Singapore - Singapore, a young entrepreneur's Mecca?

What’s common between Facebook’s Mark Zuckerberg, Groupon’s Andrew Mason, Youtube’s Chad Hurley, Digg’s Kevin Rose, and Mint.com’s Aaron Patzer?

Well, they belong to the league of millionaires who initially started out as young entrepreneurs with nothing but an innovative business idea but a lot of appetite for taking the risk to work on their idea. While Singapore is yet to produce a Zuckerberg or a Mason it has immense potential to turn into a youth entrepreneur's Mecca, at least in Asia.

All young graduating students in Singapore have the same needs. They want to earn enough money to live a comfortable life, they want to make their family proud, and they want to make a name for themselves. However, they have differing views on how to get there. There is one school of thought that believes in joining one of the several thousand MNCs in Singapore, which is more often than not a secure route to job-stability and taking home an impressive pay check. But there is another school of thought that believes in being one’s own boss. While a majority of Singapore’s youth tend to conform to the former group there are signs that an increasing number of young twenty-somethings are striking out on their own.

The 2008 Global University Entrepreneurial Spirit Students (GUESS) survey, a collaborative research project between the National University of Singapore Entrepreneurship Centre, SMU, Nanyang Technological University, and five Singapore polytechnics brought out some very interesting results. Apparently, Singapore students have one of the highest entrepreneurial intention rates worldwide; 49.3% of the surveyed students in Singapore indicated that they would like to start their own business after 5 years of graduation while 18.4%, aspired to be entrepreneurs within 5 years of graduation. Singapore’s active entrepreneurial rate of 1.2% is only slightly lower than the international average of 1.9%. The survival rate of businesses started by Singapore students is 77%. Furthermore, Singapore students were found to be more proactive than their international peers in taking steps to start their own business. They were also more aware of the various entrepreneurship programs, courses, and available infrastructure as compared to their global counterparts.

While the results of the GUESS survey are encouraging, it raises a pertinent question: What is driving youth entrepreneurship in Singapore? One part of answer is that today’s youth are in general more enterprising, risk taking, and independent. For young entrepreneurs it’s not about just running a business, it’s about being able to realize their potential. It’s about the power of ownership. It’s about feeling more in-control of their future. Another part of the answer is the robust entrepreneurial support-system that the Singapore's economy has fostered. The country has built an entire enterprise ecosystem that helps turn ideas into reality.

With a long standing reputation as the easiest place to do business in the world, Singapore offers one of the best business environments for young entrepreneurs to establish and grow their start-ups. For instance, all it takes is two procedures (i.e. company name approval and submission of incorporation documents) and 24 hours to setup a company in Singapore. You do not even have to be physically present at the time of company incorporation as the entire registration process can be completed online with a mere click of the button. The minimum statutory requirements to form a Singapore company are very easy to satisfy. There needs to be a local resident director who is 18 years of age, a shareholder (the director can act as the shareholder), a local registered address (can also be a residential address), a qualified company secretary and a share capital of just S$1.00.

Singapore also has an innovative Home Office Scheme that allows entrepreneurs to use their residential premises as their home-office. So that takes care of the soaring commercial rents that may be quite a challenge for a young entrepreneur starting out on a shoe-string budget.

Singapore’s tax system is another factor that works in favor of young entrepreneurs. After taking into account tax exemptions, the corporate income tax rate works out to approximately 8.5% for profits up to S$300,000 and a flat 17% for profits above S$300,000. But that’s not all. A start-up i.e. a newly incorporated Singapore company enjoys 0% tax rate on its first S$100,000 taxable income for each of its first three tax filing years (subject to certain restrictions). The incentives don’t end here. Singapore dangles another carrot by exempting companies with an annual turnover of below S$1million from registering for GST and granting tax incentives for various industries. The initial profits are incredibly important to start-ups and this is exactly the kind of tax system that young entrepreneurs need.

Finally, young entrepreneurs in Singapore can take help from government funding schemes such as Young Entrepreneurs Scheme for Schools (YES! Schools) and Young Entrepreneurs Scheme for Start-ups (YES! Start-ups) where grants ranging from S$10,000-S$100,000 are offered to budding youth and student entrepreneurs. In fact as of 2009, 59 young entrepreneurs are reported to have started 38 companies under the YES! Start-ups scheme while the entrepreneurial aspirations of over 6,000 students in 31 schools were realized thanks to the YES! Schools initiative.

Singapore is witnessing a growing base of young entrepreneurs who are unleashing their potential and carving a niche for themselves in the business world. Some of these talents include entrepreneurs such as Chua U-Zyn, founder of a community meta blog for Singaporean bloggers; Ryan Su, owner of a bird sanctuary that breeds exotic birds for export; Eric Feng, founder of a successful training solutions company; and Karl and Christopher Chong, founders of a group discount website in Singapore.

Today’s youth are choosing to work for themselves rather than for others and Singapore seems to be turning into a hub for these young, bold, and ambitious entrepreneurs.

By Janus Corporate Solutions Pte. Ltd

Business & Investment Opportunities

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