There are different types of business structures in Singapore and it is important for you to learn the various types of business entities that are available to determine the one that will match your business needs the most.
No matter what type of entities you are planning to set up, be it a limited company, proprietorship/partnership, limited liabilities partnership or limited partnership, our dedicated team of experts is able to help you navigate through the complex statutory requirements to successfully set up your desired entity in Singapore.
Incorporation of a private limited company
All companies are registered with the Accounting and Corporate Regulatory Authority (ACRA) and companies are governed by the Companies Act, Chapter 50 and constitution.
There 3 types of limited companies with private limited company being the most common and preferred type of entity among business owners in Singapore. Its shares are held privately and the number of shareholders must not be more than 50. Such companies are required to have the suffix “Private Limited” or “Pte. Ltd.” as part of its company name.
Minimum incorporation requirements
- 1 director who is ordinarily resident in Singapore and must be at least 18 years of age and above
- 1 shareholder
- 1 company secretary is an ordinarily resident in Singapore
- 1 local registered address
- 1 issued share
- To determine the financial year at incorporation stage
The incorporation procedures involve submission of name application by providing the information of company’s main business activity and particulars of directors and shareholders. The result of the application is instant unless the name needs to be referred to other government agency for approval which will then take between 14 days to 2 months. Once approved, the name will be reserved for 120 days, during which the incorporation process must be completed.
Private companies can be categorised into exempt private company (EPC) and non-exempt private company (non-EPC). EPC refers to a company that has not more than 20 shareholders and none of the shareholders is a corporation. Non-EPC has less than 50 shareholders and its shareholders consist of corporation.
- Annual general meeting (AGM) must be held within 6 months from the financial year end (FYE)
- Annual Return (AR) must be filed within 7 months after the FYE once the AGM has been held
- Company’s financial statements must be audited unless it is exempted from the audit requirements
- The audited/unaudited financial statements must be filed together with the AR in XBRL format (where applicable)
- Any changes in the officer or particulars of the officers must be filed with ACRA within 14 days from the date of the change
- ACRA must be notified if there is any change in FYE and approval from ACRA is required if the change in FYE will result in a financial year of more than 18 months and if the FYE was changed within the last 5 years (from the last changed FYE)
- Maintenance of register of controller and register of nominee director within 30 days after incorporation
Public Company Limited by Shares and Public Company Limited by Guarantee
The other type of limited companies are public company limited by shares (PLC) and public company limited by guarantee (CLG).
A PLC is similar to private limited companies except that its shares may be publicly traded and the number of shareholders can be more than 50. A CLG does not have share capital and it is primarily used for non-profit making activities, such as charitable bodies, trade associations, religious bodies, etc. CLGs are rarely used for trading companies or commercial undertakings. The incorporation procedures for PLCs and CLGs are similar to the incorporation of private limited companies.
A sole proprietorship is owned by one person or one company. The sole proprietor has full say in the running of the business. This business structure is the easiest and least costly to set up and maintain, though it has unlimited liabilities. A partnership is a business firm formed by at least 2 partners but not more than 20.
Registration is easy and as with limited companies, it starts with name application. The approval process takes one working day unless the application needs to be referred to another government agency for approval or review. In such case, it may take between 14 days to 2 months. Once approved, the business owner(s) may proceed to register the sole proprietorship/partnership by entering the details of the owner(s) and principal place of business.
- At least 1 individual proprietor who is ordinarily resident in Singapore and must be at least 18 years of age. Sole proprietorship can also be owned by a company
- An authorised representative is required to be appointed if the individual proprietor or all the partners of a firm do not reside in Singapore. The authorised representative must be an ordinarily resident in Singapore
- A local principal place of business
- Updating ACRA on any changes in the sole proprietorship/partnership or particulars of the proprietor/partners within 14 days from the date of change
- The registration of sole proprietorship/partnership is valid for 1 year or 3 years and it can be renewed 60 days before the expiry date
A limited partnership (LP) consists of at least 2 partners, with 1 or more general partners and 1 or more limited partners. General partners are fully responsible for the business of the LP and they are personally liable for the debts and liabilities of the LP. Limited partners are not liable for debts and obligations beyond his agreed contribution amount and they do not the power to bind the LP.
Registration of LP is similar to the registration process of partnership. Once the proposed name is approved, the LP can be registered by providing the particulars of the partners, a local principal place of business and declaration of compliance by the partners.
- At least 1 general partner and 1 limited partner. No maximum limit. Partners can be individuals or body corporate (company or other LLP)
- At least 1 manager who is ordinarily resident in Singapore if all the general partners are not “ordinarily resident” in Singapore
- An authorised representative is required to be appointed if the individual proprietor or all the partners of a firm do not reside in Singapore. The authorised representative must be an ordinarily resident in Singapore.
- A local principal place of business.
- Updating ACRA on any changes in the particulars of LP/partners/particulars of the partners within 14 days from the date of change
Limited liability partnership
A limited liability partnership (LLP) is a type of business structure that provides the flexibility of operating as a partnership while having a separate legal identity like a limited company.
- At least 2 partners who must be at least 18 years of age. No maximum limit. Partners can be individuals or companies
- At least 1 manager who is ordinarily resident in Singapore and must be at least 18 years of age and not disqualified under the Companies Act, Chapter 50.
- A local registered address
- Updating ACRA on any changes in the LLP/partners/particulars of the partners within 14 days from the date of change
- An LLP is required to keep accounting records that will sufficiently explain the transactions and financial position of the LLP
- An annual declaration of solvency/insolvency is required to be submitted by the manager to ACRA
Foreign Branch Office and Representative Office
Other than the above-mentioned business structures, foreign companies have the option to register a foreign branch office or representative office depending on their needs and requirements.
Foreign Branch Office
A branch office is an extension of the parent company and it has no separate legal identity. Any action against a branch office is equal to an action against the parent company.
- The name of the branch office must be the same as that of the parent company
- At least 1 authorised representative who is ordinarily resident in Singapore and must be at least 18 years of age
- A local registered address
The registration procedures involve submission of name application to reserve the name. The result is instant unless the name needs to be referred to other government agency for approval which will then take between 14 days to 2 months. Once approved, the name will be reserved for 120 days, during which the registration process must be completed.
- The foreign company is required to lodge the financial statements of the Head Office during its annual filing, as well as the audited financial statements of its Singapore branch office within 2 months after its AGM or within 7 months from the end of its financial year.
- Any changes in the foreign branch or officers or particulars of the officers must be filed with ACRA within 14 days from the date of the change.
Registration of representative office (RO) is a temporary establishment that allows a foreign company to evaluate the feasibility of doing business in Singapore before deciding to set up a permanent establishment and it is not allowed to carry on any activity with the purpose of generating profits. RO is governed by Enterprise Singapore.
- Sales turnover of the foreign company must be more than USD250,000
- Number of years of establishment of the foreign company must be 3 years or more
- Proposed number of staff for the RO should be less than 5 people
- The registration of RO, once approved, will be valid for 1 year from the date of approval. Renewal is possible on a yearly basis but it will not be more than 3 years.
Other than the above options, we also assist in setting up offshore companies in countries, such as British Virgin Islands, Cayman Island, Seychelles, etc. You may contact us for information if you are interested.