Singapore is consistently considered as a global business hub because of its infrastructure, good governance, open corporate policies, skilled workforce, use of English as the main functional work language, ease of starting a new business, business-friendly ecosystem, affordable access to funding, foreign income exemption, and so on.
Starting a business in Singapore is exciting, but sitting down and crunching numbers can be tedious. However, if you think about it this way, you’re essentially laying the groundwork for success by being reasonable about your startup business expenses. So, crunching the numbers—determining your business startup costs—is the ideal place to start. Startup costs may be eligible as deductible expenses IRAS (Inland Revenue Authority of Singapore).
When it comes to deciding which expenses are worth considering and which costs are unnecessary, many aspiring entrepreneurs feel lost. They have a vision, but considering marketing, hiring, product development, personnel, administration, taxes and other factors can be daunting. You could jeopardize the viability and future of your company if you don’t carefully plan for the costs you’ll face when you first start.
Despite the fact that different types of businesses have varying expenses, the following is a list of the most common business expenses that most businesses must pay and there are some costs that you are just wasting your hard-earned money on. Here we will discuss some of the essential as well as some of the avoidable expenses every entrepreneur in Singapore should be aware of:
Advertising and marketing
It takes constant work to advertise and promote your recently launched business. You must set aside a reasonable amount of money for sales and marketing. Along with traditional marketing you should also concentrate on digital marketing to attract and retain new customers, as it has now become the foundation of many startups. It requires both time and money to develop and upkeep an online presence.
Whether you are establishing an agency, a corporation, or another type of business, you must set aside funds for professional costs such as hiring an accountant, solicitor, lawyer, or other expert professionals to deal with the legal aspects of starting a business such as company formation, copyright protection, drafting partnership agreements, or other fees you may be required to pay to the government for certificates and inspections for health and safety or food hygiene.
Every business needs some sort of equipment and essential supplies. Before adding equipment costs to the list of startup costs, you can select whether to lease or buy the equipment. The cost of equipment varies depending on the industry and the size of the company. Hiring employees will cost you more money because you may need to secure individual equipment as well.
Utility bills, rent, and insurance are examples of fixed startup costs; you can reasonably set aside a fixed amount of money for each expense with little variation from month to month. If you work from home or coworking spaces, you can reduce your rental costs; otherwise, you will have to set aside a significant portion of your fixed costs for these expenses.
Are the startup costs tax deductible?
Rational and genuine business expenses that comes under deductible expenses IRAS (Inland Revenue Authority of Singapore), are:
Legal and professional fees
Repairs and maintenance
Transport (public transport and goods/ commercial vehicles)
Water and electricity