Create now, pay later is emerging as one of the most popular methods to set up virtual offices and remote businesses. More than half of our customers are using a create now, pay later option, and almost 90% of our potential clients have approved of the create now, pay later option. It is the fastest growing payment method in 2021 amoung business owners from middle income countries and we are changing our business model to account for 100% of our business on the create now pay later option by 2023.
Current corporate services providers like Osome and Sleek are charging upfront in thousands of dollars to create new businesses in Singapore. They offer a pure service-model where clients pay to receive businesses created. For e.g, Osome charge upwards of SGD 3,000 just to have one business created in Singapore. They also offer no additional value, such as checking up on the financial and operational health of the business, resources and platforms that are useful to the business or any potential customers or investors of the business. These type of capabilitie are simply not in the portfolio of what they do, as they are only online filing agents. They do not even offer to liaise with financial institutions like physical banks or neo-banks, and would prefer not to as they provide only a nominee director relationship.
Create now, pay later providers operate more as an incubator model. They allow the business owner to create a business instantly, appoint shareholders and directors and other officers at any time, provide a virtual office address and also a virtual board meeting environment to confirm the business plan and objective, before any fees are taken. These providers offer the business owners and board of directors an environment where business decisions can be discussed and confirmed, and risks are understood clearly, before any fees are paid. The board can use the entity and address to sign contracts formally, such as letter of intent, expression of interest and also sales and shareholder agreements, which are all provided by the provider.
So the business only pays fees when the board of directors confirm that the business needs to be formalised, which then automatically ensures that the contracts signed are ratified.
So only after the business is formalised can the business set up physical and online accounts with financial institutions and paymet providers, which the board would also ratify.
As the business is formalised and payments are to be made, you, as the merchant providing corporate and consulting services, will receive the full payment for the services required, minus the platform fees (just like fees paid to upwork or freelancer), and don't have to manage the decison-making process. The create now, pay later provider takes on the task of initiating board decisions, appointing providers and vendors, managing any instalment and collecting payments, so you can focus on fulfiling the contracts offered.
This article covers the basics of create now, pay later platform providers. You will learn how they work, how to choose a provider and how kimbocorp can help.
How create now, pay later platforms work
Create now, pay later platforms are presented as a platform where accounts are created by a business user. When users set up a business, they enter the relevant business information, appoint their board and then select the first set of decisions to be made at board level. They are then directed either to schedule a virtual board meeting, or to digitally-sign documents, depending on the action chosen. Virtually or Digitally, the board comes together to make that decision collectively, and then choose whether to accept the terms of the payment plan - typically based on KPI or deliverables - and complete the purchase.
The shareholders of the business will then receive a notification to deposit paid-up capital, equivalent to the cost of achieiving the KPI or deliverable. Once the paid-up capital is deposited, the provider wil receive the notification that the paid-up capital is deposited and reserved (escrowed) for them to receive, if the KPI or deliverable is achieved.
The provider can then apply to have a portion of the paid-up capital to be released to cover upfront costs. The board will receive such notification when provider applies for a pre-payment, and then vote to approve or not approve the pre-payment. The board can also schedule a time to discuss virtually with the provider during a pre-arranged video conference.
The benefits of create now, pay later
Collective and formal decison-making are vital for any business, especially if you and the board are working remotely. The members (shareholders) of any business expect streamlined and clear business decisions experiences - ones that gives them transparency when decisons are taken and flexibility when making a purchase. No only do create now, pay later platforms offer this transparency and flexibility, they also improve governance and compliance and reduce fraud, thereby resulting in increased paid-up capital to be deposited as the business progresses.
By leverage create now, pay later, you can:
- Create new businesses on-the-go: You create as many businesses as you like freely and know which ones will likely succeed. Since you are scaling up your business slowly and surely, you know which ones has more potential and can keep the ones that will likely succeed and close the ones that will not.
- Reduce your sunk costs: You make decisions collectively at board level and invest based on KPIs and deliverables. That means you can reuse the deliverables and results on other opportunities if the current business fails.
- Reach global markets: Create now, pay later platforms typically create your business in financial centers like Singapore, which you can leverage virtually and enjoy a global market breadth from day one. These centers offer absolute automony when it comes to transacting in foreign currencies like USD and EUR and allow you to access global customers transacting in these currencies easily. These centers are typically high up in rankings when it comes to trust, safety, property protection and ease of doing business, so your customers feel save when entering into contracts with you.
- Offer your board and members (shareholders) a better experience: Create now, pay later platforms offer business users a faster, more convenient way to access services that guarantees results and deliverables. Users are only subjected to a due diligence check, which also gives confidence to service providers transacting with you. There are no application fees, additional processing time, seperate applications, if you are to create multiple businesses. Create now, pay later platforms also have simple-to-understand terms of service. Returning business users can check out with ease, building as many board of directors and businesses in just a few clicks.
- Increase conversions: Business users are more likely to appoint a new director, a new member (shareholder), a new stakeholder (supplier, promoter, distributor), if they have a strong and reliable process of making decisons at board level. Businesse are more likely to progress and succeed if decisions are taken to achieve a KPI or deliverable. Finally businesses are also more likely to profit and exit if they have scale from leveraging currencies and safe corporate environemnt from financial centers like Singapore.
- Increase your success rate: Businesses need their boards to function effectively. Board directors provide executives with a different perspective and direction, drawing on their wider external experiences. The most effective boards meet regulatory requirements, keep the company accountable and provide sound strategic counsel. Truly effective boards clearly define their role and purpose, and have directors who can work well as a group while fulfilling their individual roles, such as overseeing succession planning, acquisitions and capital allocation. Within governance, the principle of effectiveness relates to the collective skills and expertise of an organisation to meet its purpose and strategy.
For business users, create now, pay later platforms offer a convenient, affordable way to create and run businesses remotely. Create now, pay later providers also take steps to ensure they offer responsible advice and assistance to users, since many of them are also appointed as resident directors of these businesses. For example, they provide information on auxillary platforms that business users can create after businesses are formalised, including networking platforms, crowd-funding platforms, digital banking platforms and crypto-to-fiat exchange platforms. They require businesses to adhers to constitutions and company acts and to promote duty of care and fiduciary responsibilites.
kimbocorp is at the forefront of being a create now, pay later platform.