Before setting up a new business in Singapore, an important decision is to decide what legal structure your business will take.  You can choose to operate your business as a private limited company, sole proprietorship, partnership, limited liability partnership, branch office or representative office.  The most common and widely used business form in Singapore is a private limited company.

Singapore Incorporated Company

A Singapore incorporated company can be either a private limited company and a public company. A company may be registered as a private company if it does not have more than 50 shareholders. Otherwise, the company must be registered as a public company. A private limited company is the most common and widely used business entity in Singapore.

Below are the various business structures available:

Business Structure

Ownership

Legal status

Sole proprietorship

Single owner

Owner is personally accountable for all risks, debts and losses

Partnership

2 to 20 individuals or companies

Partner is personally accountable for all risks, debts and losses

Partner can also be made accountable for losses incurred by other partners

Limited liability partnership

Minimum of 2 partners

Partners have limited liability but are personally liable for debts and losses resulting from their own wrongful actions.

Limited partnership

At least 1 general partner and 1 limited partner

General partner: unlimited personal liability

Limited partner: liable up to agreed investment

Company

Private – maximum 50 owners

Public – unlimited owners

Separate legal entity

 

Foreign Company

A foreign company that wishes to register an office in Singapore may do so under any of the options listed below:

 

SINGAPORE BRANCH

SUBSIDIARY COMPANY

REPRESENTATIVE OFFICE

Legal Type

Not a separate legal entity but an extension of the parent company

 Separate legal entity  distinct from its parent company

 Has no legal status but just a temporary administrative arrangement

Liabilities

 Liabilities extend to parent company

 Liabilities limited to subsidiary

 Liabilities extend to parent company

Entity name

 Must be same as parent company

 Need not be same as parent company

 Must be same as parent company
plus must include 'Representative Office'

Allowed business activities

 Must be same as parent company

 All business activities

 Only market research or coordinating activities

Validity Period

 Registered forever until closed  Registered forever until closed  Has to be renewed yearly to a maximum of 3 years

Ownership

 Wholly owned by head office  Can be 100% foreign or locally owned  No Ownership
Tax Treatment  Taxed as non-resident entity, local tax benefits not available  Taxed as Singapore resident entity, local tax benefits available  N/A as Rep Office cannot generate income
Annual Filing  Must file branch office as well as parent company’s accounts  Must file accounts of the Singapore subsidiary  N/A
Bank Account Can open bank account in Singapore Can open bank account in Singapore Can open bank account in Singapore to run the cost centre operations. Must be funded by the parent company.
Appointment of officers Must appoint at least one authorised representative who is ordinarily resident in Singapore Must appoint at least one local resident director Must appoint a chief representative who will relocate from head office
Cessation of Business upon Death of a Member/Partner No No. Equity shares go on in perpetuity Not Applicable
Governing Body ACRA & IRAS ACRA & IRAS Enterprise Singapore

Note: For representative office, it has to be renewed annually with maximum of 3 years