Foreign entrepreneurs are attracted by the investment possibilities they have and also by the flexibility of choosing the type of company they want to open in Singapore. Under the Singapore Company Act foreign investors can register one of the following types of business entities:
Foreign investors wanting to start a business at a smaller scale can do so by opening a sole proprietorship in Singapore. Based on your priorities, our specialists in company formation in Singapore can help you make the right choice regarding the type of company to register.
Types of companies available for registration – described by our experts in company formation in Singapore
The following types of companies are available for registration in Singapore according to the Company Act:
- limited liability companies,
- companies limited by guarantee.
Singapore limited liability companies can be private or public, the main difference between the two types of business entities referring to the fact that public companies can float their shares in the Stock Exchange, while private companies are not allowed. Another difference resides in the number of shareholders the two types of Singapore companies can have: private company cannot have more than 50 shareholders, while the public company can. Singapore companies limited by guarantee are usually established for non-profit purposes. Whether you are interested in setting up a private limited company in Singapore or a public one, our team of consultants is at your disposal. A private limited company is the most adaptable, technologically advanced, and scalable business structure in Singapore. Compared to a limited liability partnership or a sole proprietorship, it is the most prevalent form of business. For guidance in setting up a company in Singapore through this structure, contact our local specialists.
In order to register any of the types of companies above the founders must appoint at least one director in the case of limited liability companies and two in the case of companies limited by guarantee and a Singapore resident company secretary. In order to open a company you will also need a bank account in Singapore where you will have to deposit the share capital and our incorporation agents are ready to assist you in this matter.
You can also read about the main types of companies in Singapore in the scheme below:
The sole proprietorship in Singapore
Setting up a company in Singapore can also imply using a non-corporate structure such as a sole proprietorship. Even if this is the simplest legal entity in the city-state it still implies meeting specific requirements when created.
What must be considered when opening a Singapore sole trader is that it is not legally considered a separate incorporated entity, meaning the owner and the business are the same. All the company’s assets and liabilities fall upon the owner individually. This is one of the major disadvantages of this business form, while in terms of advantages, we can mention the following:
- it is simple to create;
- it is suitable for professionals such as dentists and accountants;
- it benefits from a low taxation system.
If you are interested in this type of business, you can rely on our Singapore company formation agents if you want to register it.
Types of partnerships in Singapore
Foreign investors can set up three types of partnerships in Singapore:
- – a general partnership,
- – a limited partnership,
- – a limited liability partnership.
All types of Singapore partnerships are business entities allowing at least two persons to co-own a business. The partnership has no distinct legal existence from its founders, which is why the partners will be held liable for the company’s debts and obligations with their personal assets. The limited liability partnership was recently recognized by the Company Act and is a combination between a partnership and a limited liability company. Limited liability partnerships are designed for professionals, such as lawyers or accountants. If you need assistance in order to open a company in Singapore, our team can help you. If you need assistance in order to open a company in Estonia, our team can put you in contact with our partners from Tallinn.
Structures for foreign companies in Singapore
Even if the holding company is not itself a type of business entity, it is one of the best structures to open a Singapore company. It can be registered under the form of private or a public company and it offers significant tax advantages to its owners which are usually foreign companies. The registration process for a holding company is the same as for any other type of company in Singapore and our local consultants can assist you with the preparation of its statutory documents and with their filing with the Accounting and Corporate Regulatory Authority.
Another type of structure foreign enterprises use is the Singapore subsidiary. This type of business form can also take various forms, however, the most employed one is the limited liability company. A foreign company needs a minimum share capital of 1 SGD to open a subsidiary in the form of a limited liability company in the city-state.
The last type of company a foreign entity can use in Singapore is the branch office. Compared to the subsidiary which falls under the Commercial Law, the branch office is subject to the Branch Companies Act and its activities will be strictly related to the parent company’s undertakings.
No matter the type of company you want to set up, our Singapore company formation specialists can offer comprehensive information about each one of them in order for you to make the right choice.
All types of companies are eligible for EORI registration in Singapore.
How to choose between the different types of Singapore companies
Setting up a company in Singapore is easy, no matter the chosen business structure, however, this may prove to be a trap when it comes to selecting the most appropriate vehicle. Here are some pointers you can follow from this point of view:
- It can be easier for you to register your firm as a sole proprietorship if you are a Singapore citizen who wants to start a small business where you will be the only owner and your products/services don’t include any potential liability. You must, however, take into account the possibility that the claimants may pursue your personal assets in the event of any corporate liabilities.
- Setting up a partnership, especially a limited liability one, can be a good option for you if your company entails selling your services through the profession you hold (such as that of an accountant, architect, etc.) and you have one or more other partners who want to establish a joint practice.
- The best option in all other matters is to incorporate a private limited company in Singapore. Despite having more complicated compliance requirements, it is by far the best structure to operate in the city-state, especially if you are a foreign investor.
You can also rely on the advice of our local consultants if you have any questions about choosing the right type of company in Singapore.
Registration requirements that apply to all Singapore companies
Apart from the purpose under which you decide to set up a company in Singapore, there are also certain aspects that need to be considered for all legal forms. These:
- having a local business address, which is a mandatory requirement imposed by the Companies Law;
- having at least one shareholder in the case of corporate forms, such as limited liability companies;
- securing a unique business name;
- having a work or residence permit in the case of foreign employees/business owners/company directors.
Taxation is another aspect you can look into when deciding to open a company in Singapore. From this point of view, it is not the tax rate you would be interested in, but the exemptions that are available for most types of companies.
Choosing a suitable legal entity is a matter our local experts can help with, so do not hesitate to get in touch with us for support.
We also invite you to watch the video below to find out what are the types of companies you can register in Singapore:
Companies in Singapore in numbers in 2023
According to the most recent data, the largest number of companies in Singapore operated in the financial sector in 2023.
By type of business form, ACRA offers the following information:
- at the level of August 2023, there were 423,752 local and foreign companies;
- the same month, there were also 143,370 operational sole proprietorships and partnerships;
- in August, the total number of active companies was 586,137.
If you want to open a company in Singapore, you can contact our local specialists in company incorporation for assistance. In case you need assistance in company liquidation in Singapore, our team can also help you.
In case you are interested in starting a business in another Asian country, for example in Taiwan, we can put you in contact with our partners – companyformationtaiwan.com.