As a commercial hub of Asia, Singapore has a very rich enterprise ecosystem. Right from large multinational corporations to small sole proprietorships all forms and sizes of businesses thrive in their pro-business environment. When it comes to business formation in Singapore, a sole proprietorship is the easiest business entity form to go with. But note that this type of business entity is suitable only for small investment businesses as it involves a single owner. And because it is a business with single ownership, you will have no limited liability protection and your assets will not be protected from any business risks that you may face during the course of your business.
Advantages of Setting Up a Sole Proprietorship in Singapore
- It is the easiest and the least expensive business structure to set up
- As a sole proprietor, you are in complete control of all the business affairs including decision making
- You accrue all the business income that is generated
- You are free of the obligation of filing returns annually and only need to renew your membership every year
- All the profits generated by the business will be taxed at personal income tax level
Facts to Know while Forming an SP in Singapore
- A sole proprietorship in Singapore is not a legal entity, therefore, it cannot register another business firm and the business owner is personally accountable for all the liabilities incurred during the course of the business
- A person whose age is at least 18 years of age is eligible to register a sole proprietorship
- Sole proprietors must appoint at least one manager who is a natural person of at least 21 years of age and who is ordinarily resident in Singapore – a Singapore Citizen or a Permanent Resident. In most cases, the owner himself/herself will act in this capacity
- Singapore citizens and the PRs registering for a sole proprietorship must ensure that their Medisave accounts have sufficient funds before registering the business
- Sole proprietors do not need to audit their accounts or file annual returns with ACRA as any profits will be taxed as personal taxes.
- Any changes to the particulars of the business must be lodged with the Registrar within 14 days from the date of the change
- All business communication materials such as letterheads and invoices must bear the registration number
How to Register a Sole Proprietorship in Singapore?
Company registration in Singapore involves the steps: (1) reserving a name, and (2) registering the business. The complete registration process is computerized and quick and can be completed within a day provided all the documents are lodged properly with due endorsements. However, if the name or the nature of business requires referral to another authority, it may take up to a few weeks. To register a sole proprietorship in Singapore, the detailed steps are as follows:
- Register your business name at the Singapore Business Registry
- Fill in the application form to incorporate your business in Singapore. Complete the form by mentioning all the details mentioned
- Once all the details are filled in, attach the required set of documents and submit the form to the authorities
- Once you submit the application form for sole proprietorship business registration and if everything is in order, the registrar will send an email notification confirming the registration along with the registration number
- After you have received the email notification of successful registration, you can retrieve the business profile for your new Singapore sole proprietorship that contains important registration information
The original email notification of business incorporation along with the business profile are the two important documents that you will need in Singapore to open a business bank account, sign an office lease, obtain a business phone line, etc.
Documents Required to Set Up a Sole Proprietorship in Singapore
- Proposed business name
- An application form
- Description of principal activities
- Local business address for the proposed business
- Copy of owner's Singapore ID
- Local residential address of sole proprietor
- Declaration of compliance and Statement of Non-Disqualification
Singapore citizens or permanent residents, holders of Employment Pass or EntrePass may register a Sole Proprietorship in Singapore. Foreign individuals and companies may also register a Sole Proprietorship but must appoint a Singapore resident manager. If you are looking forward to setting up a sole proprietorship in Singapore, you must take help of a consultant who will ease down our work. Business Setup Worldwide can be your go-to consultant for services like business formation, registration, accounting and bookkeeping, tax and visa services. Contact us today to know more.