Whether you are setting up a business for the first time or you are a foreigner planning to set up a branch office or relocating your business to Singapore, as terms and conditions and leasing practices vary from country to country, we hope this Leasing Guide would help you to better understand the common practices in Singapore and assist you in the process of securing your business space.
1. Planning and Ascertaining Your Requirements
Planning is essential when exploring office leasing options. It may be useful to prepare a checklist of your requirements before you embark on your office search, which may include:
- Size of office space – This depends on the number of employees in your organisation. Evaluate your long term and short term plans. You may want to allocate additional space for expansion.
- Lease Term
- Other requirements such as security, technical requirements, IT and communications infrastructure, etc
2. Reviewing Options
With the above checklist, you are ready for your office search. Allow sufficient time to review and shortlist options.
Prior to signing the lease or if you are undecided as to which shortlisted office space works best for you, you may wish to engage a workspace designer to perform a ‘test-fit’ of your shortlisted option(s) to ensure the space you are leasing accommodates your needs. The ‘test-fit’ helps to work out the best efficient use of the space. The workspace designer can also work out the fit-out cost to enable you to compare the shortlisted options based on efficiency and financial aspect.
3. Signing the Lease
Letter Of Intent
After you have identified the office space that suits your needs, submit a Letter of Intent, or more commonly referred to as the LOI, to the Landlord’s representative, indicating your interest in renting the space. The LOI should state the key lease terms such as date of possession, date of lease commencement, duration of the term, gross rent and other essential information.
Letter Of Offer
Upon receiving the LOI, the landlord will normally perform a check on the company profile and paid-up capital. Once the landlord is satisfied that the company is financially sound and both parties have agreed on the basic lease terms, a Letter of Offer (in duplicate) will be issued by the landlord along with the specimen Tenancy or Lease Agreement document for your execution. To confirm your acceptance to the lease terms, you will be required to return the signed copies of the Letter of Offer together with the security deposit, stamp fee and for some landlords, a 1 month’s advance gross rent, usually within 7 days of receipt.
Upon signing the Letter of Offer and the deposit and advance rent furnished, the premises will be secured and you will be bound by the contractual obligations under the lease. The landlord will also proceed to stamp the Letter of Offer and return 1 signed copy of the Letter of Offer together with the stamp certificate to you.
After the acceptance of the Letter of Offer, you will be given a lease or tenancy agreement prepared by the landlord’s solicitors for your execution. The lease/tenancy agreement is based on the same terms and conditions specified in the specimen copy furnished to you at the Letter of Offer stage. It indicates the standard terms and conditions which applies to all tenants in the building. In Singapore, most landlords adopt similar terms and conditions that are relatively simple to understand. However, you may seek professional legal advice at your own cost. Do note that as a common practice, the legal fee in relation to the preparation of the lease/tenancy agreement by the landlord’s solicitors is also paid by you.
Points to Note:
- The tenant typically must produce a certified true copy of their Business Registration certificate with the Accounting and Corporate Regulatory Authority (ACRA), the Memorandum of Articles, and company’s board minutes of resolution to execute the lease prior to signing the lease/tenancy agreement.
- Ensure that you have the necessary approvals, licences and permits from all relevant authorities before you carry out your business operations in Singapore.
- You may wish to refer to the Common Leasing Terminology in Singapore for reference on the key lease terms and costs associated with the lease.
4. Taking Possession and Fitting-Out
After the lease/tenancy agreement has been duly signed and all necessary sums such as security deposit paid, you will take possession of the property on the Date of Possession indicated in the lease document and carry out fitting-out works. Do note that you need to submit all plans and specifications for your proposed fit-works to the landlord and relevant authorities for approval before you can proceed with your renovation. You will also need to contact relevant authorities for getting connections such as utilities, telephone, internet, etc.
Once you have completed your fitting-out works, you can move in and commence your business operations.