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Introduction to the Types of Companies that can be Locally Incorporated in Singapore

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in-SingaporeSingapore has a pro-business atmosphere for new entrepreneurs. Its political environment and bureaucracy are all geared to encourage the incorporation of new businesses in Singapore. In the same spirit, the corporate tax rates are also maintained at a competitive level.


Singapore Business Structures for Individuals

Generally, an individual owner can register a Singapore business in three ways. The business structures they can use are:

  • Private Limited Company
  • Limited Liability Partnership
  • Sole Proprietorship

These business structures come with different working parameters and Singapore company setup. They differ in their legal structures and implications, as well as in their ability to hire people.

Your choice of a business structure can have an adverse impact on the operational aspects of your company. The taxation regime, the statutory compliance, and even the paperwork, all differ with the type of business you choose to incorporate.

It is one of the reasons why many choose to hire an experienced Singapore registered filing agent for the task.

In the meantime, given below is brief information about the three types of companies that can be incorporated in Singapore by an individual (Singaporeans and Foreigners). Initially, this information can serve as a worthwhile reference for you to get the ball rolling.


Singapore Private Limited Company

Most of the time, when someone says they are opting for a company formation in Singapore, they are referring to this type of business. It is a type of Limited Liability Company.

Most entrepreneurs choose to incorporate a private limited company in Singapore. It is dynamic and scales well as the company grows and expands.

A private limited company has 1- 50 shareholders. The shareholders can be individuals as well as corporate entities or both. In addition, a private limited company, also referred to as Pte Ltd in Singapore, stands as a separate legal entity. It has a distinct identity from its owners.

One more added advantage of a Pte Ltd is that its shareholders carry limited liability towards the losses and debts incurred by it. It has a credible image in the eyes of private investors, banks and financial institutes. It makes raising funds for its expansion an easy task.

A private limited company has perpetual existence. The shareholders may change; the company continues until it is struck off. It lasts longer and has a greater chance of building a brand name than individuals. A Pte Ltd has the chance of coming across as a trusted brand in the eyes of their customers.


Limited Liability Partnership (LLP)

An LLP can be set up in Singapore by 2 to 20 individuals. It gives its owners or members the advantages of a partnership firm and a private limited company.

An LLP is the most viable option for people having complementary skills and who wants to start a business together in order to reach out to more people. These members provide services by way of their profession and get paid for the same.


Sole Proprietorship

This is the simplest type of company incorporation in Singapore. However, a sole proprietorship does not have the standing of a legally independent entity. It depends on its proprietor for the identity, which is one of its drawbacks.

The owner shoulders unlimited liability. They are responsible for the losses or debts incurred by their sole proprietorship. If the owner fails to pay the debts, Singapore law permits the court to have his personal assets dissolved for the compensation of the debts.

The registered filing agents in Singapore advise aspiring business owners to use a sole proprietorship for the activities that are inherently risk-free. Still, every entrepreneur should make an effort to become fully aware of all the rules and regulations before taking a plunge to incorporate a sole proprietorship.


Singapore Subsidiary Company

This business structure is for the benefit of foreign companies that want to start a company in Singapore. A subsidiary company is a form of limited liability company. It is structured like a Singapore private limited company.

As per the Singapore Company Law, the parent, a foreign company, can own 100% of shares in its Subsidiary company. The subsidiary company has a separate identity from its parent company. It means that the parent company’s liability is limited to the share capital it has invested in its subsidiary.

The subsidiary’s debts and losses are it’s own and the parent’s assets are not used to pay them. The parent company has to relocate one of its employees to take charge of its subsidiary. The appointee needs to acquire an Employment Pass to relocate and work in Singapore.


Branch Office

Many foreign Small and Medium Enterprises choose to register their branch office in Singapore. The Singaporean Company Law treats a branch office as the extension of its parent company.

A Singaporean branch office exists as a legal entity. However, its parent company is liable for all its debts and losses incurred during its business activities. A branch office needs to hire at least one employee that is ordinarily resident of Singapore.


Representative Office (RO)

Many foreign companies, especially the multinationals, set up a representative office in Singapore before entering the local market. It allows them to research the business potential of the local market. An RO is tasked with conducting feasibility studies.

The foreign parent companies that are established for more than 3 years and have an annual turnover of more than S$250,000 gets to register a representative office. In case the parent company gets dissolved, its Singapore RO also gets de-registered.

A representative office depends on its parent company for legal identity. And, the parent is liable for its losses. It should not appoint more than 5 employees. It cannot take up any profit-making activities.

In Singapore, many accounting services also provide company incorporation services. Appointing them saves time and efforts as they assign an incorporation expert for your task. These professionals advise you on every step of the Singapore company incorporation process and assist you in completing it successfully.

If you have any queries, get in touch with SingaporeAccounts. Call us on +65 6536 0036 or you can drop an email at for answers.