Entity types in Singapore.

Planning to open a company in Singapore? Before the incorporation, you need to choose the correct entity type in Singapore for your business.

DIA / Digital Advice will incorporate your company fast and easily. Compare all entity types in Singapore and let us know which one you like.

All entity types in Singapore have their pros and cons. You need to answer all the questions below to understand where are you heading. If you prefer to grow your business and have great plans for your company, choose a Private Limited Company set up. It is the most popular option for investors and entrepreneurs.

• What is the nature of your business?
• What is your plan for expanding?
• How members will be involved?

Private Limited Company

Overview: The best option from all entity types in Singapore. Good for trading, services, and other kinds of business. There are a few types of Private Limited Companies: Exempt Private Company (20 or fewer members, no corporation holds the beneficial interest in the company’s shares); Private Company (50 or fewer members); Public Company (more than 50 members)

Complications: Higher cost of incorporation, comparing Partnership. You must appoint a local director, local secretary, and auditor. Bookkeeping takes time, many records, and fillings. The annual return must be filed every year for ACRA.

Who can set it up: Any foreign or Singapore citizens.

Set up for Foreigners: Possible. But he must appoint a local director and secretary. If you wish to manage your company as a director, you need to apply for the Employment Pass.

Good for: Any kind of business.

Liability: Limited liability for members.

Ownership for properties: It is possible to own properties under the company name.

Taxes: Corporate tax rate.

Possibilities for tax exemption: Yes! You can apply for startup tax exemption, partial tax exemption, or tax exemption for dividends. For newly incorporated companies you can apply for 70% tax exemption for the first 3 years on USD 100 000 income, and a further 50% for another USD 100 000.

How to close it: Winding up is voluntarily by members, compulsorily by the High Court.

Sole Proprietorship / Solo trader

Overview: Business owned by one person. Good for small businesses. Only you will run the business. By the law, there is no distinction between the individual and the business. Set up is fast and easy. Low registration cost. Annual renewal

Who can set it up: Singapore Citizen, Singapore Permanent Resident, Foreigner with an Employment Pass, Dependant Pass Holder.

Set up for Foreigners: Foreigners can set up Sole Proprietorship, but he must appoint a local manager and secretary. Must be a resident of Singapore. Impossible to open a Solo Proprietorship remotely if you live abroad.

Good for: low-risk small business

Risks: The owner has full liability. No protection of personal assets from business risks and liabilities. If you have credit and cannot pay it back, creditors have the right to get all your personal assets.

Liability: Unlimited liability.

Ownership for properties: Possible to own under the Sole Proprietorship.

Taxes: Personal income tax rate for the owner.

Possibilities for tax exemption: No benefits from the effective corporate tax rate. No tax incentives from IRAS (Inland Revenue Authority of Singapore)

How to close it: If you will not extend registration, the company will be closed. Possible to make termination or cessation.

Ordinary Business Partnership

Overview: Business owned by 2 or more partners. Maximum 20 individual partners. Good for small businesses. Set up is fast and easy. Low registration cost. Annual renewal

Who can set it up: Singapore Citizens, Singapore Permanent Residents, Foreigners with an Employment Pass, Dependent Pass Holders.

Set up for Foreigners: Possible with Singapore Residents. But he must appoint a local manager and secretary.

Good for: small business based on services.

Risks: Depends on partners. If the partner will be retired or something happened to him, the business will come to an end. No protection of personal assets from business risks and liabilities. If you have credit and cannot pay it back, creditors have the right to get all your personal assets.

Liability: Unlimited liability

Ownership for properties: Impossible to own properties under a Partnership name.

Taxes: Partners’ personal income tax rate.

Possibilities for tax exemption: No benefits from the effective corporate tax rate. No tax incentives from IRAS (Inland Revenue Authority of Singapore)

How to close it: If you will not extend registration, the company will be closed. Possible to make termination or cessation.

Limited Partnership (LP)

Overview: Business owned by 2 or more partners. At least 1 partner must be a General Partner (GP). No limits on the number of partners. Good for small business. Set up is fast and easy. Low registration cost. Annual renewal

Who can set it up: Foreigners, Singapore Citizens, Singapore Permanent Residents, Foreigners with an Employment Pass, Dependent Pass Holders.

Set up for Foreigners: Possible with Singapore Residents. But he must appoint a local manager and secretary.

Good for: small business. But the General Partner have to be ready for unlimited risks.

Risks: General Partner have unlimited risks. No protection of personal assets from business risks and liabilities. If you have credit and cannot pay it back, creditors have rights to get all your personal assets.

Liability: Unlimited liability only for General Partner. The same time all other partners will have only limited liabilities.

Ownership for properties: Impossible to own properties under Partnership name.

Taxes: Partners’ personal income tax rate. Corporate tax rate if one of the partners is a company.

Possibilities for tax exemption: Corporate tax relief if the General Partner is eligible.

How to close it: If you will not extend registration, the company will be closed. Possible to make cessation only by the decision of the General Partner.

Limited Liability Partnership (LLP)

Overview: Business owned by 2 or more partners. No limits on the number of partners. Liabilities are generally limited. Responsibilities, management, and profit are divided. Set up is fast and easy. Low registration cost. Annual renewal. Easier to administer comparing company set up. Annual filing of the declaration of solvency.

Who can set it up: Foreigners, Singapore Citizens, Singapore Permanent Residents, Foreigners with an Employment Pass, Dependent Pass Holders.

Set up for Foreigners: Possible with Singapore Residents. But he must appoint a local manager and secretary.

Good for: Small business. Good for the joint practice of two or more professionals. Mostly for services.

Risks: Partners are liable for their own losses and debts.

Liability: Partners are liable for their debts and losses. If one partner cause losses, other partners are not liable.

Ownership for properties: Possible under the LLP name.

Taxes: Partners’ personal income tax rate.

Possibilities for tax exemption: No benefits from the effective corporate tax rate. No tax incentives from IRAS (Inland Revenue Authority of Singapore)

How to close it: Winding up is voluntarily by members, compulsorily by the High Court.