Guide to Setting up a Child Care Centre in Singapore
Singapore, being a highly advanced city-state with one of the highest GDP per capita in the world, has lots of dual-income couples or families. According to the Government’s official statistics, key household income has climbed to $8,666 in 2015 from just $6,342 in 2010.
Residents, especially those where both husband and wives are working, are getting wealthier but at the same time would require additional support for their family needs such as childcare or infant care. In recent years there has been a boom in childcare centres and in this piece we discuss the key matters business owners shall take note when setting up one.
Cost Estimation and Business Viability
Before starting up a daycare centre, you need to do a cost analysis. Business viability is one of the most important things to be considered. You may require a financial consultant to do an initial assessment and financial analysis including tax implications and costing of the business, including:
A - Capital costs: Cost of the premises;
B – Operational & Indirect cost: Cost of rent, utilities, operational, staff salaries, etc.
C – Any special scheme applicable to the industry – as led by the Early Childhood Development Agency (ECDA)
If you are new to starting child care centres, it’s always advisable to consulting industry players who have been there done that. If not, an alternative would be to attend a training course by ECDA to learn about the pre-requisites. These are developed and offered by the Singapore Workforce Development Agency in coordination with key government agencies to educate the public about Early Childhood Care & Education (ECCE). This programme nurtures new entrants as well as enhance ECCE professionals.
From a few blogs we have researched, we find out the rough cost of starting up a childcare centre in Singapore is approximately $40,000-$60,000. You would likely come up with a different estimate but below gives a guidance to begin with:
- Cost to start in an existing facility - $30,000
- Supplies & Equipments - $300-$400 per child
- Educational Supplies - $4,100
- Licensing fee - $265
- Other costs - $5,000-$15,000
Prices vary because some centers use different methods. Some use specialized methods and techniques while others rely on simple tools like legos and bricks.
While some childcare centres qualify for Basic Subsidies offered by Early Childhood Development Agency, with subsidies up to as high as $440 for lower-income families. You may wish to check out more details about subsidy eligibility here. From the angle of a childcare centre operator, it does make sense to ensure your centre qualifies for ECDA subsidy.
Setting Up the Business
After you have done your due diligence and viability study, it’s time to setup your entity so you could have your bank account opened, premises rented and start signing up with parents and kids! There’re lots of business consultants available in Singapore but you would always prefer a one-stop shop that could outsource your accounting, corporate services and taxes in one house so you could focus on the business.
Piloto Asia is an international corporate services firm that not only takes care of your corporate needs, but also support you with their extensive network in Singapore. If you are looking to hit the ground running, speak to our consultants.
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Finding the Right Premises: Location, configurations and approvals
Selection of suitable premises for a day care centre is obviously crucial to your childcare business. Would it be a private residential area or near commercial vicinity? What configurations shall you have? What would be the procedure for approval?
First and foremost, you should do a need assessment in the intended area, whether there be enough children who are in need of a day care centre and the required services. The locality should be calm, peaceful and away from noise and traffic.
For the place itself - It should have spacious rooms, roomy indoor space to accommodate a large number of children. The hallways and passages should be safely constructed so that infants can roam about easily. You should have adequate facilities such as; diapering area, separate washing area, kitchen, play area, office, storage room, sick room etc.
Residential vs Commercial vs Industrial
1 - Private Residential Area:
If you intend to select a private residential area for a daycare centre, you need to know the nature of the neighborhood:
Singapore in mainly divided into a few areas and suburbs: The City, Central, The North, The East and The West. Different neighborhoods have different factors that might affect the start-up of a daycare centre.
The City includes the business district with hustle and bustle and it is found at the island’s southern point with a cosmopolitan lifestyle. You will generally find a huge business crowd here. Shopping centres, restaurants and entertainment places are easily accessible near Marina Bay, Clarke Quay and Robertson Quay. However, the City is considered the most expensive in Singapore.
Central area of Singapore includes the districts of Novena, Bishan, Ang Mo Kio, Serangoon and Thomson. Many expats are found here and transport is easily available but public transports and roads are very busy during rush hours. The city can be accessed easily from the central area. Shopping facilities, restaurants and parks are in abundance.
The North area includes a number of Americans, where the Singapore American School is situated. Districts 25-28 are a part of The North: Woodgrove, Seletar, Sembawang, Woodlands. The area is 12 miles away form the city. Malaysia and Singapore are connected by a causeway bridge that can be seen from Woodlands. Transport is not easily available due to heavy traffic.
The East includes the districts of Bedok, Pasir Ris, Marine Parade, Tampines and Changi. Landed properties (where affluent Singaporeans stay) and HDB flats are available in this area. Streets are narrow with greenery. Diverse population is found in this area. Excellent schools, parks, restaurants and shopping areas are available.
The West comprises of 21-24 districts. This is a densely populated area with excellent facilities. Singapore Zoo and Jurong Bird Park is located in the West. Rentals around the docks are affordable for families but they are quite noisy.
You shall choose your location wisely, and have it accommodating a decent and diverse group of community. For private residential premises, you need to go to the Urban Redevelopment Authority (URA) for approval of the use of the premises.
2 - Commercial sites:
Some of the commercial sites in Singapore are owned by the Housing and Development Board (HDB). Generally, HDB is responsible for public housing in Singapore. However, if you select a commercial site for the daycare centre which is owned by Housing and Development Board (HDB), then there is a requirement to obtain approval from HDB.
3 - Industrial Premises:
If the centre is situated within the industrial premises, you need to obtain approval from National Environment Agency (NEA). It will be an extended approval of one initially taken from URA for the change of use.
Approvals (where applicable)
Child care centre should be on the ground floor of the building. If it is not on the ground floor, you will need to take approval from Director of Social Welfare.
If the centre is in a rented building, the rental contract should be of not less than 3 years and the landlord should be aware of you setting up a child care centre in his building.
Clearance from Government Departments
Once you have selected suitable premises for a child day care centre, you need to do the following:
1- Apply for change of use:
You need to apply for a change of use to the Chief Planner, Urban Development Authority, Development Control Division, Singapore.
2 - Submit a Floor Plan:
When the approval is obtained from URA, you need to engage an engineer in making a floor plan and incorporating physical requirements which will be submitted to the relevant Government Departments. You need to submit the floor plan to
- Central Building Plan Department (CBPD) for getting clearance on sewage and drainage works and environmental health matters.
- Land Transport Authority (LTA) for parking facilities
- Singapore Civil Defence Force (SCDF) for fire safety and security
- Sewage Department for sewage works
3 - Getting Child Care Center License:
- You need to register the child care business with ACRA (where your accountant or corporate secretary would be able to assist) before you may apply for the child care centre license.
- Submit the license application via License One when you centre has been given the Temporary Occupation Permit or Certificate of Statutory Completion (TOP/CSC).
- If you are setting a child care centre as a community service, you can apply for financial funding.
- When you submit an application for the license, you will get an email from Early Childhood Officer for a pre-licensing visit.
- Your day care centre should be ready to be visited for pre-licensing.
- Your child care centre license will be issued within 14 working days after submitting complete documents and you will be notified by ECDA.
- No operational activity should take place before the formal approval of the Child care centre license.
- If the person starts regulating the child care centre prior to the approval of the license, he/she will be charged penalty.
- Once the license application is approved, you will be able to administer the Government Child Care Subsidy Scheme for eligible parents.
You need to set the levels of the staff as per their qualification, age, health, personality, experience etc. The following staff is generally required for early childhood care education.
- For children aged above 18 months to 6 years, you need to hire:
- A qualified trained supervisor with a diploma in Pre School Education Leadership or in Early Childhood Care Education, along with a teaching experience
- At least 3 programmed staff who is certified by ECDA
- For infant care (aged 2 months to 18 months) and children aged above 18 months to 6 years 11 months, you need to hire all the above in addition to:
- 1 programmed staff trained at EY1// Certificate in Infant/Toddler Care (CITC) level/ State Registered Nurse (SRN) with Early Years Development Framework (EYDF) certificate
- For solely infant care (aged 2 months to 18 months), you need to hire all the above in addition to:
- 2 programmed staff trained at EY1// Certificate in Infant/Toddler Care (CITC) level/ State Registered Nurse (SRN) with Early Years Development Framework (EYDF) certificate
We have covered for you most grounds about setting a childcare here in Singapore, including viability, premises, suggested configurations and government clearance. If you have other questions, you may always contact ECDA Child Care Link at (65) 6723 3804. If you decide it’s time to start and incorporate your company, speak to our friendly consultants today!
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