments and real-world procedures to reveal the truth behind this common question.

1. Friendly Policy Environment with Efficient and Transparent Registration

Singapore has long been known for its streamlined company registration process and strong legal framework. According to the World Bank’s Doing Business 2025 report, Singapore remains among the world’s best places to do business, particularly excelling in indicators such as starting a business, obtaining construction permits, and getting electricity.

For example, foreign investors can complete the entire incorporation process online through the Accounting and Corporate Regulatory Authority ACRA, typically within 1-3 working days. The country operates a one-stop service model, where all necessary approvals and submissions can be handled via digital platforms, significantly reducing time and cost.

Moreover, Singapore has introduced several policies in recent years to encourage innovation and attract foreign investment. In early 2025, Enterprise Singapore announced further simplifications to the Entrepreneur Pass EntrePass application process, along with tax incentives and funding support for eligible startups. These measures have effectively lowered the barriers for foreign companies entering the local market.

2. Open Foreign Investment Policies, With Some Sector-Specific Restrictions

While Singapore generally welcomes foreign investors, certain industries - such as finance, healthcare, and education - still impose restrictions on foreign ownership or operational licenses. For instance, setting up a bank or licensed financial institution requires approval from the Monetary Authority of Singapore MAS. Similarly, the healthcare sector must comply with regulations set by the Ministry of Health.

However, for most sectors including technology, trading, consulting, and e-commerce, full foreign ownership is permitted without the need for a local partner. This flexibility has attracted numerous companies from China, India, Europe, and the U.S. to establish regional headquarters or RD centers in Singapore.

According to a June 2025 report by Lianhe Zaobao, as global supply chains continue to restructure, more Chinese companies are choosing Singapore as a gateway to Southeast Asia. In the first half of 2025 alone, over 500 Chinese firms registered in Singapore, spanning industries such as tech, logistics, and new energy.

3. Significant Tax Advantages Supporting Long-Term Growth

Singapore’s tax system is another major draw for international investors. The maximum corporate income tax rate is only 17%, significantly lower than in many Western countries. The country follows a territorial tax system, meaning that only income sourced in Singapore is taxed, while foreign-sourced income enjoys exemptions or reduced taxes when repatriated.

Furthermore, Singapore has signed Double Taxation Avoidance Agreements DTAs with more than 80 countries and regions, facilitating cross-border investments. For investors targeting the ASEAN market, Singapore serves as an ideal springboard.

4. Relatively High Operating Costs Require Careful Budgeting

Despite its advantages in policy efficiency and taxation, operating costs in Singapore can be relatively high. Office rental prices and labor expenses, in particular, pose challenges compared to other Southeast Asian cities.

According to Colliers International’s Q2 2025 data, average office rents in Singapore’s central business district reached SGD 9.5 per square foot - significantly higher than in cities like Bangkok or Ho Chi Minh City. Hiring local technical talent also comes at a premium.

Startups and SMEs may benefit from shared office spaces or remote collaboration models during the early stages to reduce fixed costs and improve financial flexibility.

5. Multicultural and Inclusive Environment Fosters Global Team Integration

Singapore’s multicultural and multilingual society makes it easier for international businesses to operate. English is widely used in business settings, facilitating smooth communication with clients and partners. Additionally, the city-state offers high-quality education and healthcare systems, which contribute to a high standard of living for entrepreneurs and their families.

This combination of professional and personal benefits explains why many high-net-worth individuals view Singapore not only as an investment destination but also as an attractive option for relocation and children's education.

Conclusion

Setting up a company in Singapore is far from difficult - especially for investors with clear business plans and a good understanding of local regulations. The process is efficient, transparent, and well-supported by government initiatives. However, like any investment decision, it requires careful evaluation of your resources, industry needs, and target market.

If you're considering expanding into Southeast Asia, Singapore is undoubtedly a compelling option worth serious consideration.