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Streamlining Business Licensing in Singapore

License Application for Specialist Trade

BluTrust specializes in acquiring industry-specific business licenses in Singapore, guiding clients through permits and compliance, and simplifying the process for various sectors such as construction, F&B, and real estate, making business setup efficient and compliant.

Business Licenses and Permits in Singapore

A business license is a permit issued by a Singapore government agency that allows a business owner to conduct a specific type of business. The license is required by certain types of business entities as will be mentioned below. Companies must be first registered with the registrar of companies to apply for a business license in Singapore.

Industry-Specific Business Licenses in Singapore

Some businesses in Singapore require an exclusive license to operate, and some of the industry-specific licenses are listed below. In general, it may take between two weeks to two months to get a business license or permit.

Construction business

Setting up a construction company in Singapore requires several permits, approvals, and licenses. Also, the business owner needs to apply to the Ministry of Manpower for work permits to hire foreign laborers.

Employment agency

An Employment Agency License is required to start agency business activities, and the Ministry of Manpower governs it. An agency must own a license regardless of where it is based, so long it facilitates the placement of prospective candidates with employers.

Event management company

Event management companies have to obtain one or more licenses depending on the type of event or activity being organized. Examples include Arts Entertainment License, Copyright Permit, Public Entertainment License, Trade Fair Permit, Animal Exhibition License, and so on.

Financial services business

Financial advisers must be licensed to carry out specific regulated financial services activities. Two types of necessary licenses are available (Capital Markets Services License and Financial Advisers License); however, there are exemptions, eligibility requirements, procedures, and other information that is needed. The hedge fund industry is treated separately in Singapore, including having different licensing requirements and industry regulations.

Food & Beverage business

There are many requirements and legalities for opening a restaurant in Singapore including business incorporation, applying for a food shop license, and hiring staff. Additionally, F&B business owners may want to obtain a liquor license, register for importing food products and services, and so on. Various programmes and assistance schemes have also been created to help the F&B sector develop their business and profitability.

Hotel

Setting up a hotel or boarding house in Singapore requires the attainment of several licenses and approvals, such as the principal Hotel-Keeper’s License and approval from the Hotels Licensing Board. Additional permits or licenses will also have to be obtained for general activities including TVs, ad-hoc entertainment, playing copyrighted music or videos, running a spa, selling tobacco products, operating a swimming pool, and so on.

Private education business

There are several compulsory licenses and procedures that a business owner needs to obtain and complete to set up an educational establishment in Singapore. Various registration forms, licenses, and permits are required for starting childcare centers, kindergartens, academic, and non-academic schools in Singapore.

Publishing business

A publishing business in Singapore needs two licenses: The Newspaper Permit from the Media Development Authority of Singapore (MDA) and the Printing Press License from the Registrar of Newspapers. Printing and publishing newspapers, or distributing international publications will require a Newspaper Permit; while the Printing Press License is required to operate a press.

Real estate agency

A new statutory board was recently set up to regulate the industry and raise standards for consumers. The new framework enhanced the licensing of real estate agencies, including a compulsory registration of real estate agents and other new industry regulations.

Retail shop

Licensing requirements for retail shops vary according to the nature of goods and services sold. Supermarkets, pharmacies, telecommunications stores, cosmetics, and liquor are all examples of some types of businesses that require licensing.

Shipping business

The minimum legal requirements for setting up shipping/maritime business operations in Singapore include legislation for operating vessels within and outside Singapore, crew members to work on board vessels, dealing with dangerous goods, managing various communication equipment on board vessels, and so on.

Spa

A Massage Establishment License is required to offer massage services, foot-reflexology services, manicure treatments, spa baths or other similar beauty treatments as part of your spa offerings.

Telecommunications business

Establishing telecommunication services related business in Singapore requires several legal requisites and licenses. The licensing requirements will vary depending upon the type of service provided, and every kind of business activity requires a minimum of one or more compulsory licenses.

Trading activities

Starting a trading company involves many aspects, including opening a customs account, applying for import/export licenses and permits, identifying the types of goods that can be imported/exported, taxation and fees, trade financing options, cargo clearance procedures, goods storage options, and so on. Additionally, “sensitive” goods will require more procedures to be brought into the country while global trading companies may enjoy tax incentives if they have an established presence in Singapore.

Travel agency

A travel agency license is required to conduct business as a Singapore, travel agent. A travel agent’s license can be filed online, requesting the business owner to have a registered company, an operating website following the “Terms and Conditions for the Use of the Travel Related Users’ System (TRUST),” and have a crucial executive approved by the Singapore Tourism Board (STB).

Western medical clinic

In order to operate a western medical clinic in Singapore, three types of licenses must be obtained – the Medical Clinic License for health-care institutions; licenses for handling and using hazardous chemicals, as well as licenses for using irradiating equipment or for purchasing specific medicinal products; and finally licenses and approvals to carry out specific medical procedures such as such as liposuction, abortion, and sterilisation.

On a Final Note

Establishing a business is a relatively simple and straightforward process in Singapore, and the business licensing procedure has been simplified to a great extent in recent years. If all the necessary documentation is provided and all other requirements satisfied, the license will be awarded. The pro-business mindset found in Singapore increases the ease of doing business in Singapore, making it a popular destination for start-ups.

For enterprising business owners and international business owners, it is usually recommended to engage a professional services firm to expedite the process and help familiarise owners with the procedures in Singapore businesses, which would help to save time and resources.

Capital Allowances

Deductions for the decline in value of depreciating assets are available under the Uniform capital allowance (UCA) system. In addition to the rules for depreciating assets, deductions are allowed for certain other capital expenditure.

Small business entities have the option of choosing simplified depreciation rules. Under these rules, small business entities can claim an immediate deduction if the cost is below the relevant threshold or else add the asset to the small business depreciation pool.

Land, trading stock and most intangible assets (excluding exceptions such as intellectual property and in-house software) are not depreciating assets.

The decline in value is generally calculated by spreading the cost of the asset over its effective life, using one of two methods:

Prime cost method – decline in value each year is calculated as a percentage of the initial cost of the asset
Diminishing value method – decline in value each year is calculated as a percentage of the opening depreciated value of the asset
MORE: Australian Taxation Office (ATO) Decline in value calculator.

For most depreciating assets, taxpayers can either self-assess the effective life, or use estimates published by the ATO. Taxpayers can recalculate, either up or down, the effective life of an asset if the circumstances of use change and the effective life initially chosen is no longer accurate. An improvement to an asset that increases its cost by 10% or more in a year may result in an obligation to recalculate the effective life of the asset.

Decline in value of cars is restricted to the car limit. From 1 July 2022, the luxury car tax threshold for luxury cars is $64,741 (it was $60,733 for the year commencing 1 July 2021). Luxury car leases are treated as a notional sale and purchase, with decline in value restricted to the car limit.

The decline in value of certain depreciating assets with a cost or opening adjustable value of less than $1,000 can be calculated through a low-value pool. The decline in value for depreciating assets in the pool is calculated at an annual diminishing value rate of 37.5%.

Changes for 2022 and 2023

From 12 March 2020 until 31 December 2020, the asset cost threshold for the instant asset write-off (which is usually only available to small business entities) has increased from $30,000 to $150,000 and the eligibility criteria expended to cover entities with an aggregated turnover threshold of less than $500 million (up from $50 million).

Further, from 12 March 2020 until 30 June 2021 the Backing business investment measure applied to businesses with aggregated turnover below $500 million and provides either:

A deduction of 50% of the cost or opening adjustable value of an eligible asset on installation (existing depreciation rules apply to the balance of the asset's cost), or
For businesses using a small business depreciation pool, a deduction of 57.5% of the cost of the asset in the first year, with the balance added the asset to the small business pool
In addition, from 6 October 2020 to 30 June 2023, full expensing applies to allow eligible businesses with an aggregated turnover of less than $5 billion to deduct the full cost of new eligible depreciating assets. For businesses with aggregated turnover of less than $50 million, full expensing also applies to eligible second-hand assets.

Activity Statement

Businesses use activity statements to report and pay a number of tax obligations, including GST, pay as you go (PAYG) instalments, PAYG withholding and fringe benefits tax. Non-business taxpayers who need to pay quarterly PAYG instalments also use activity statements.

Activity statements are personalised to each taxpayer to support reporting against identified obligations.

Activity statements for businesses may be due either quarterly or monthly. Generally, businesses can lodge and pay quarterly if annual turnover is less than $20 million, and total annual PAYG withholding is $25,000 or less. Businesses that exceed one or both of those thresholds will have at least some monthly obligations. Non-business taxpayers are generally required to lodge and pay quarterly.

Taxpayers with small obligations may be able to lodge and pay annually. Some taxpayers may receive an instalment notice for GST and/or PAYG instalments, instead of an activity statement.

The Australian Taxation Office (ATO) web site provides instructions on lodging and paying activity statements. Detailed instructions are provided for each of the different tax obligations:

GST (Goods and Services Tax)
PAYG (Pay As You Go) Instalments
PAYG (Pay As You Go) Withholding
FBT (Fringe Benefit Tax)
LCT (Luxury Car Tax)
WET (Wine Equalisation Tax)
Fuel Tax Credits