How Can I Do Business Without Setting Up an Entity?

Singapore is known for its business-friendly environment, robust economy, and as a gateway to the ASEAN market – attracting numerous foreign companies looking to expand their presence in Asia.

While setting up a legal entity in Singapore is the common approach, businesses may prefer to explore other options for doing business without establishing an entity, such as:

  • Utilizing Global Staffing Solutions and Professional Employer Organization (PEOs); and,
  • Outsourcing and contractual agreements

Understanding Global Staffing Solutions and PEO: How does it work?

Global Staffing Solutions (GSS) is a market entry strategy and suite of services that can make it easier for businesses to operate internationally. Key within the GSS suite is the Professional Employer Organization service.


An Alternative Path to Market Entry in Asia – PEO in China, Vietnam, Singapore, Indonesia, and India

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A Professional Employer Organization is a third-party entity that provides comprehensive HR solutions to businesses. PEOs typically handle various HR functions, such as payroll processing, employee benefits administration, compliance management, and risk mitigation.

By engaging in a contractual agreement with a PEO, businesses can delegate specific employer responsibilities, enabling them to concentrate on their core competencies while benefiting from streamlined HR management.

Advantages of engaging a PEO in Singapore

Singapore has witnessed a surge in the adoption of Professional Employer Organizations (PEOs) services in recent years – with the city-state's transparent and regulatory environment and the increasing complexity of HR management contributing to this development.

PEO’s offer businesses a valuable solution for HR management. The advantages of engaging a PEO, such as cost-effectiveness, compliance expertise, comprehensive benefits, and the ability to focus on core business functions, make them an appealing choice for companies seeking to optimize their workforce management:

Regulatory compliance

Singapore has stringent labor laws and regulations to protect the rights of employees and navigating the intricate labor regulations and adherence standards can be a daunting task for foreign businesses.

Did You Know
PEOs operating in Singapore are well-versed in these regulations, ensuring that client companies remain compliant with local employment practices.

By adopting a Global Employment Solutions strategy, the local PEO provider can ensure that employees remain compliant with Singapore's laws and regulations.

Foreign workforce management

Singapore is home to numerous multinational corporations and foreign talents. Managing the administrative tasks associated with employing foreign workers, such as work permits, visas, and immigration requirements, can be complex. PEOs offer expertise in navigating these processes, enabling businesses to focus on talent acquisition and retention.

Cost optimization

By outsourcing HR functions, companies can eliminate the need for extensive HR infrastructure, minimizing overhead costs and maximizing operational efficiency. Singapore's strong focus on cost efficiency make PEOs an attractive option for businesses.

Agility and flexibility

PEOs provide scalability and flexibility, allowing businesses to adapt quickly to changing market conditions. If a company is expanding its workforce, or downsizing, PEOs can adjust HR services accordingly to ensure smooth transitions without significant restructuring.

How engaging a PEO can help your business

PEO offers business, especially small and medium-sized enterprises (SMEs), several advantages. Key among these are:

  1. Cost-effectiveness: By outsourcing HR functions, businesses can reduce the need for an in-house HR department, resulting in significant cost savings. PEOs leverage their expertise, infrastructure, and economies of scale to provide efficient and cost-effective HR services.
  2. Expertise and compliance: PEOs specialize in HR management, ensuring that businesses stay compliant with local labor laws and regulations. They possess deep knowledge of employment-related legislation and can handle complex administrative tasks, such as payroll taxes and employment contracts, with ease.
  3. Access to comprehensive employee benefits: PEOs often provide a wide range of employee benefits such as healthcare plans, retirement savings schemes, and insurance coverage. This enables businesses to offer attractive hiring packages to their employees, enhancing recruitment and retention efforts.
  4. Focus on core business functions: By outsourcing HR responsibilities to a PEO, businesses can redirect their time and resources toward core competencies – with the increased focus on strategic areas leading to improved business performance and growth.

Outsourcing and contractual agreements

In Singapore’s highly competitive business landscape, companies are constantly seeking ways to optimize their operations, reduce costs, and gain a competitive edge. Another strategy, besides PEO, that has gained significant prominence is outsourcing through contractual agreements.

Instead of establishing a physical presence in Singapore, foreign companies can leverage outsourcing and contractual agreements. They can engage local service providers or agents to handle specific business functions, such as sales, distribution, marketing, or logistics. These agreements allow companies to access the local market while maintaining flexibility and minimizing costs. It is important to establish clear contracts and ensure compliance with local laws and regulations.

Best practices when engaging partners in Singapore

While outsourcing and contractual agreements offer several benefits, there are key considerations for businesses in Singapore.

Partner selection: Thoroughly assess potential service providers, considering their reputation, experience, track record, and financial stability. It is essential to select a vendor with a proven record of delivering high-quality services and aligning with your business values and objectives.

Clear Service Level Agreements (SLAs): Establish clear SLAs in the contractual agreement, outlining performance expectations, deliverables, timelines, and metrics for measuring success. These SLAs ensure transparency, accountability, and mutual understanding between the client company and the service provider.

Data security and confidentiality: Given the sensitivity of business data, it is crucial to prioritize data security and confidentiality in the contractual agreement. Define protocols for data handling, access controls, confidentiality, and intellectual property rights to protect business interests.

Communication and collaboration: Foster open lines of communication and collaboration with the service provider. Regularly review performance, address concerns, and maintain a collaborative partnership.

While establishing a legal entity is a common route for doing business in Singapore, foreign companies have alternative strategies to operate without a formal entity. Options such as representative offices, branch offices, joint ventures, partnerships, outsourcing, contractual agreements, and e-commerce allow businesses to enter the Singaporean market, expand their reach, and explore opportunities while minimizing costs and risks.


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