How to Start a Construction Company in Singapore - 2024 Update
Singapore is known for their impressive skyscrapers and attractive yet practical building designs. From the construction of public housing projects to business parks to continual development and expansions of MRT lines to varied private sector projects (residential and commercial property), the construction industry is considered one of Singapore's economic foundations.
With the construction industry being a billion-dollar industry, people cannot resist not taking a slice of the pie. More construction companies are popping up to take advantage of the increasing demand for construction projects.
But what does it take to set up a construction company in Singapore? What are the core requirements? What licenses do you need to operate one in Singapore?
We'll answer these questions and more.
Prerequisites for License to Offer Professional Engineering Services
Singapore, a country known for its stance against red tape and bureaucracy, has made it easy for local and foreign entrepreneurs to set up a company regardless of the industry.
If you plan on starting your own construction business, you'll need to comply with these prerequisites before moving on to the other step.
Business Incorporation
One of the requirements for a Professional Engineering Services License is business incorporation.
The business must register as a limited company, multi-disciplinary partnership, limited liability partnership, or unlimited company. The most preferred option is a private limited company (PLC) due to its numerous business advantages such as limited liability, legal entity status, tax incentives, and perpetual succession.
Foreign companies looking to set up a construction business in Singapore will need to register as a Singapore subsidiary company or a branch office.
If you want to know more about company registration in Singapore, please get in touch with us. We'll be more than happy to answer any questions you might have.
Approval of Premises
Business owners who want to use a building for their office will need approval from the Urban Redevelopment Authority of Singapore (URA).
You’ll also need to secure the following clearances for safety and fire protection from the Singapore Civil Defense Force and Fire Safety Bureau of Singapore.
Construction companies that work with fire safety within the office will need to secure additional clearances from the Singapore Civil Defense Force.
What You Need to Set Up a Construction Business in Singapore
You need a license from the Professional Engineers Board (PEB) to fully set up your construction business. This is a requirement brought about by the Professional Engineers Act
With this license, a company can carry out the following:
Building completion work and projects
Leasing of construction equipment
Perform building installation work
Specialized construction work on top of building construction
Participate in mixed construction activities
Engage in building construction work
Involved in site preparation
Structural repair work
Licensing Criteria for Applicants
The Professional Engineers Board of Singapore has different criteria for different company structures (i.e. limited companies, partnerships, and unlimited companies). Criteria will need to be met before they are issued a license to provide professional engineering services.
Criteria for Limited Companies
The company's Constitution states that the company's main objective is to provide professional engineering services.
The company needs to have a minimum paid-up capital of S$500,000.
The Articles of Association of the company should contain the list of the members of the company’s directors, and that should indicate that the majority of them should be registered professional engineers or allied professionals.
The company's professional engineering work in Singapore needs to be under the management and control of a company director who's a professional engineer with a valid practising certificate.
Criteria For Unlimited Corporations
Licenses are granted to Unlimited Corporations to provide professional engineering services in Singapore if the following are met:
The company's Constitution states that the company's main objective is to provide professional engineering services.
The Articles of Association of the company should state that the majority of the company’s directors are registered professional engineers or allied professionals.
It should also state that no person shall be registered as a member of the corporation unless he or she is a director, manager, or employee of the corporation
The company's professional engineering work is managed and controlled by a director of the company who's a professional engineer with a valid practising certificate.
Application for the license needs to be accompanied by the following:
Certified True Copy of the Memorandum and Articles of Association or Constitution of the Corporation
List of members and directors of the corporation and information as to whether they are professional engineers, allied professionals, and other qualifications.
A certified true copy of the resolution passed by the board of directors on the appointment of a director responsible for the management and control of professional engineering work
A certified true copy of the Certificate of Incorporation
A certified true copy of the latest Annual Return lodged with ACRA
Criteria For Licensed Partnerships
A license may be granted for Licensed Partnerships (this is a partnership that does not consist wholly of registered professional engineers) to provide professional engineering services if:
The partnership consists of only registered professional engineers and allied professionals with valid practising certificates
The engineering work in Singapore will be under the management and control of a partner who's a registered professional engineer with a corresponding practising certificate.
Application for a license by the licensed partnership will need the following:
Copy of the agreement that establishes the partnership
List of partners and their particulars as to whether they're registered professional engineers, allied professionals, or otherwise.
Criteria For Limited Liability Partnerships
Licenses are given to limited liability partners to provide professional engineering services if:
Statement lodged by partners of the LLP with the Registrar of Limited Liability Partnerships mentions that the primary nature of the business is to provide professional engineering services
At least one of the partners in the limited liability partnership is a registered professional engineer with a practising certificate
The professional engineering work to be done is managed by a professional engineer with a practising certificate.
Limited liability partnership is insured against professional liability.
The type of limited liability partnership eligible to register for a license are:
Either registered professional engineers or allied professionals with practising certificates or
Limited or unlimited corporations with valid licenses under the Professional Engineers Act, the Architects Act, or the Land Surveyors Act
Application for license by limited liability partnership will need to be accompanied by:
A certified true copy of the statement lodged by the partners of the limited liability partnership with the Registrar of Limited Liability Partnerships
A certified true copy of the resolution passed by the partners on the limited liability partnership on the appointment of the partner responsible for the management of professional engineering work in Singapore
List of partners in the limited liability partnership and their particulars
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Professional Engineering Services License Application Procedure
The following documents are required to be submitted together with the application form to the Professional Engineers Board of Singapore:
Certified True Copy of the company's Constitution
List of the company's members and directors along with their particulars
A certified true copy of the Professional Liability Insurance Policy.
It should also come with written confirmation from the insurance company that the policy satisfies Section 24 of the Professional Engineers Act.
A certified true copy of the Incorporation Certificate as well as a list of corporate shareholders
A certified true copy of the resolution passed by the board of directors that states the appointment of a director who will be responsible for the management and control of professional engineering work
Copy of documents lodged with ACRA on the appointment of chairman, board of directors, and shareholdings
A certified true copy of the latest Annual Return lodged with ACRA
Statutory declaration by all directors that all requirements and criteria are duly met and complied with two months before the date of the submission of the application.
Licenses are valid for one year. Application for a new license must be made at least two months before the current license expiration. There's an annual fee of S$300.
Builder's Licenses
Construction companies can also opt for a Builder's License, which is made possible through the Licensing of Builders Scheme by the BCA. This is done to ensure the long-term safety and quality of the construction sector through the requirement of minimum management standards, financial solvency, and safety record.
Construction companies need a Builder's License if they:
Participate in projects with construction plans needing approval from the Commissioner of Building Control
Work in specialist areas that have a high impact on public safety
The Builder's License will allow them to cover both public and private construction projects.
General Builders License
This license has two classes.
Class 1 License allows you to work on contracts of any value. You need a minimum paid-up capital of S$300,000 to apply for this license. The licensing fee is S$1,800
Class 2 License allows you to work on contracts valued at S$6 million or less. You need a minimum paid-up capital of S$25,000 to apply for this license. Licensing fee is S$1,200
Specialist Builder License
A specialist Builder License will allow your company to carry out specialist building works. This is an alternative for companies that don't want to get a Professional Engineering Services license.
Getting this license will allow you to carry out the following:
Ground support and stabilization projects
Pre-cast concrete work
In-situ post-tensioning work
Site investigation work
Structural steelwork
Piling work
If you qualify, you can register for more than one license (i.e., if you already have the Specialist Builder License, you can also apply for a General Builder's License if you qualify).
What Are The Licensing Requirements?
Appoint an Approved Person (AP). He or she will be directly in charge of the business when it comes to building works.
The AP must be:
The sole proprietor in a sole proprietorship
One of the partners in a partnership
A director or member of the board of management or board of directors or employee in a corporation
Appoint a Technical Controller (TC). He or she will oversee the performance and execution of building works undertaken by the builder.
For Specialist Builders, TCs must possess a civil or structural engineering degree from a recognized institution.
Minimum paid-up capital (for corporations only)
Class 1 General Builder - No less than S$300,000
Class 2 General Builder or Specialist Builder - No less than S$25,000
Pay Licensing Fees
Class 1 General Builder - S$1,800
Class 2 General Builder - S$1,200
Specialist Builder - S$1,500
The validity of these licenses is up to three years.
Other Licenses
Once the business is up and running, your construction company will need to secure various permits that will allow you to complete projects.
Remember that your license is just something that will allow you to operate a construction company legally. You will need different permits to carry out construction activities.
Permit for Road Occupation Management
This permit can be obtained from Land Transport Authority (LTA) and will allow you to carry out the following activities:
Soil investigation
Excavation work
Park vehicular cranes on roads for hoisting work
And other tasks that will force you to occupy a section of the road
License To Occupy And Operate Scheduled Premises
This permit can be obtained from the National Environment Agency and is a requirement for companies to occupy and use industrial premises classified as Scheduled Premises.
Scheduled Premises are those industries that have the potential to cause air pollution or are used to store large amounts of hazardous substances.
Telecommunication Wiring Contractor's License
The Telecommunication Wiring Contractor's License is obtained from the Infocomm Development Authority of Singapore (IMDA). It is required to install, repair, and maintain work of any internal communication wiring work connected to the Public Switched Telephone Network.
Advertisement License
The Advertisement License can be acquired through the BCA's Advertising Licensing System (ALS). This permit is required for putting up or displaying advertisement signages and billboards.
Localized Private Network License
The Localized Private Network License allows you to establish private network services, such as the use of walkie-talkies and other radio communication within a local area.
License to Discharge Trade Effluents
The License to Discharge Trade Effluents is obtained from the Public Utilities Board (PUB). It is a requirement for construction companies that discharge trade effluents from any business activity into a watercourse (e.g. an open-drain).
Localized Radio Communication License
The Localized Radio Communication License allows you to operate remote control devices, local paging area devices, walkie-talkies, Wireless LAN, and any other radio-communication equipment within the project.
General Radio Communication License
The General Radio Communication License is obtained from the IMDA and required to transmit and receive messages via radio communication.
Hiring Staff
Construction firms in Singapore hire many foreign workers because Singaporeans and SPR’s rarely take up mid-skilled construction jobs.
Foreign workers deployed in the construction industry will need a Singapore Work Pass depending on their skills and qualification.
The Employment Pass is for skilled workers with a minimum qualification salary of S$4,500. The S-Pass is for mid-skilled employees with a monthly salary of at least S$2,400.
You can read more about Employment Pass in Singapore or talk to us about your work visa needs.
Closing
The construction industry is one of the pillars of the Singapore economy, even with the Covid-19 crisis. The continuous need for developing infrastructure and the need for repairs and maintenance for existing buildings, roads, and other infrastructure drives local and foreign entrepreneurs into the industry.
If you need assistance setting up a construction company right here in Singapore, let Piloto Asia help you.
Frequently Asked Questions
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Small construction companies in Singapore are required to follow the Financial Reporting Standards for Small Entities (SFRS for SMEs). The SFRS for SMEs is a simplified set of accounting standards that is designed for small businesses. It is based on the full Singapore Financial Reporting Standards (SFRS), but with certain exemptions and simplifications to accommodate the lesser complexity and resources of small entities.
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Setting up a construction company involves managing various financial aspects, from initial capital investment to ongoing operational costs. To ensure your financials are in order and compliant with Singapore's regulations, it's crucial to partner with the best accounting firm in Singapore.
Such a firm should have experience in the construction industry, understand its unique financial challenges, and offer tailored solutions. Piloto Asia, for instance, provides specialized accounting services that cater to different industries, including construction.
By choosing the right accounting partner, you can focus on your core business operations while ensuring your financials are well-managed.
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Starting a construction company in Singapore requires adherence to several rules and regulations enshrined in the Building Control Act. First, you need to incorporate a private limited company with the Accounting and Corporate Regulatory Authority (ACRA). Notably, Singaporean law permits foreign individuals and companies to own 100% of the stock in a Singapore company. After incorporation, you can proceed to apply for a contractor's license from the Building and Construction Authority (BCA). Once obtained, you need to apply for relevant permits to safely and legally conduct construction activities.
For foreign investors looking to start a construction company in Singapore, it might be advisable to consider an <a href='https://www.pilotoasia.com/guide/holding-company-singapore'>investment holding company Singapore</a> that can provide the financial backing and necessary exposure to drive the growth of your company. These investment holding companies do not only offer financial backing but also professional advice, networking opportunities, and assistance with regulatory compliance. Remember to consult with a legal expert to ensure compliance with all codes, regulations, and acts while making the most of the benefits Singapore"s pro-business environment offers.
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Corporate income tax in Singapore is filed annually with the Inland Revenue Authority of Singapore (IRAS). The deadline for filing is November 30 of each year. To file corporate income tax, you will need to submit the following documents to IRAS:
A completed Corporate Income Tax Return (Form CCT1)
A copy of your company's audited financial statements
A copy of your company's tax computation
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The income tax deadline for construction companies in Singapore is April 15 of the following year. For example, the income tax deadline for the year 2023 is April 15, 2024. All construction companies in Singapore are required to file an income tax return by the 15th of April each year.
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Starting a construction company in Singapore involves a series of steps that offer advantages to a range of business entities, from individual entrepreneurs to larger corporations, including those structured as investment holding company Singapore entities. The process includes:
Business Incorporation: Register your business with ACRA. This step is crucial for all types of entities, offering benefits like legal recognition and limited liability.
Obtaining Licenses: Apply for a contractor's license from the Building and Construction Authority (BCA) and secure other necessary permits for construction activities.
Compliance with Regulations: Ensure adherence to the Building Control Act and other relevant regulations, a critical step for all business entities.
Broad Benefits: The construction sector in Singapore offers growth opportunities, potential for partnerships, and access to a supportive business environment, beneficial for all types of businesses.
Consulting with legal and business experts is recommended to ensure a smooth setup and operation of your construction company in Singapore, catering to the needs of diverse business structures.