Venturing overseas to open new markets is exciting but it can also be filled with uncertainties. Cambodia is a fast-growing economy that offers abundant opportunities, but there are things that business owners need to look out for. This is especially important if they are expanding overseas for the first time. Among others, they need to consider the regulatory processes and the availability of infrastructure and services.

Four decades after the Cambodian civil war ended, Cambodia is welcoming foreign direct investments. While the city is now dotted with new, sleek high-rise buildings, back-end policy- making has not exactly caught up with the gleaming facade. The application to start a business in Cambodia can be a slow process, with company incorporation approval, company registration for taxation purposes and other critical procedures taking longer than in their home country. An example of this is the application for electricity supply. Electricity should flow relatively easily in a completed office building, however, companies that are building or taking over new properties may have to wait up to six months to receive a permanent supply of electricity. This includes the wait for application approval, which can take longer than the actual connection and associated works.

To put the above into perspective, consider the statistics released by The World Bank. According to the World Bank, in 2010, Cambodia scored 50.12 in the Distance To Frontier, a measurement that indicates the level of regulatory performance with respect to the ideal (100), across all economies across all time. Over the years, however, the country has made great strides; it reached 54.79 in 2017, translating into a laudable four-point improvement for a new economy. By comparison, Vietnam was at 58.14 in 2010 and is 63.83 in 2017. Thailand was at 73.03 in 2010 and is at 72.53 in 2017. At the current pace, it will not be long before Cambodia catches up with the rest of the region.

Transport infrastructure is usually an important area of consideration for business owners. Since 2008, the Cambodia government has been upgrading roads around the country. This is most visible in Phnom Penh, the capital, though the lack of good road signs does cause some concern. The condition of roads in outlying areas, too, still has room for improvement. Trading companies, however, will be happy to note that Cambodia is well-connected to the rest of the world by sea. Situated 224km from Phnom Penh is the Port of Sihanoukville, a well-regarded deep-sea port. The port, in its present condition, can accommodate 950,000 tonnes of cargo per year, twice its current traffic. This is good news, as it implies that trading volume, and hence, companies that depend on shipping for survival, will be able to grow without considerable difficulty in the years to come.

In terms of Cambodia’s Internet connectivity to the rest of the world, there is reason to cheer. After years of spotty connection, Cambodia will soon receive a boost in capacity, with the completion of the country’s first underwater fibre optic cable. A multinational project saw landing stations built in Sihanoukville in Cambodia, Rayong in Thailand and Cherating in Malaysia, all connected via a 1,300km network of undersea cables. The Malaysia-Cambodia-Thailand Submarine Cable System (MCT) will connect with the 20,000km Asia-America Gateway (AAG), bringing global data almost instantly to Cambodia’s doorstep. This initiative is expected to bring the capacity to 30 times the current level, leading to more data traffic in and out of Cambodia and translating to business growth.

Like Ho Chi Minh City in Vietnam and other emerging cities around the world when they opened themselves to the world, Phnom Penh is experiencing a rise in property prices. However, smaller companies exploring business opportunities in Cambodia need not worry about leasing expensive offices to base themselves in. Many service providers now offer serviced offices and co-working locations, essentially shared offices for business owners to conduct their businesses in. These facilities come complete with furniture, utilities and the Internet, all for a small monthly fee. This will definitely be a welcome development for business owners aspiring to set up shop in Cambodia.

In short, there are great opportunities to leverage in Cambodia, but there are also challenges to overcome in the nascent economy. The processes of getting things done may not be the fastest in the world, however, companies that endure this inconvenience will find themselves the pioneers in what promises to be one of the most exciting business destinations in Asia.

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The desire to be one’s own boss. Financial freedom. The urge to pursue one’s passion. Whatever the motivation, more people are turning to entrepreneurship than before. According to figures from the Accounting & Corporate Regulatory Authority (ACRA), between 4,661 and 6,369 business entities were set up every month between January and June 2016. While getting excited about potentially making it big in the world of business, budding entrepreneurs will have to plan their steps carefully. One of the early considerations is obtaining a registered address for the business.

ACRA mandates that any legal entity that is registered with it must carry a registered address. Unless the business has received investor funding and is ready to rent an office or a warehouse, the owner of a startup typically works from home. This leaves one without a ready business address, and will have to source for something that can be used. There are several considerations in choosing a registered address. While anyone is free to use a home address as a business address, it may not be the best choice. Image is important to a business and nothing can be worse than having a residential address show up on a professionally-designed business card or a corporate website that is accessible by prospective clients and partners around the globe.

Even if the address is not displayed on marketing material, potential investors might be put off by a residential address when they search for the startup’s publicly-available business profile on ACRA’s BizFile website. Starting a business is never easy and it would help matters if the business came with a professional business address. For a small fee, a startup could consider using the virtual office service of a professional accounting firm. All mail destined for the business arrives at the firm’s office for self-collection. For the business owner’s convenience, there is an option of having the service provider forward the mail to his or her actual home address. Engaging such services not only gives the business owner a prestigious address to work with, it also accords the entrepreneur privacy. It prevents the home address from being publicized, and attracting potential spam mail.

A virtual office address serves not only local startups but also foreign companies that maintain only a small presence in Singapore. A company that is involved in trading may base itself in Singapore, with just a country manager taking care of the sales and administration, while the actual movement of goods takes place elsewhere in the region. The same scenario applies for a manufacturing firm dealing with low-value goods, where siting the factories in neighbouring countries to leverage the lower cost of goods and labour makes perfect business sense. A virtual office service may also prove useful to a foreign firm that is exploring the prospect of doing business in Singapore. While it registers a representative office with ACRA and conducts market research and feasibility studies, subscribing to a virtual office address helps keep costs low, freeing up funds for more critical groundwork.

The advantages of using a virtual office are many. A virtual address has helped many startups bloom into larger companies and will continue to do the same for years to come.

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Singapore has consistently been described as one of the best places to do business in. With the proliferation of the Internet and easy access to information, more people than before are entering the world of business. It helps that more young people are gaining the entrepreneurial mindset today. According to records from the Accounting & Corporate Regulatory Authority (ACRA), between 4,661 and 6,369 business entities were set up every month between January and June 2016. While the Singapore government makes it easy for aspiring business owners to set up legal corporate entities themselves, it pays to plan carefully. This is especially important when dealing with Private Limited companies, where the legal obligations on the part of company owners are much more complex than those of sole proprietors and partners.

It is very easy for anyone to set up a Private Limited company on BizFile, ACRA’s one-stop business portal for business owners and the public. Provided the name chosen for the company does not contravene rules set by the government and the aspiring owner has all the company and personal details on hand, a company can be set up within an hour on BizFile. It costs only $15 to register a company name and $300 to incorporate the company. Technology has made this initial setup process hassle-free, seamless and simple. What many people do not realise is that while it is extremely easy to jump onto the business bandwagon, it is also extremely easy to land into trouble when legal obligations come their way later.

ACRA has statutory obligations in place that require companies to meet. The Singapore Companies Act mandates that every company has to appoint at least one local Company Secretary within six months of incorporation. It also has to hold its first Annual General Meeting (AGM) within 18 months. While these requirements sound straightforward, fulfilling them might not be so. When a business owner is busy running the day-to-day affairs of the business, it is easy to overlook such legal aspects. This is especially true for a new business owner working alone. When the business is new and the owner Whis the sole Director, salesperson, marketer and operations person, many things will appear to overwhelm him or her. When one is chasing sales to meet month-end closing, the last thing that one wants to worry about is conducting an AGM. Sadly, if legal obligations are not fulfilled, penalties may be imposed on the business.

Conducting an AGM is more than just sitting down and reminiscing about the company’s activities in the past year. Someone will have to prepare the meeting agenda, the meeting will have to follow a structured format and minutes will have to be taken. Eventually, a report will have to be produced and circulated to the shareholders. An AGM is a serious affair that will be set in stone in the annals of the company. There are other matters that new business owners will have to worry about too, like establishing and maintaining statutory registers and filing changes within the company with ACRA. It would help the business owners greatly if such specific tasks like transferring and issuing of shares, appointments and resignation of officers and even the changes in the Memorandum of Articles and Association (MA&A), were recorded by a company dedicated to these tasks.

It makes good business sense to leave such administrative tasks to an outsourced company secretarial services provider. Doing so offloads the legal burden from the business owners, ensures they do not miss any statutory deadlines and allows them to focus on growing the company. In the long term, this ensures the growth, profitability and sustainability of the company.

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Singapore has been actively attracting foreign direct investment (FDI) into the country and encouraging entrepreneurship among its population. Various government agencies have been taking initiatives in their respective fields that incentivise business owners to take action. In particular, the Inland Revenue Authority of Singapore (IRAS), the nation’s tax authority, has been instrumental in sweetening the deal for companies contemplating expansion into Singapore, as well as people intending to go into business.

Singapore already has one of the lowest corporate tax rates in the world. Standing at 17%, companies can devote more of their profits toward their operations and grow themselves. This compares well with the tax rates of other countries like United Kingdom (20%), United States (40%) and Australia (30%). In fact, the Singapore corporate tax rate has been falling steadily over the past decade. From 20% in 2005, it fell to 18% in 2008, then to 17% in 2010. The low tax rate has not only successfully attracted many multinational companies to set up base in Singapore but also encouraged many people to enter the business world, safe in the knowledge that they do not pay overly high taxes.

In addition to the low corporate tax rate, IRAS, as the tax agency is commonly known, has in place a set of tax incentives that make Singapore an even more attractive place to do business in. Under the Tax Exemption Scheme For New Start-Up Companies, newly-incorporated companies enjoy full exemption on the first $100,000 normal chargeable income, and another 50% exemption on the next $200,000 normal chargeable income, for the first three years of operation. This scheme is applicable to all companies that are not involved in investment holding and not developing properties for sale, investment or both. IRAS recognises that the startup phase of any business is the most crucial stage, and that giving businesses a hand in paying their taxes will help reduce their financial burden.

Another scheme worth noting is known as the Corporate Income Tax Rebate. As the name implies, this rebate aims to help businesses defray the rising cost of doing business. The rebate level was previously set at 30%, however, in response to the challenging business environment, the government enhanced the scheme in 2016. Valid for the Years of Assessments 2016 and 2017, all companies enjoy a 50% rebate on the payable corporate tax. The rebate will be capped at $20,000 per Year of Assessment. It is hoped that by helping companies reduce their corporate tax burden, they will be able to restructure and improve their finances.

Apart from tax incentives, IRAS has other schemes that aid employers in one way or another in doing business. For example, to allow companies to cope with rising labour costs, IRAS now co-funds 40% of wage increases given to Singaporean citizen employees earning up to $4,000. Even though it is a temporary measure, the Wage Credit Scheme (WCS) nonetheless helps companies in times of need. A popular grant that is given to companies is the Productivity and Innovation Credit (PIC) Scheme. Intended to help defray their operating costs, the government pays companies 40% of qualifying expenses. An interesting tax incentive that is targeted at bigger companies is the Mergers & Acquisitions (M&A) Scheme. In a bid to encourage companies to grow via mergers and acquisitions, the government has raised the cap for qualifying M&A deals from $20M to $40M. In addition to providing a 25% tax allowance on such deals, stamp duty relief is also given.

The above is but a short list of incentives and grants given by the Singapore government to encourage the growth of businesses. The government is going all out to not only woo foreign companies but also to get its people to go into business. It is up to them to respond and make the right choice.

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Every business owner knows the importance of bringing sales into the company and every entrepreneur realises the importance of growing the organisation. To achieve these aims, a business needs to track its figures. Figures do not only help one keep track of incoming and outgoing payments, they also allow Management to review monthly and quarterly performance to check on the health of the company. Accounting becomes a crucial and handy tool to help business with these important tasks.

Contrary to popular belief, accounting is more than punching numbers into a balance sheet or a profit-and-loss statement. While it is certainly true that basic data entry – a simple process using something even as rudimentary as a spreadsheet – suffices for a one-man setup running a blog shop, things become a lot more complicated when the business takes the form of a Private Limited company. It becomes even more so when multiple shareholders possess interests in the business. Running a Private Limited company entails keeping proper accounting records, so that revenue and expenses are properly accounted for and that annual filing is performed expeditiously and with accuracy. In an age where financial mismanagement plagues many established organisations and corporate governance is more important than ever, it is imperative that companies hire qualified accountants to take care of their financial matters.

There have been many cases in which aspiring entrepreneurs, driven by passion and enthusiasm, enter the world of business but do not ensure their back-end systems are adequately set up. In their misguided rush to incorporate their companies, they do not only fail to put operational structures in place, but also, more importantly, overlook the need to create proper accounting systems. This is especially true for small businesses providing personal services. Revenue and expenses are not recorded properly or at all, money is indiscriminately withdrawn from the corporate bank accounts to pay for the owners’ personal expenses, and there is absolutely no synchronisation between company accounts and bank statements. The entire business descends into a financial quagmire and when the time comes for annual filing, the business owners are hardly in a position to do so. By the time warning letters and threats of fines and legal proceedings arrive, it may be too late to reverse the course. It is thus very important for business owners to recognise the need for proper accounting early in the process.

Since the Singapore government created the Singapore Qualification Programme (Singapore QP) and the Singapore Accountancy Commission (SAC) in 2013, the level of professionalism in the accounting landscape has been raised. The qualifying examinations are now more rigourous and entry into this profession, more difficult, than before. The SAC, as the statutory board with oversight of the accountancy profession in Singapore, leads initiatives that raise the bar in this knowledge-based economy and make Singapore a global accountancy hub. Put together, these developments point to the creation of a robust system that upholds the high standards of corporate governance in the country. Notwithstanding the initiatives from the government, the intended aims can only be achieved if individual companies play their part to make themselves useful and responsible corporate citizens. By hiring properly-qualified Chartered Accountants of Singapore (CA Singapore), business owners ensure that their accounting needs are seen to with the highest standards of accountability and accuracy. With a sound accounting system in place, their businesses will be able to grow and add value to the business ecosystem and the economy at large.

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