Starting a business in Singapore is easy and relatively inexpensive, especially in terms of capital. In the case of a private limited company, the paid-up capital is required. The amount is so nominal that it makes Singapore a haven for entrepreneurs and investors.
However, there are capital requirements for specific industries. For example, travel agencies need to have an average paid-up capital of S$75,000, based on the services they provide. Similarly, public accounting firms have to possess at least S$50,000 in paid-up capital. These are just some of the basic requirements that ensure the company has sufficient financial backing to conduct business within a particular industry. Actual costs, however, may differ depending on prevailing conditions.
For entrepreneurs seeking to apply for certain immigration passes, higher capital requirements may apply. For example, the EntrePass, designed for foreign entrepreneurs aiming to start and operate businesses in Singapore, necessitates a paid-up capital of an average of S$500,000. This ensures that applicants have a substantial financial commitment to their ventures.
While the statutory minimum is low, many businesses increase paid-up capital to a higher amount for credibility purposes with clients, investors, and financial institutions. A larger capital base might be interpreted as financial stability and serious commitment to the business, which would be favourable in cases where one looks for finance or partnerships.
Issued share capital is distinct from paid-up capital; the former describes the total value of the shares distributed by a company to its shareholders, while paid-up capital is the real amount the shareholders pay for such shares. A no-par company in Singapore could issue shares that may or may not be fully paid instantly, so as to have flexibility in capital management.
In a nutshell, though the minimum capital requirement to start a business in Singapore may be small, the actual amount needed is highly dependent on the nature of the business, industry-specific regulations, and the aspirations of the company. The onus lies with the prospective business owner to evaluate their situation and, if need be, consult corporate service providers on the ideal capital structure for their venture.