By using our website you consent to all cookies in accordance with our Privacy Policy.

Singapore is a reputed business hub in Asia. Highly open economy, transparent regulatory framework, low tax rate, and enterprise-friendly environment are key driving forces behind the growing attractiveness of Lion City.

While millions of investors and entrepreneurs have stepped into Singapore for starting business, an arising question for ‘new-comers’ is which type of company should they incorporate in Singapore?

singapore types of companies cover 

In this blog, BBCIncorp walks you through main types of business entities in Singapore that foreigners need to know.

1. What are common types of companies  in Singapore?

Three most common types of companies in Singapore include: a limited liability company, a partnership, and a sole proprietorship.

1.1. Limited Liability Company

A limited liability company (LLC) is the widely-chosen type of business entity for those wishing to incorporate a company in Singapore.

A Singapore limited liability company can be formed under the following types:

  • Private company: Private limited company by shares, and Exempt private company
  • Public company: Public company limited by shares, and limited by guarantee

business people pointing and discussing about graphs

Pros of a Singapore LLC

  • Limited liability: Shareholders of a Singapore LLC, aka the company owners, only take responsibility for the liabilities equivalent to their value of shares contributed to the company. 
  • Separate legal status: this type of company is a legal entity separated from its business owners. An LLC in Singapore can also sign contracts, acquire and own assets, sue or be sued under its own name. 
  • Tax advantage. LLCs, like other types of business in Singapore, are subject to an income tax rate of 17%. However, Singaporean government does grant eligible companies a range of tax exemption models and tax reliefs which can assist to reduce their tax burden easily. 

Cons of a Singapore LLC

Maintaining an LLC requires many things to handle. Still, a private limited company is imposed fewer reporting duties than that of a public company. Certain compliance requirements in connection with a Singapore LLC comprise:

  • Filing tax returns with IRAS
  • Filing annual returns with ACRA
  • Holding AGMs (Annual General Meeting)
  • Submitting accounting reports
  • Other duties as required by relevant competent authorities

1.2. Partnership

two business men shaking hand

A partnership must be established by at least 2 partners. Noticeably, the partnership is not separate from its partners. This means that one partner will be jointly liable with other partners, and personally liable for all company’s obligations (except limited partners from a limited partnership).

Three main types of partnerships in Singapore involve:

  • General partnership (GP)
  • Limited partnership (LP)
  • Limited liability partnership (LLP)

Main features of Singapore partnerships (Key differences between GP, LP and LLP)

  • Legal status: LLP is a separate legal entity. By contrast, GP and LP are not deemed a separate one. 
  • Partner’s liability: Partners in a Singapore LLP has their liabilities limited only to their  investment in the partnership. On the contrary, general partners of LP, and partners of GP would hold unlimited liabilities to any obligation connected with other partners. 
  • No. of partners: A Singapore general partnership must have at least 2 partners, but cannot exceed 20. There is no maximum number of partners in LPs and LLPs. 
  • Imposed tax rates: LLP’s partners are taxed on their personal income tax or corporate income tax, depending on whether they are individuals or body corporates. Note that a partnership in Singapore is likely to have less chances to gain tax reliefs available to Singapore LLCs.
  • Compliance requirements: Maintaining a company as a Singapore LLP is less burden than that as a limited liability company in Singapore.

1.3. Sole Proprietorship

The simplest but most challenging type of business entity in Singapore is considered to be a sole proprietorship. This is a ‘one-man show’, meaning the business is only controlled by one owner who can be either an individual or a company. Since there is no other partner in the sole proprietorship, it would be the owner who is wholly responsible for the business’s profits and liabilities.

business man with icon of led

Main features of a Singapore sole proprietorship

  • Legal status: A sole proprietorship in Singapore is not a separate legal entity from its owner. 
  • Unlimited liability: The owners of a sole proprietorship shall be personally in charge of all arising debts, liabilities and losses of the business.
  • Taxation: How much the sole proprietorship is taxed in Singapore completely depends on the personal income of the owner. 
  • Compliance requirements: A Singapore sole proprietorship is the type of business with the slightest burden from maintenance requirements. Two biggest duties that the business needs to take care involves renewal and submission of tax returns with IRAS.

2. What are company registration options for foreign companies in Singapore?

For foreign companies wishing to expand their business presence in Singapore, there are three registration options available:

man pointing fingers on screen

2.1. Subsidiary

A subsidiary company typically acts as a shareholder of a parent holding company. In Singapore, a subsidiary is commonly established under the form of a private limited company; therefore, this type of company may also enjoy similar benefits and liabilities like a private limited company in Singapore.

2.2. Representative office

A representative office is highly recommended for foreign companies planning to explore the Singapore market before penetrating. Common purposes of setting up a representative office in the Lion City are to conduct market research, promote brand awareness, or test market.

Unlike a subsidiary, a representative has no legal distinction. The overseas parent company is the one responsible for all debts and liabilities incurred by the office. In addition, it is not allowed to carry out any profit-generating activities in the country.

2.3. Branch office

A branch office is regarded as an extension of a parent company incorporated outside Singapore. A branch office in Singapore is allowed to conduct commercial activities. Still, this business structure is not deemed a separate legal entity, so all relevant liabilities of the branch are still taken by its parent company.

When it comes to the taxation perspective, a branch office is a non-resident for tax purposes. For this regard, there would be no tax reliefs granted to the branch of most foreign companies  like the newly incorporated startups or local resident companies. If putting this perspective in a comparison, a subsidiary which is set up as a private limited company in Singapore will be more preferred. 

3. Which type of company in Singapore is right for you?

It is well advised to select a type of company which can work best for your business demand.

It is also crucial to consider a set of factors before making your decision, as each structure may come with different features, benefits and drawbacks that you are longing for. Number of business owners, investment capital, tax advantage and obligations corresponding to each type of business entity are typical things in question.

Still uncertain about which type of company in Singapore is right for your business? Seeking practical advice from a trusted service provider like BBCIncorp will be a wise choice for you.

Private limited company in Singapore is highly recommended for most foreign entrepreneurs to start business in Singapore. Want to know the price, and steps involved? Let's find out about Singapore company incorporation service!

Recent Posts

most-common-types-of-business-entities-in-delaware
1 Mar 2021

Most Common Types of Business Entities in Delaware

Among all types of business entities in Delaware, LLC and corporation are most preferred. They are safe to incorporate and flexible in terms of taxation.

Read more
5-key-benefits-of-starting-a-business-in-delaware
25 Feb 2021

5 Key Benefits Of Starting A Business In Delaware

Delaware is an ideal destination for investors to embark on businesses. This article clarifies 5 benefits of starting a business in Delaware that you must know!

Read more
how-to-start-e-commerce-business-in-hong-kong
28 Apr 2021

How to kick-start your e-commerce business in Hong Kong

How to start an e-commerce business in Hong Kong? This blog gives you insights into what to consider and key steps for setting up a Hong Kong e-commerce company.

Read more
how-to-set-up-a-company-in-singapore-for-foreigners
31 Mar 2021

How to set up a company in Singapore: foreigners guide

Wanting to know how to set up a company in Singapore? This is an exclusive guidebook of incorporation for foreigners (and hints at post-formation steps).

Read more
singapore-and-hong-kong-for-doing-business
3 Feb 2021

Singapore and Hong Kong for Doing Business

Wondering where to incorporate? Hong Kong and Singapore are in the top three ideal destinations to do business in the world. Tons of benefits for corporations.

Read more
an-overview-of-annual-filing-requirements-in-singapore
31 Mar 2021

An Overview of Annual Filing Requirements in Singapore

There are several annual filing requirements that every business owner in Singapore needs to take heed of. It goes without saying that these liabilities vary greatly in their natures, purposes, and deadline for submission.

Read more
why-you-should-incorporate-in-singapore-today
31 Mar 2021

Why You Should Incorporate in Singapore Today

In what follows, we will shed light on why incorporating in Singapore has become a prevailing trend, its benefits, and why you should do it too.

Read more
doing-business-in-cyprus
7 May 2021

Doing Business In Cyprus: All-in-One Guide For Entrepreneurs

Cyprus has long established itself as a thriving business hub. Doing business in Cyprus offers countless opportunities and advantages for entrepreneurs.

Read more
business-license-in-delaware
4 May 2021

Business License In Delaware: What Is It & How To Get

Obtaining an appropriate business license in Delaware is a key step when you wish to start your own business in this outstanding state of the US. Learn more!

Read more
personal-income-tax-in-delaware
28 Apr 2021

Non-resident Personal Income Tax in Delaware: 2021 Guide

Delaware personal income tax is a crucial part of doing business as a non-resident. Let BBCIncorp guide you through the process of filing your tax return.

Read more
start-a-business-in-the-uk
4 May 2021

Start a Business in the UK: A Step-by-step Guide (2021 Update)

To start a business in the UK, you will need to pick the type of business entity, form the company and apply for a bank account. Learn all the steps now!

Read more
bbcincorp-x-neat
27 Apr 2021

BBCIncorp x Neat: Incorporation and Account Setup with Ease

Forming a business in Hong Kong on your own is never an easy task. But with a trusted service provider namely BBCIncorp and an efficient financial solution like Neat, your business is in good hands.

Read more