Starting a Business in Singapore: A Comprehensive Guide

Do you have plans to start a new business in Singapore? In this guide, let us help you to get a clear understanding of all the necessary information that you will need in order to get your business started legally in Singapore.

Part 1: Getting Started

What is a company in Singapore?

A company is a legal entity and are considered to be separate and distinct from its shareholders and directors.

According to IRAS, a Company includes business entities that are incorporated or registered under the Companies’ Act or any law in force in Singapore. Normally, the business entity will have the words “Pte. Ltd.” or “Ltd.” as part of its name. 

In Singapore, there are a few business types that you can choose to set-up, such as: A sole proprietorship, A Private Limited Company (Pte. Ltd.), a limited liability Partnership (LLP).

While Sole Proprietorship and partnership businesses are considered legal in Singapore, the business itself is not considered a company as they are not separate legal entities from the business owners or partners who own the business. 


What are the different types of businesses that I can start in Singapore?

In Singapore, there are 3 main company types that business owners who are starting out can choose from: A sole proprietorship, A Private Limited Company (Pte. Ltd.), a limited liability Partnership (LLP).

Different Types of Companies in Singapore

1. Sole Proprietorship

A sole proprietorship is the least complicated form of company to start in Singapore.

A sole proprietorship is a company that can be owned and controlled by an individual, a company or a limited liability partnership. There are no partners in the company. Instead, all the parties involved in setting up and running the company are considered as owners with equal responsibility to the company. There are no shareholders and directors in the company, only owners with equal responsibility. 

Sole proprietorship companies need not prepare financial reports or submit annual filings to ACRA. Instead, sole proprietors have to renew their business licenses every 1 – 3 years.

Click to read more information on:
The Sole Proprietorship business type in Singapore
Registering for a Sole Proprietorship business

2. Private Limited Company (Pte. Ltd.)

A Private Limited (Pte. Ltd.) Company is a company entity that can be owned by multiple individuals or another company.

In order to register a Pte. Ltd. Company in Singapore, there are a few requirements that have to be fulfilled:

To learn more about the requirements to fulfill for registering a Private Limited Company in Singapore, see: Detail Requirements for Registering a Pte. Ltd. Company

A private limited company is recognized as a separate legal entity in Singapore. It is considered as a company. Shareholders will own the company in their agreed-upon shareholding.

A private limited company will have to prepare annual financial report and hold Annual General Meetings annually for the directors to report to the shareholders on the status of the company. The Annual Returns will need to be filed to ACRA yearly or the company will risk being penalized or get struck-off by ACRA.

Click to read more information on:
The Private Limited (Pte. Ltd.) business type in Singapore
The Annual Filings required for private limited companies in Singapoire

Procedure for Incorporating or Registering a Private Limited (Pte. Ltd.) Company in Singapore

3. Limited Liability Partnership (LLP)

Limited liability Partnership (LLP) company can be owned by multiple partners. It is a separate legal entity from the partners who own it.

Instead of having equal responsibilities among the partners, in an LLP, partners will need to draft up a special and specific agreement for their partnership. Normally, the partnership agreement is drawn up by a lawyer.

The agreement will determine the different responsibilities that the partners will have in the LLP. For example, a partner may, however, be held personally liable for claims from losses resulting from his own wrongful act or omission, but will not be held personally liable for such wrongful acts or omissions of any other partner of the LLP. This is different from a sole proprietorship, where the owners will be held equally liable.

Although an LLP is not required to file annual returns to ACRA, an LLP is required to keep accounting records, profit and loss accounts and balance sheets that will sufficiently explain the transactions and financial position of the LLP. In addition, the LLP must submit to the an annual declaration of solvency or insolvency (i.e. being able or unable to pay its debts respectively) which will be made available to the public.

Click to read more information on:
The Limited Liability Partnership (LLP) business type in Singapore


Why start a business in Singapore?

Singapore is a very attractive location for businesses to operate from. Singapore has always been very welcoming towards businesses, both big and small.

There are many opportunities, loans and grants that are offered in Singapore for businesses. This is crucial, especially for start-ups and new companies who need all the help they can get to get their business going and on-track.

Private limited (Pte. Ltd.) companies, have many additional benefits as well that they can enjoy when they incorporate in Singapore, such as:

1. Low Tax Rates
In Singapore, corporate tax rates are very reasonable, capping at a maximum of just 17% of income.

For newly incorporated or registered Private Limited (Pte. Ltd.) companies, there is a 0% tax rate on the first S$100,000 of income. 

This is extremely beneficial for companies as it helps to ensure that the cash flow in the company will be sufficient for further expansion and growth.

Note: All income for Sole Proprietorship business types are declared under personal income tax in Singapore and will be subjected to personal income tax rates instead.

2. Your company can be 100% foreign owned
It is mandatory for Private Limited Companies in Singapore to appoint at least 1 local Singaporean or Permanent Resident as a local director in order to be able to proceed with the incorporation or registration of the company.

However, while there must be a local director that is appointed, there is no such requirement for shareholders. Shareholders, who are the owners of the company, can be foreigners. This means that the company can be 100% foreign owned.  

Note: In Singapore, it is mandatory for sole proprietorships to have at least 1 local Singaporean or Permanent Resident as the owner of the business. For Limited Liability Partnerships (LLPs), foreigners will need to appoint a local resident manager or seek approval from the Ministry of Manpower (MOM) in order to set up the business.

3. Many Pro-growth Policies in Singapore
The Singapore government is very supportive of new companies. They provide many grants, incentives and assistance schemes to start-ups. These benefits are applicable for all companies, regardless of company structure.

Click to read more information on:
– Loans for new Businesses or newly incorporated Companies in Singapore
– Grants for new Businesses or newly incorporated Companies in Singapore
– Loans for Small and Medium Enterprises (SMEs) in Singapore
– Grants for Small and Medium Enterprises (SMEs) in Singapore

4. Good location and Infrastructure
Singapore is located in a good position. It serves as a central point, with convenient access to South East Asia and the rest of the region. Regardless of your mode of transport, Singapore’s infrastructure is well-equipped to get you to your destination. Singapore houses the best airport facility in the world with flights landing and departing every 80 seconds. Singapore also has well-built seaports, roads, transport system and amenities to make sure you stay well-connected in or around Singapore.

5. Low Corruption and English speaking Workforce
The primary language in Singapore is English, making it very convenient and easy to communicate with Singaporeans. In the multi-cultural society of Singapore, you can also find other languages such as Mandarin, Malay or Tamil. We also have a wide variety of Eurasians, foreign nationals as well as dialect speakers, giving you a vast choice of language to speak with.

In Singapore, there is also a low corruption rate that contributes to a safe business environment for all companies incorporated or working in Singapore. In 2019, Singapore ranked the 3rd out of 180 countries in the Corruption Perceptions Index, proving Singapore to be relatively corruption-free and safe for business activities.

6. Ease of Incorporation
In Singapore, incorporation for both foreigners and locals are equally and fairly straight forward. There are very few barriers to entry, as well as many experienced corporate secretarial firms that can assist you with your incorporation, helping you to get your business on track smoothly.

Click to read more information on:
Corporate secretarial firms and their duties 

Ready to Incorporate? Click here to read: 
Part 2a: Incorporating a Private Limited Company in Singapore
Part 2b: Registering your Sole Proprietorship Business

Schedule a consultation with us or Send us your enquiries now!

Tel: +65 6336 9911
Whatsapp: +65 9869 5512

Lionsworld Incorporation Pte. Ltd.
111 North Bridge Road #21-01 Singapore 179098

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