BACK TO BLOG

5 Things You Must Know Before Starting a Web3 Business in Singapore

Written by
Aaron Oh
Last Modified on
April 26, 2024

With its progressive stance on cryptocurrencies, blockchain, and fintech, Singapore is a prominent destination for companies venturing into Web3 technologies. In addition, Singapore ranks #2 on the World Bank’s Ease of Doing Business Index, making it one of the best places in the world to start a business.

Thanks to this stellar combination of factors, Singapore is undoubtedly a great choice to launch your Web3 business. To ensure you get off to a successful start, Aspire has partnered with Wassie Lawyer of GVRN, the leading LegalTech for Web3 founders and investors, to create an informative guide on the set-up process.

This five-step guide will detail everything you need to know to formally register your Web3 company and start your new business venture in Singapore

How should I go about registering my business in Singapore?

Meet the requirements

Before registering your business in the Lion City, you must first meet the following requirements:

  • Company Name: Choose a unique name for your company that complies with ACRA guidelines.
  • Paid-up Capital: The minimum paid-up capital required is S$1, with the flexibility to increase it later.
  • Directors: You can appoint unlimited local or foreign directors, but at least one must be a Singapore resident.
  • Shareholders: Your company can have 1-50 shareholders, comprising local and non-local individuals over 18 years of age or companies.
  • Company Secretary: Appoint a qualified company secretary within six months of incorporation. This person must be a Singapore resident and cannot be a shareholder or sole director.
  • Registered Address: Ensure you have a local physical address, which can be residential or commercial but not a P.O. box.

If you’re not a Singaporean resident, you may appoint a local nominee director for your new company in Singapore.

You can engage a corporate secretarial firm to provide a Nominee Director. However, it’s important to ensure that your corporate services provider is familiar with the compliance and regulatory requirements for Web3 entities. 

Do your due diligence. Corporate services providers (CSP) that serve high-risk clients can present risks to your business if impacted by other clients they work with. CSPs should also be doing appropriate due diligence on your business.

Gather the necessary documents

Once you have satisfied these basic requirements, you can gather relevant incorporation documents. Make sure you have the following:

  • Company name
  • Description of your business activities description
  • Company constitution
  • Director and shareholder particulars, and proof of address

Register your company online

All that’s left is to register your company with ACRA online via the BizFile+ portal. You’ll need to pay a standard incorporation fee of S$315. Online registration typically takes less than an hour. After the company is incorporated, you will receive a unique entity number (UEN) to identify your business.

What taxes do I need to pay?

According to Singapore’s tax rules, all income generated or received in Singapore is considered taxable. This includes investments from rental properties, gains and profits from business or trade, as well as royalties and premiums sold.

The Inland Revenue Authority of Singapore (IRAS) is the government agency responsible for assessing and collecting taxes. Companies are taxed on income earned in the previous financial year. As a business owner, you are free to choose your own financial year-end (FYE) for accounting.

Corporate Income Tax

Singapore boasts one of the lowest corporate tax rates in the world — a flat 17% rate! To sweeten the deal, you can further capitalize on numerous tax incentives and rebates for new startups and businesses. 

Foreign founders must also be aware of potential foreign tax obligations. For example, a Singapore company with more than 50% US ownership may be treated as a controlled foreign corporation for US tax purposes.

Withholding Tax

When a non-resident company or individual receives payment from a Singaporean company or individual for goods or services provided in Singapore, a percentage of that income must be withheld by the Singaporean company and paid as tax to IRAS. This withholding tax does not apply to Singapore-resident companies and individuals.

Here’s a simple checklist to determine if you’re a Singapore resident company for tax purposes:

  • Do your board of directors meet and make strategic decisions in Singapore?
  • Do you have key employees based in Singapore?
  • Your sole director is not a nominee director?

If the answer is yes to all of these questions, then you are considered a Singapore resident company, As a result, you will not be liable for withholding tax.

What laws and regulations do I need to take note of?

Different regulatory requirements may apply depending on the nature of your business and the services you’re providing.

Business Nature Business Activity Regulations Requirements
Cryptocurrency If trading as securities, capital market products Securities and Futures Act Capital Markets Services Licence
If providing a payment service Payment Services Act
MAS AML Guideline
PSA Licence
Blockchain Development - -
If providing exchange/custodial/money-making services to Singaporeans Securities and Futures Act Capital Markets Services Licence
NFT If providing exchange/retail Depends on the nature of the token and underlying transaction

Cryptocurrency or Digital Tokens

For instance, companies that handle cryptocurrencies should note that cryptocurrencies are not being treated as the equivalent of money in Singapore.

Depending on the characteristics of each cryptocurrency, it may be treated as a regulated product such as a capital markets product (including securities), e-money, or a digital payment token (“DPT”), or else as an unregulated digital token that is strictly used for utility purposes. 

As such, different regulations may apply such as the Payment Services Act 2019 (PSA) or the Securities and Futures Act 2001 (SFA), and others. For instance, a cryptocurrency may fall within the definition of “e-money” or “digital payment token”, and so a person who carries on a business of providing a payment service in relation to such a cryptocurrency would need to obtain a licence under the PSA. 

Blockchain Development

Blockchain development companies are typically not considered as digital payment token service providers under the PSA. However, if your business provides exchange, custodial, or market-making services out of Singapore, it may be classified as a DPT if Singaporeans are allowed to use such services. Make sure you have assessed and understand any regulatory implications of the services you will be providing. 

NFTs

While specific laws governing NFTs are yet to be formulated, their categorisation—whether as securities, currencies, or utilities—can subject them to existing regulatory frameworks. The Monetary Authority of Singapore (MAS), for example, may regulate digital tokens if they are deemed to be capital market products. Furthermore, the sale and minting of NFTs could invoke considerations under various financial regulations, depending on their design and purpose.

  1. Which is the best business account for my company?

Singapore has consistently placed among the top five in the Global Financial Centres Index, which measures future competitiveness and rankings for 121 financial centers around the world, based on qualitative indicators from the World Bank, the Economist Intelligence Unit, the OECD and United Nations, and others. 

As a regional and global hub for banking and financial services, Singapore boasts a network of over 120 foreign banks and 6 local banks. If you conduct business in Singapore, it’s imperative that you open a business account

As a trusted financial service platform for over 15,000 businesses, Aspire All-in-One Business Account is built for Web3 businesses and startups. Here are some reasons why Aspire is the best business account solution for your company:

  • 100% online - open your account remotely from anywhere in the world
  • Send and receive payments in 30+ currencies 
  • Local collection and sending accounts in USD/EUR/GBP/SGD/IDR and other major currencies
  • 3x cheaper FX rates than banks and no hidden fees
  • Unlimited 1% cashback on select digital spending

Why struggle with slow processes and hefty restrictions at traditional banks? Open your Aspire business account from anywhere in the world and enjoy fast, frictionless finance to turbocharge your Web3 business. Get your account in one day!

  1. Why set up my Web3 company in Singapore?

Whether it’s the highly skilled and educated workforce, government support, or favorable business policies, there’s little doubt that setting up your Web3 company in Singapore could be the game-changer you’ve been looking for. Here are additional reasons why Singapore is the ideal destination for your business:

  • Strategic location: Singapore's strategic location offers unparalleled accessibility to major economies like China and India and other countries around the region. Conducting business internationally is a breeze with Word’s Best Airport Changi Airport, connecting over 100+ airlines to 400+ cities in over 100 countries worldwide.
  • Developed Capital Markets: Singapore's capital markets have garnered international acclaim for their efficiency and regulatory framework. This facilitates smooth business operations and ensures competitiveness on a global scale.
  • Tax Benefits: Enjoying one of the world's most favourable tax structures, Singapore imposes a corporate tax rate capped at a low 17%. Additionally, new companies receive significant tax breaks during their initial years, coupled with a network of free trade agreements and Avoidance of Double Taxation Agreements, easing international trade complexities.
  • Business-Friendly Ecosystem: The Singaporean government actively fosters innovation and entrepreneurship through various tax incentives, programs, and grant schemes. Access to diverse funding sources and a highly skilled workforce further enhances the business landscape.
  • Strong Legal Framework: As one of the most stable political environments in Southeast Asia, Singapore provides investors with security and protection against corruption and crime. Its robust legal system ensures swift and fair resolution of corporate disputes.
  • Ease of Incorporation: Incorporating your company in Singapore is a streamlined process, taking under five minutes to submit required documents and less than a day for approval. Engaging an incorporation firm like GVRN, can simplify the process and ensure your business complies with regulatory requirements.

Whether it’s incorporation or appointing nominee directors, leave it to the experts at GVRN who specialise in structuring Web3 organisations. Reach out to the team now for assistance!

Subscribe to our newsletter to get the latest on reducing the friction of money here

Join Aspire’s Web3 Telegram Community or talk to Sales today.

For more episodes of CFO Talks, check us out on Apple Podcasts, Google Podcasts, Spotify or add our RSS feed to your favorite podcast player!

Frequently Asked Questions

No items found.
About the author
Aaron Oh
is a seasoned content writer specialising in finance, insurance and tech industries. With a writing history at S&P Global, EdgeProp, Indeed, Prudential, and others, Aaron leverages finance knowledge and business insights to help businesses improve productivity and performance.
Supercharge your finance operations with Aspire
Find out how Aspire can help you speed up your end-to-end finance processes from payments to expense management.
Talk to Sales