Why Start a Construction Company in Singapore?
Despite its limited land area, the construction industry is fundamental to Singapore’s economy. Renovation projects, property alterations, and other construction works are on the rise in the country as more and more people customise their homes, offices, and commercial buildings. The demand for construction works is relatively high in Singapore.
Starting a construction company in Singapore, however, is a challenging task. There are numerous regulations and permits needed in order to operate a construction or renovation company, and being a contractor requires you to know the regulations of home improvement projects as well.
In the next section, we’ll be looking through the different steps to incorporate a construction company in Singapore, as well as the necessary permits needed to run the business.
How to Start a Construction Company in Singapore
Step 1: Decide on a Company Name
The first step is to decide on the company name. This will enable you to register your company name in BizFile+, and reserve the right to use the company name. There is an application fee of SGD15, and the name will be reserved for 120 days or until the company is fully incorporated.
There are specific limitations to the company name as well. For example, the company name cannot be the same or similar to the name of an existing company. There are also words that are strictly regulated, which will require you to get approval from the necessary authorities before registering the company name.
Step 2: Register the Company
The next step is to register the company. On this step, the company will need to compile the necessary documents for submission to the Accounting and Corporate Regulatory Authority (ACRA), who oversees the registration of business entities. The required documents differ based on the type of business structure, but the basic requirements are as follows:
- A resident director or shareholder;
- A registered address in Singapore;
- A corporate secretary;
- A detailed business plan;
- A detailed floor plan of the premises;
- At least SGD1 in capital.
Step 3: Apply for Permits and Licences
Besides registering the company as a business entity, construction companies are required to obtain licences and permits from the Building and Construction Authority (BCA) in order to take on construction works, engineering, renovations, and demolitions.
Besides BCA licences, construction companies may also need to obtain work permits for foreign workers. These are coursed through the Ministry of Manpower (MoM), and you will need to detail the scope of work of the employees before they can start working in the company.
Step 4: Set Up a Corporate Bank Account
Setting up a separate bank account for the company is good practice that enables business owners to monitor the funds going in and out of the account, as well as separate the business finances from their own personal accounts.
Choose a bank that has experience working with corporate accounts for construction purposes, as these typically experience heavy cash flow in and out of the account. This will prevent transactions being flagged as suspicious due to the amount of cash flow. However, most major banks are well-equipped to handle corporate transactions.
Step 5: Apply for Insurance
As with most labour intensive projects, there is a risk of accidents in the worksite. Construction accidents are not only costly, they can be hazardous to workers and clients as well. Mishaps in construction sites cause a great deal of damage, which translates into high costs to fix them. Insurance is a good way of backing up the company in case of any accidents.
There are plenty of insurance companies that offer various types of insurance schemes specifically tailored to construction companies. There are also insurance plans for individuals who work in construction sites, as they are exposed to the dangers within the sites. Workers such as construction employees, builders, engineers, architects, and even interior designers and project managers can benefit from having insurance.
Step 6: Hire Workers
Finally, you can go ahead and hire workers to build the structures. Contractor companies often have in-house engineers, architects, electricians, and builders, but many construction companies offer design work as well, and employ interior designers to complete the project.
When hiring workers, it is important to provide them with proper safety training and equipment before they enter the construction site. This goes for all new workers in the company, even those that have been employed in construction companies in the past.
Step 7: Launch Your Business
You can then launch your business, market it to the public, and gather customers for construction and renovation projects. Construction companies often provide services from start to finish, so it is a good idea to brush up on the requirements and regulations regarding construction works in Singapore.
Build Up Your Company
Starting a company is heavy work, especially in industries such as construction. WealthBridge is here to make the paperwork easy for you as our Singapore corporate services team handles the documentation, incorporation, and other formalities for you. Focus on bringing the best services to your clients, and let us handle the paperwork!
Give us a call today to know more.