Setting up an entity in Singapore is fast and easy. Singapore has been consistently ranked as one of the best countries in the world in terms of ease of doing business by the World Bank.
Companies across the world often select Singapore for its business friendly tax regime, clear and transparent regulations, and good legal system. When you are thinking about setting up a presence in Singapore, it is important to know the various options and legal entity structures that are available and most suitable for you.
As a major financial center in the world and the second largest destination for Global Asset Management, Singapore is often the first choice for funds and financial institutions. With a strong push by a proactive and entrepreneuship focused government Singapore has also started to become the destination of choice for VCs and Startups from all around the world, esp those with a nexus to Asia, thus earning itself the nickname “The Valley of the East”. Let our experts advise you on the best structure for your organization keeping in mind cross border regulations and international tax treaties.
As an overview, there are many types of business entities in Singapore:
- Private Limited Company – A private limited company is a limited liability business with less than 50 shareholders and shares that are not available to the general public.Private limited corporations account for the majority of privately incorporated enterprises in Singapore. Private Limited or Pte Ltd has been the most common name for a Singapore private limited business. In Singapore, a private limited company is the most sophisticated, flexible, and scalable corporate structure. For serious entrepreneurs, it’s also the most favoured kind of Singapore company entity (as opposed to sole proprietorship or limited liability partnership).
- Public Limited Company – A public limited company is a limited liability business that can sell stock to the general public. Because they have the ability to raise funds from the public, a public limited company must have at least 50 shareholders and is subject to much more severe laws and regulations. A stock exchange is where a public limited business is generally listed. As public limited corporations are intended for large firms, they are not covered in this article.
- Public Company Limited by Guarantee – A Singapore public corporation limited by guarantee is a non-profit organisation that engages in activities that are of national or public interest, such as promoting art or charity. A distinct legal position and restricted responsibility for its members are two advantages of a public corporation limited by guarantee.
- Sole Proprietorships and Partnerships – Description
- Limited Partnerships (LPs) – Description
- Limited Liability Partnerships (LLPs) – Description
- Societies and Associations – Description
- NEW! Variable Capital Companies (Mainly for Funds) – Description
Which type of company entity should you choose?
When making your selection, you can use the following criteria as a general rule:
- Setting up an LLP may be a good company structure for you if your business involves selling your services via your profession (e.g., accountant, lawyer, architect, etc.) and you have one or more other partners in a comparable profession with whom you want to form a joint practise.
- In all other circumstances, forming a Singapore-based private limited company is the appropriate option. Although the compliance requirements are slightly more complicated, in the long term, it is by far the best structure.
- If you are a local resident and want to start a small business where you would be the sole owner and your products/services do not pose a risk of liability, you may find it easier to register as a Sole Proprietorship. However, you should be aware that if your firm has any obligations, the claimants may pursue your personal assets.
Let our experts suggest the best structure for your business
Our experienced team will be happy to share with you the pros and cons of the various options and also help you with the setup. Some additional things to take note of:
- It takes 1 day to setup a entity
- Funds setups will require additional registration and licensing from the Monetary Authority of Singapore