Singapore, known for its robust economy and status as a business hub, offers lucrative opportunities for retail entrepreneurs. This guide provides an in-depth overview of starting a retail business in Singapore, covering the necessary steps, requirements, and the latest market data. Whether you’re a local or an international entrepreneur, this guide will help you navigate Singapore’s retail landscape.
1. Understanding the Retail Landscape in Singapore
Retail outlets are essential in Singapore’s economy, selling goods directly to consumers and contributing significantly to economic growth.
In January 2024, the retail sector saw a 1.3% increase in sales year-on-year, rebounding from a slight decline in December 2023. Motor vehicle sales surged by 37.3%, while other retail sectors saw a modest decrease. Excluding the automotive sector, sales dipped by 2.1%. E-commerce also plays a growing role, making up 11.2% of all retail sales in January 2024, with particularly high online penetration in the Computer & Telecommunications Equipment and Furniture & Household Equipment segments.
Understanding these trends can help you make informed decisions about the type of retail business to open and the importance of integrating online sales options
2. Register Your Business with ACRA
To set up a retail business, you must register your company with the Singapore Companies Registrar (ACRA). Singapore’s business-friendly environment ensures that the process is streamlined and usually completed within 24 hours online.
- Choose a Unique Business Name: Ensure that the name reflects your brand and complies with ACRA’s guidelines.
- Prepare Necessary Documents: Have your identification, business address, and other key details ready for a smooth registration process.
- Complete Registration Online: Go to ACRA’s online portal to finalize the registration. You’ll receive confirmation once the registration is successful.
For international entrepreneurs planning to relocate, obtaining the Singapore Entrepreneur Visa (EntrePass) is necessary for managing your business on-site.
3. Determine Licensing Requirements for Your Merchandise
The licenses you need will depend on the types of products you plan to sell. Below are some of the common licensing requirements:
- Cosmetics: All cosmetic products must be notified to the Health Sciences Authority (HSA) before sale.
- Liquor: Selling intoxicating liquor requires a license from the Liquors Licensing Board. Specific requirements vary based on the type of alcoholic beverages, operating hours, and whether you’re serving alcohol on-site (e.g., a bar) or selling it off-site (e.g., a convenience store).
Obtaining a Liquor License
To apply for a liquor license:
- Register your business with ACRA.
- Ensure the applicant is a Singapore Citizen, Permanent Resident, or holds a FIN.
- Submit an application on the GoBusiness Licensing Portal with the required documents, including proof of identity, planning permission from URA, and hawker’s license if applicable.
Licenses are issued within 12 business days, and the required fees depend on the class of license. Be aware that eligibility involves a “fit and proper” assessment, considering any past legal issues or compliance records.
4: Secure the Right Location and Meet Premises Regulations
Choosing the right location is crucial. Beyond customer foot traffic and accessibility, your space must comply with safety standards and government regulations.
- Obtain URA Approval for Modifications: If the location requires structural changes, apply for a permit from the Urban Redevelopment Authority (URA).
- Ensure Fire Safety: Get a Fire Safety Certificate from the Singapore Civil Defence Force (SCDF) to confirm compliance with fire safety standards.
- Apply for Additional Permits if Needed: A Certificate of Statutory Completion and a Temporary Occupation Permit (TOP) from the Building and Construction Authority (BCA) may also be required if you make significant modifications.
For minor modifications, a Change of Use permit from URA may suffice to designate the space for retail.
5. Hire Staff and Meet Employment Regulations
According to the Employment Act, any foreigner employed in Singapore needs a valid work pass. If you plan to hire foreign nationals, ensure you secure the appropriate pass (e.g., an Employment Pass or S Pass) before they start.
Some passes impose restrictions on the total number of foreign workers you can employ. You may also want to check the government’s guidelines for fair hiring practices and employee benefits to maintain compliance.
For more details on hiring foreigners, you can refer to the Types of Work Passes in Singapore guide.
6. Set Up Online Retail Channels
With online transactions making up 11.2% of retail sales as of January 2024, establishing an online presence can help your retail business reach more customers.
- Create an E-Commerce Website: Use a platform that allows easy integration with payment gateways, delivery options, and a secure checkout process.
- List Your Products on Major Marketplaces: Consider platforms like Lazada and Shopee to expand your reach, as they’re popular among Singaporean consumers.
- Optimize for Mobile Shopping: Given high mobile usage in Singapore, ensure your website is mobile-friendly.
7. Submit Liquor License Applications (If Applicable)
If your business involves selling liquor, apply for the appropriate license type based on your operational needs. License classes vary, allowing options for different trading hours, locations, and types of liquor sales. You may apply for multiple licenses if needed, but note that holding certain licenses, such as a Class 2A or 2B license, restricts obtaining a Class 3A license for the same location.
Application Requirements
- Register your business with ACRA.
- Submit identification documents, ACRA certificates, and planning permission where applicable.
- Await the outcome, typically received within 12 business days via SMS or email.
Conclusion
Starting a retail business in Singapore is a promising venture, but it requires careful planning, adherence to regulatory requirements, and an understanding of the market. Partnering with a professional accounting firm or incorporation service can help streamline the process, from registration to obtaining licenses, freeing you to focus on developing a unique value proposition in this vibrant retail landscape.
With the right preparation and a clear strategy, you’ll be well on your way to establishing a successful retail outlet in Singapore.
