How To Register a Company in Singapore – 2024 Complete Guide

Selecting the appropriate business structure in Singapore is essential, as it directly affects factors such as liability, taxation, and regulatory requirements. The structure chosen influences how the business is managed, its legal identity, and the level of personal liability for its owners. Choosing the most suitable structure not only ensures compliance but also reduces risks and enhances operational effectiveness, which can significantly impact the business’s long-term success.

Private Limited Companies (Pte Ltd)

A Private Limited Company, or “Pte Ltd,” in Singapore is an independent legal entity with limited liability protection for its shareholders. This structure allows for up to 50 shareholders, who may include individuals, other companies, or a combination of both.

Pte Ltd companies enjoy advantages such as corporate tax exemptions and access to various government programs aimed at supporting business expansion. Compared to other business forms like a Limited Liability Partnership (LLP) or Sole Proprietorship (SP), a Private Limited Company offers greater scalability, sophistication, and flexibility, making it the most common and preferred choice for businesses in Singapore.

Sole proprietorships (SP)

A sole proprietorship is a simple business structure but carries higher risk for the owner, who is personally liable for all business obligations.

Legally, a sole proprietorship is not considered a separate entity from its owner, meaning the individual or legal entity that owns the business is directly tied to its assets and liabilities.

Besides Singapore citizens and permanent residents, only certain foreign individuals—those holding a Dependant’s Pass, Overseas Networks & Expertise (ONE) Pass, or a Letter of Consent—are eligible to register a sole proprietorship in Singapore.

Limited liability partnerships (LLP)

A Limited Liability Partnership (LLP) in Singapore requires at least two partners, who may be individuals or corporate bodies, and functions as a distinct legal entity, separate from its partners.

LLPs are commonly formed by professionals, such as lawyers or architects, who want to establish a joint practice in their field. For tax purposes, profits are taxed at individual income tax rates for individual partners and corporate tax rates for corporate partners.

While LLPs offer liability protection, they are ineligible for government loans, must maintain a minimum of two partners to avoid dissolution, and have limited flexibility in transferring ownership.