How to start a small business in Singapore: A complete guide from idea to incorporation

1. Pre-setup stage for small businesses in Singapore

Before registering your business in Singapore, it’s helpful to spend time analysing what businesses to start, crystallising those ideas, understanding the market, refining your business model, and choosing the proper structure. Many new entrepreneurs struggle here, not because of unclear systems, but because they haven't fully considered what they want to build.

Let's break this process down.

Understanding SMEs in Singapore

According to the Singapore government's working definition, SMEs are companies with at least 30% local shareholding, an annual turnover of less than SGD $100 million, or a workforce of not more than 200 people.

This may sound technical, but the takeaway is simple: even small setups play a vital role in Singapore's economy. SMEs generate employment, support innovation, and contribute significantly to local income. Your small business becomes part of this ecosystem, not just benefiting yourself but contributing to society and the national economy.

Moving from idea to business concept

Even if you already have a business idea in mind, clarifying its feasibility helps ensure you start strong. Ideation is not simply about “coming up with something to sell”; it's about identifying real needs and structuring your offering around demand, capability, and market behaviour.

Entrepreneurs typically refine their ideas through four key lenses:

Solving a problem

Understanding the problems clearly forms the foundation of the most successful businesses. Look at what is missing or inefficient. This can be observed in your neighbourhood, your industry, or your daily life. You don't need to invent something revolutionary; you simply need to provide a solution people genuinely value.

Serving hobbyists or passion niches

Communities are built around hobbies such as fitness, gaming, pets, and crafts. They tend to spend more willingly. If your skills or interests align with such niches, you may find a loyal customer base more easily.

Following your passion

Building a business demands time, energy, and resilience. Choosing something you care about helps you stay consistent during early-stage challenges.

Riding trends or emerging behaviours

Markets evolve quickly. Trends such as sustainability, preloved goods, health-conscious living, digital skills, or at-home learning can inspire new business models. If a trend aligns with long-term changes in consumer behaviour, it may be a sustainable opportunity.

Validating your idea and identifying challenges

Once you have clarity on which business to start in Singapore, the next step is to understand whether the idea is viable. This requires assessing your strengths, weaknesses, opportunities, and threats, which is a strategic evaluation often referred to as a SWOT analysis.

You can begin by asking yourself:

• What makes your offering unique compared to competitors?
• What limitations might affect your operations?
• What external opportunities could accelerate growth?
• What are the risks that might impact sustainability, such as shifting consumer preferences?

This reflection prevents problems later and sets the foundation for a more resilient business.

Building a practical business plan

A business plan doesn't need to be lengthy. It should simply outline your vision, the market you’re serving, and how you plan to operate. A comprehensive plan typically includes an overview of your business, your mission and vision, your target audience, your offerings, and the financial planning necessary to initiate operations. 

Understanding the financial requirements

Every business requires some level of capital. You will need to distinguish between:

• Capital expenditures (one-time costs) such as equipment, website setup, or incorporation fees
• Fixed monthly costs, including rent, utilities, software subscriptions, labour, or inventory replenishment

Emergency buffers and contingency planning are also essential, especially for founders starting with limited funds. That said, Singapore makes it possible to launch a low-capital business if you choose lean digital models such as freelance services, consulting, e-commerce without inventory, or content-based offerings. We will discuss this in more detail later in the article. 

Conceptualising your branding

Branding is where the personality of your business begins to take shape. Selecting a name, defining your tone, and designing your identity help customers remember you and differentiate you from competitors. Choose a name that is clear, distinctive, and acceptable under ACRA’s naming guidelines, and check its availability through BizFile+.

Establishing your digital foundation

Even before registration, many entrepreneurs start setting up their websites and social media channels. A website provides potential customers with a trustworthy point of contact and serves as a central hub for updates, product details, and services. This early stage also allows you to refine your messaging and prepare for launch.

2. Choosing your business structure: Comparing entities in Singapore

Your next major decision is to identify the business structure that best suits your goals. Singapore offers three primary options, each with its own benefits and obligations.

Sole proprietorship

A sole proprietorship is owned by one individual who has complete control over the business. It is the simplest and least expensive structure.

Note: Because a Sole Proprietorship is not a separate legal entity, all business assets (such as intellectual property, domain names, and equipment) are legally owned by the individual. This can significantly complicate and delay the process if you later try to sell the business or transfer these assets to a new corporate entity (like a Pte Ltd).

Limited Partnership (LP)

A Limited Partnership (LP) is a business structure that features at least one general partner, who manages the business, and one or more limited partners, who invest with liability limited to their contribution.

Limited Liability Partnership (LLP)

A Limited Liability Partnership (LLP) is a partnership structure that combines operational flexibility with limited liability protection, operating as a separate legal entity.

Company (Private Limited/Pte Ltd)

A Private Limited Company (Pte Ltd) is a separate legal entity where shareholders enjoy limited liability, making it the most scalable and investor-friendly business structure. In Singapore, the company structure, limited liability, and director requirements are governed by the Companies Act.

3. During setup: Registering your business in Singapore

Once you have chosen your structure, the setup process becomes direct and streamlined. Singapore's digital platform, BizFile+, enables fast and efficient registration.

Reserving your business name

Names must be unique, non-offensive, and compliant with sector-specific guidelines. If no further approval is required, you will receive confirmation almost instantly.

Preparing the required documents

While all businesses must provide basic information, each structure has its own documentation requirements. Here’s a quick breakdown of what you need:

Submitting the application

Registration fees vary by structure, and most applications are completed within a day unless further review by another authority is required.

Once approved, you will receive your business registration number (UEN) and a digital certificate confirming establishment.

Retrieving your business profile

Your business profile is essential for opening bank accounts, signing contracts, applying for licences, and accessing government services. Keep this document accessible.

4. After setup: Your next essential steps

Incorporation is only the beginning. The following operational steps ensure your business runs smoothly and remains compliant.

Opening a business account

Most banks require standard documents, such as identification, a completed business profile, and application forms, along with a minimum deposit in some cases. Physical presence is often required, especially with traditional banks. While you can open an account with major local banks online, you also have the option to choose fintech business accounts, which offer faster digital onboarding, lower fees, and tools designed for startups and SMEs.

Understanding tax obligations

Companies pay corporate tax; sole proprietors pay personal income tax. Familiarise yourself with filing deadlines, obligations such as Estimated Chargeable Income, and record-keeping rules.

GST compliance

GST registration becomes mandatory when annual revenue exceeds SGD $1 million. Some businesses choose to register voluntarily, especially if their clients are predominantly GST-registered, allowing them to claim input tax and appear more credible. Once registered, you must also understand the responsibilities of a GST-registered company, including charging GST correctly, filing timely GST returns, and maintaining proper tax records to stay fully compliant with IRAS.

Setting up your financial and digital systems

Businesses commonly adopt accounting software such as Xero or QuickBooks, digital payment methods like PayNow Corporate or Stripe, CRM tools, and e-commerce platforms. A strong digital presence boosts credibility and increases customer reach.

5. Special scenarios: Home-based, low-capital, and foreign-owned businesses

Although the general process is the same, certain entrepreneurs face unique requirements.

Starting a business with minimal or no capital

Lean digital models enable the launch of a business with minimal to no upfront funding. This includes:

• Freelance services
• Content creation
• Dropshipping
• Affiliate marketing
• Consultancy
• Preorder-based e-commerce

Your ideation and business planning stages become even more critical here, as ensuring you choose a model aligned with your resources is crucial.

Starting a home-based business

Singapore’s Home Office Scheme allows certain small-scale businesses to operate from HDB flats or private residences. However, restrictions such as no signage, no manufacturing, and no significant foot traffic would apply. Many freelancers, online retailers, and small businesses start this way.

For foreigners incorporating in Singapore

If you’re wondering how to start a business in Singapore as a foreigner, the good news is that Singapore allows 100% foreign ownership of companies. However, when setting up a business in Singapore for foreigners, there are a few additional requirements. You must appoint at least one locally resident director, and you’ll need a registered filing agent to handle the incorporation process on your behalf. 

While the documentation requirements for foreigners to open a business account may be slightly higher, you can choose a business account offered by Singapore’s fintech solutions, which makes the process faster, more digital, and far more convenient compared to traditional banks.

How Aspire helps with your Singapore business setup

Starting a business in Singapore can feel complex, but Aspire Launchpad aims to make the process more organised and accessible. Whether you are a foreign founder or a local entrepreneur, Aspire provides a structured way to find the support and resources you may need.

With Launchpad, you simply tell us what you need, and we match you with trusted partners for incorporation, accounting, compliance, insurance, visas, and more. Set your filters, get personalised recommendations, and connect directly with the right provider.

And once your company is up and running, Aspire stays with you. You get a fully digital business account, multi-currency support, automated bookkeeping, expense management and card controls, invoicing tools, and additional benefits like cashback.

In short, Aspire makes the setup easy and keeps your day-to-day operations running effortlessly.

Conclusion

Starting a small business in Singapore, from refining your idea to incorporation and finally launching your operations, can be a smooth and empowering journey when approached with clarity and structure. 

The key is understanding your business concept, choosing the proper structure, meeting regulatory requirements, and planning your operations with care. Singapore's supportive environment ensures that entrepreneurs, whether local or foreign, home-based or low-capital, can build successful ventures aligned with long-term growth.