3 mistakes you can avoid when setting up your business in Singapore
My name is Lam and I'm the founder and CEO of WisePass. An ad tech startup I started to work on since October 31st 2014. I'm sitting today and thinking about all the mistakes that I've made and they are countless. The problem is not the amount but the lessons I could learn so I could move forward and build the business. I'm sharing today 3 lessons I learnt the hard way so you can save some time.
Incorporation
My mistake #1
I incorporated in Singapore in 2016 and used a corporate secretary that was very traditional as it was all paper based. It was really cumbersome and required me to ask every single of my investors to go through a KYC. In other words, the process was slow, traditional and wasn't business friendly.
The outcome was that we were late on some tax filings and onboarding new investors. As I'm not a Singaporean tax expert, it was a daunting process for me to figure out all the necessary tasks to remain compliant.
What did I do?
In the year 2020 during the pandemic, I took the bull by the horns and figured out what kind of corporate secretary would fit the business. As travel was prohibited, I needed a corporate secretary that would digital first, easy to chat with and helpful on reminding me on what I'm late for.
Eventually, my choice went with the company Osome. My experience working with them and processing the KYC for all my investors and tax fillings went really well. As they provide accounting services as well, that's perfect as they can complete accounting and file taxes diligently.
By using Osome, I could make every investor process their KYC digitally with a simple phone.
By using Osome, I can file taxes diligently.
By using Osome, I'm able to understand the requirements to maintain proper compliance with ACRA
I paid 600$ SGD a year for the corporate secretary service and I'm planning to jump on their accounting service package to get my tax filings done yearly.
Banking
My mistake #2
In 2016, I opened a bank account with OCBC and then with Citibank. These are regular banks you can count on. OCBC fees are not too high 35$ SGD and Citibank is quite high with 100$US per month for monthly maintenance fee. OCBC got a lower tier now and it's quite acceptable.
The main problem I have with these banks is that they're not digital first. It's not really their fault as they were founded for quite some time. It's just not a fit for businesses that set up an account in Singapore and operate outside of Singapore. For OCBC, they're unable to send the OTP outside of Singapore so it's difficult to sign up for a new account. For Citibank, the monthly maintenance fee is simply too high for a startup.
Eventually, as a CEO when you have to do some unglamorous tasks like tax filings, you end up having to retrieve all the monthly bank statements. You get charged 30$SG per statement if you didn't store properly in advance. Since I didn't live in Singapore and the corporate secretary didn't keep the bank statements, we ended up going to the bank to ask for the statements and it was a costly mistake.
What did I do?
Through one of my investor, I discovered Aspire, a Singaporean neobank. They're digital first. There's no maintenance monthly fee and you can contact to them directly from anywhere by chat.
By using Aspire now as the main bank account we can ensure that we always have our bank statements available for supporting the accounting.
By using Aspire, we dropped down our banking fees to 0$ per month.
By using Aspire, we connect our accounting software Xero and whenever I need to talk to them I can simply chat right through the interface from wherever I am.
Payment
My mistake #3
We went in 2017 with a payment gateway that was doing its job properly named Braintree. A subsidiary from Paypal. The solution they provide itself is fine. The main problem revolves around the pace of innovation and lack of speed in making payments easier for merchants.
With Braintree, updating a bank account takes a few days to send a bank statement from OCBC and Citibank.
With Braintree, there's not much tools to provided by the payment solution to process data and understand better the revenue stream.
With Braintree, we had to go through a human being to discuss and eventually receive an offer of 4.4% to process our transactions and sign the papers to get things going.
What did I do?
Through some discussions with other founders I discovered Stripe, a payment solutions company that really made some great features for me. They managed to understand several problems from many startups and did the work to make our lives easier.
With Stripe, if you need to update your bank account, you just get to the interface and just enter the bank account number. It takes a few seconds.
With Stripe, they build a suite of reports that your investors will ask all the time. Stripe built everything... From MRR, New Customers, Trials, Conversion Rate from trials, Churn Rate, Lifetime Value, I'll stop there. Lots of data processed turned into insights for you to take action instead of spending time on spreadsheets.
With Stripe, the processing fee is 3.4% versus 4.4% with Braintree.
Stripe managed to build a far superior product to me. I'm sure I'll discover even more features and functions to connect and be more efficient in processing payments with our subscribers.
This is my personal experience and I don't get paid for this article. I am just sharing my experience and how I made my decisions on some business providers that critically help to administrate the business.
Hopefully, this is helpful for some other startups.
