how to start a food business in singapore

How To Start a Food Business in Singapore: A Quick Guide

Both foreigners and locals can’t get enough of Singapore’s selection of restaurants. The country’s multicultural heritage guarantees a wide selection of dishes. Five-star restaurants and hawkers in rows have equal popularity. With Singapore’s F&B industry set to grow in the coming years, starting your own restaurant business is truly a great idea. Learn more about business loan with our business loan guide.

Here is everything you need to know to start a Singapore food stall or restaurant.

Company Incorporation

Before building food retail outlets and applying for a food shop license, business owners have to incorporate their food and beverage business with the Accounting and Corporate Regulatory Authority (ACRA). Here are the basic steps towards company incorporation.

1. Business Name and Identity

Decide on your business’ main niche to finalize its name and identity. All successful food service establishments specialize in flavor, meat, cultural influence, and other niches. Identify the one that suits you and your future restaurant the best and name its brand.

Business identity is important because it achieves brand cohesiveness and an F&B image to work with.

2. ACRA Name Registration

Your ACRA business name registration uses the same corporate-oriented process. ACRA will ask you about the most significant Singapore Standard Industrial Code (SSIC) suitable for your business. To apply, you can use ACRA’s online business registration portal, BizFile.

ACRA may ask you for the following specifics:

  • Nature of business
  • Number of owners
  • Current capital
  • Your business’ long-term plan

Once your application has ACRA’s approval, you can start your company’s incorporation, which you can select from the following:

  • Sole Proprietorship/ Sole Trader.
  • Ordinary Business Partnership.
  • Limited Partnership (LP)
  • Limited Liability Partnership (LLP)
  • Private Company Limited By Shares

3. Open a Business Account

You will receive your ACRA business profile package if you have complied with ACRA’s additional requirements to obtain a business profile. This includes your registration number or Unique Entity Number (UEN), which is essential when opening a business account with a local bank. 

A separate business bank account records your business spending accordingly and divides your finances between personal and business purposes. Most bank account requirements are similar to ACRA’s business file procurement requirements. Here’s the complete guide and list of prerequisites

 

Licenses and Certifications for Retail Food Establishments

You need several licences to operate coffee shops and food stalls in Singapore to ensure all establishments comply with food safety, basic food hygiene, and other guidelines from the Singapore Food Agency (SFA) and other government agencies.

1. Food Shop License

The Environmental Public Health Act commits all food businesses in Singapore must apply for a Food Shop License from Singapore Food Agency. Your SFA Food Shop License proves that all food sold on your premises comes from clean storage and processing equipment and will not be the main cause of any food-related diseases.

You can submit a full application using GoBusiness SG and prepare and submit all the requirements. Keep in mind that SFA automatically rejects Food Shop Licence applications with incomplete documents. 

Once approved, you can schedule your pre-licensing inspection and receive a Food Hygiene Officer certificate if your establishment succeeds and pay S $195 for your Food Shop Licence. You may receive your license within two weeks

Any restaurant, cake shop, eating house, coffee shop, and snack counter needs a Food Shop Licence. In addition, non-establishment restaurants like food caterers and mobile food trucks need a licence.

All food establishments have to renew their food licence every year before expiration.

2. MUIS Halal Certification Licence

Food establishments that want to cater to Muslim customers must obtain a Halal certification verifying that the establishment adheres to Islamic law.

The certification requires businesses to hire at least 2-3 Muslims as employees. Then, the business must comply to the ten principles of the Halal Quality Management System. Lastly, all the establishment’s raw materials must have proper documentation attesting to its Halal quality.

Halal Certifications cover one of the following areas:

  • Product Certification
  • Eating Establishment Certification (which F&B owners need)
  • Food Preparation Area
  • Poultry
  • Import/Export Endorsement
  • Storage
  • Food Manufacturing Plant

smiling waiter serviceperson in front of cafe

3. Petroleum/Flammable Materials Storage License

Liquefied Petroleum Gas (LPG) is a staple among most restaurants that require frying and grilling. If your restaurant uses one, you need the Petroleum and Flammable Materials license from Singapore’s Civil Defense Force. 

The Civil Defense Force requires businesses to have approved LPG installation plans and a Fire Safety Certificate. 

Additionally, you need a professional Engineer’s Certification document and a Letter of Undertaking on Safe Handling of LPG Installation.

If your restaurant uses gas-powered stoves or ovens, you’ll need to comply with these requirements.

4. Liquor License

The Singapore Police Force (SPF) requires all establishments serving liquor to apply for a liquor selling license according to the Singapore Liquor Control Regulations 2015. There are various categories for liquor licenses, such as 1A liquor licences focused on liquor selling and consumption in the same establishment and 3B liquor licenses concentrating on en masse liquor selling.

Liquor License Officers only approve liquor licenses for applicants with zero convictions or offenses, have cooperated with authorities in investigations during the liquor license’s issuance, and have no history of license suspension.

Here’s the complete application process

5. Public Entertainment Establishment License

Bars with live or loud recorded music are considered public entertainment establishments that need a special operating permit. In addition, any restaurant or bar operating late at night in commercial districts needs a Public Entertainment Establishment license from SPF.

Public entertainment licences have varying categories. Nightclubs and other outlets that have loud music are a Category 1 Public Entertainment Establishment. Amusement centers, paintball games, and air-soft gun games establishments are Category 3 public entertainment establishments.

Here’s a complete list of establishments according to their license categorization.

6. Tobacco License

The Health Sciences Authority requires all tobacco-selling establishments to obtain a license from their website. The license ensures that all retail outlets sell tobacco from their establishments, only employees access the tobacco and comply with display and presentation requirements regulations.

The HSA portal grants amendments, renewals, and cancellations of tobacco licenses for business establishments.

Capital

You need sufficient capital before you can start your restaurant business in Singapore. We highly recommend having capital that addresses the following:

1. Rental

Most establishments in Singapore can range between 1,000-1,200 per square foot, which means you’ll be paying according to the following values:

  • Core Central Region (CCR): S $12 – S $18 per square foot
  • Rest of Central Region (RCR):S $10 – S $22 per square foot
  • Outside of Central Region (OCR): starting from S $6 per square foot

CCR is Singapore’s main commercial area occupied by major commercial buildings and has a mature environment. 

RCR are properties outside of districts 9, 10, 11, the Downtown Core Planning Area, and Sentosa. 

OCR includes Bedok, Changi, Loyang, Upper Bukit Timah, and others that you can find on this list.

If you’re lucky, you can buy commercial properties, but investors own most of the commercial properties in CCR and RCR. Renting is your business’ best option for now.

2. Manpower

You’ll need employees to cook food, handle logistics, manage the branch with you, do accounting, and more. Here are the typical prices of Singapore’s unskilled and skilled labor below:

  • Part-time: S $7/hr
  • Full-time: S $1,800 – S $2,000 monthly
  • Chefs: S $5,000 – S $6,000 monthly
  • Line Cooks: S $3,000 – S $4,000 monthly

You’ll need to include year-end bonuses and business shares if your business wants to introduce incentives. By law, employers must add 16% more to their employee’s CPF contributions.

To avoid overwhelming your finances when hiring restaurant staff, you can do the following:

  • Performance-Driven Metrics: Employees perform better with auto-raise, merit-oriented programs and reveal employees who need improvement.
  • Key Performance Indicators: Data-driven KPIs reveal to business owners the best and worst-performing areas in their business. Identify them to find only productive staff suitable for the job.
  • Cross-Training: Performance-based metrics incentivize employees to learn new skills that raise their pay and help your restaurant continue running even with employee shortages.

3. License

License registrations take up the least costs in your capital. All restaurant businesses in Singapore need a National Environment Agency (NEA), which costs S $195 yearly.

In addition, your employees must undergo the SFA Food Handler course (S $21.40 for Singaporeans and S $107 for foreign workers).

A Category 1 Liquor License costs about S $1,740 every two years for license renewal and Category 2 Liquor Licenses cost S $1,329 for every two years. You’ll undergo the same licensing procedure we’ve explained above.

Lastly, any business that achieves over S $1 million in profits per year will need to register for Goods and Services Tax.

Your Petroleum and Flammable Materials Storage License has varied costing depending on the amount you use. Here’s a categorization list to help you:

  • 500 liters and below – S $184
  • Above 500 liters but not exceeding 5,000 liters – S $242
  • Above 5,000 liters but not exceeding 50,000 liters – S $413
  • Above 50,000 liters but not exceeding 250,000 liters – S $862
  • Above 250,000 liters but not exceeding 450,000 liters – S $1,320

Here are the total costs for public entertainment license costs and tobacco license costs.

4. Other Expenses

Restaurants need to set aside at least S $2,500 – S $3,000 monthly for miscellaneous costs. In addition, they must set aside enough utility bills that can cost about S $1,200 – S $2,500, and enough cash from their revenue for raw ingredients. Most businesses peg their raw ingredient costs at 20-25% of their revenue, excluding any logistics costs.

Operational Management

Food shop premises, proximity to food factories, hiring, and other essential factors are all part of operational management. 

1. Locality

Excellent parking, traffic-free roads, and distance between residences and workplaces play a huge factor in your restaurant’s success. Focus on finding accessible localities you can address the moderate to high demands for your dishes. Find the best locality by performing local research on an area’s competing restaurants, specializations, local demand, and other factors.

2. Staff Hiring

Singapore has many competitive unskilled and skilled employees. Restaurants usually need the following professionals to operate effectively:

  • Executive Chef/ Kitchen Manager
  • Restaurant Manager
  • Server
  • Bartender
  • Host
  • Dishwasher
  • Bookkeeper or Accountant.
  • Maintenance

However, you can scale down the number of your employees and restaurant responsibilities by implementing cross-training. For example, your bartender can be your host and restaurant manager simultaneously (and if they can effectively handle the added duties).

3. Supplier Networks

Establishing supplier networks isn’t rocket science if you follow these steps below:

  • Categorize your dishes: Categorize your food according to perishables, non-perishables, demand, and preparation time. These will help you find suppliers and prioritize them in your list effectively.
  • Use similar base components: If you’re a pork barbecue restaurant, you can save on ingredients because you have identical base components. Using similar base and completely-consumed ingredients improves your inventory, reduces wasted ingredients, and lowers overhead costs.
  • Only work with quality suppliers: Affordable suppliers initially look attractive, but paying for less doesn’t mean you’re paying for value. Be strict with your ingredient quality control and work only with highly reliable suppliers.
  • Supplier accuracy and dependability: Work with suppliers who consistently give you the correct number of ingredients and deliver on schedule. Usually, these costly suppliers are the backbone of many successful F&B endeavors in Singapore.

4. Business Partnerships

Your restaurant and suppliers are mutual partners that mutually earn because of each other’s value-adding service. On the other hand, business partnerships involve other businesses outside your industry that benefit from your operations. For example, food delivery services, food packaging services, and cloud F&B accounting firms have services for your industry specialization. 

Consider partnering with businesses if you need to outsource specific business operations. It will add to your balance sheet, improving your restaurant’s quality and solidifying its logistics.

handsome retail worker service staffs holding desserts

Singapore F&B Hygiene Standards

Singapore’s establishments must offer only the highest hygiene standards for food preparation and service. All establishments must be compliant in the following areas.

1. Singapore Food Hygiene Standards

SFA provides licenses to food establishments from hawkers to 5-star restaurants. It created the Food Safety Management System (FSMS) to raise and maintain Singapore’s high hygiene level in the food retail and catering industry. SFA requires all restaurants to submit their FSMS plans as part of their licence application and renewal

2. SFA Training For Food Handlers

All food handling staff must finish the Food Safety Course Level 1, which consists of six hours of course work and an hour of assessment. Their statement of attainment (SOA) serves as their licence to work in any restaurant.

All chefs, line cooks, servers, kitchen helpers, and waiters are food handlers who require SFA Food Safety Course Level 1 training and registration before they can serve. Employees can easily use the GoBusiness Licensing website and their SingPass account to register for the Food Handler training and registration licensing.

3. Food Hygiene Officers (FHO)

FHOs is not part of any restaurant. These officers inspect establishments to ensure their compliance with hygiene and sanitation standards. 

All restaurants and hawker stalls must submit themselves to any scheduled FHO inspection.

Closing

It takes some work to open your first Singapore restaurant, but you can achieve your dream business by saving up for capital, taking the time to register, and finally establishing your F&B. Review this guide once again if you’re ready to start soon!

Key Takeaways

  • All Singapore restaurants must register with ACRA and open their respective business accounts.
  • Restaurants must have their respective licences for serving food, alcohol, tobacco, and using and storing LPG.
  • Restaurant owners must have enough capital for property rental, manpower hiring, licence payments, and other expenses.
  • All restaurants must comply with local F&B hygiene standards in the country.

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