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Types of Companies in Singapore

Types of Companies in Singapore

Foreign investors have several options to choose from when establishing a company in Singapore. The decision will usually be made by taking into account tax considerations and the requirements when opening certain types of companies.

Foreign investors may choose between the simplest partnership forms and othercomplex structuressuch as local private companies, local public companies,companies limited by shares, companies limited by guaranteeOur team can help you start a branch in Singapore and a representative office. Professionals may also decide to set up sole traders in Singapore.

 Quick Facts  
 Types of legal entities in Singapore 

There are several types of companies in Singapore, such as:

– unlimited companies;

– public companies;

– private company;

– exempt company;

– sole trader;

– the branch office/representative office.  

 The characteristics of the LLC 

 The LLC (limited liability company) is known as a private company limited by shares in Singapore.

It is a company type that can be incorporated by maximum 50 shareholders (individuals and companies), which has a share capital.

The liability of the shareholders is limited to their capital contributions. 

 The characteristics of the joint stock company 

The joint stock company (or the public company limited by shares) can list its shares to the general public.

It can have more than 50 shareholders.

It is necessary to register it with the Monetary Authority of Singapore when making public offerings.  

 The characteristics of the partnership 

 Investors can register a limited partnership through the association of at least 2 partners.

1 partner must be a general partner, and the other, a limited partner, and they can be individuals or other companies. 

 The characteristics of the sole trader 

 It is incorporated by a single businessman.

There isn't any legal distinction between the owner and the business, therefore the owner holds full responsibility for any corporate debts. 

 The characteristics of the branch 

One of the company types in Singapore is the branch office, which is registered as a subdivision of the parent company abroad, for which the parent has full rensposibility.

Its incorporation must be done following the regulations of the Companies Act in Singapore.   

 Legislation regulating company incorporation in Singapore 

 Companies Act.  

 Corporate taxes 

 – 17% – corporate tax;

– 9% – GST;

– 17%  employers and 20% employees – social security contributions (to the Central Provident Fund);

– Foreign Worker Levy (the rate depends on the industry). 

 Foreign ownership rules  

Foreign investors benefit from the same ownership rights as local residents/citizens (they can own 100% of the shares of a company).  

 Double tax treaties signed by Singapore   93 treaties (and 9 limited double tax treaties)
 Main company registration steps  

– select one of the company types in Singapore;

– reserve a business name;

– find a business address and register it with the Accounting and Corporate Regulatory Authority (ACRA);

– address any other authorities, such as the Inland Revenue Authority of Singapore (IRAS). 

 Corporate tax number required (yes/no)  

 Yes

 Resident director/shareholder requirements

The foreign investor must appoint a resident director.

Provided that the investor is not a Singaporean resident, he/she must appoint a registered agent, such as our team of lawyers.  

 Can investors modify the legal entity of a Singaporean company?  

 The legal entity can be modified only by de-registering the first company and then incorporating a new one. 

 Ways in which our team can assist investors    Our team can offer professional company incorporation services, representation in front of local institutions, accounting services, tax consultancy, immigration services and many others. 

How to determine the type of structure for your Singapore company

The first step to take when starting a business in Singapore is to decide the type of company one wants to employ. In order to do that, one must know from the beginning how many owners or shareholders the company will have, as the Singapore Commercial Law provides for types of companies suitablefor both small and large numbers of shareholders.

The initial share capital of the company must also be taken into account upon registration. Planning ahead is essential, as no good enterpriser would start a business without a goal.

This is why it is very important to find out as much as possible about the best business forms for your future company in Singapore and this is also why professional help is advised. Moreover, our attorneys in Singaporecan provide you with information about the advantages of each type of company.

Partnerships in Singapore

Foreign businessmen can open partnerships in Singapore that are divided into 3 types, as follows:

  1. partnership;
  2. limited partnership;
  3. limited liability partnerships

Investors must know that partnerships and limited partnerships in Singapore are not considered legal entities. There is a legal difference between these 2 types of partnerships and our team of lawyers in Singapore can help you better understand which one is suitable for your business plans. 

The simplest way to describe a partnership is that it is a business venture that is set up by a minimum of 2 partners. According to ACRA, the partnership (the simple one) can be incorporated by partners who can be a legal entity, an individual or a limited liability partnership (LLP). 

There are specific differences between these 2 types of partnerships, as for the limited partnership (also set up by at least 2 partners), the partners can be an individual or a company, and one of the partners is a general partner and the other, a limited partner. 

The common characteristics of the 2 partnerships are: 

  1. they are not considered separate legal entities, therefore there isn’t any difference between the partners and the business;
  2. they can’t own property in their own name; 
  3. they can’t sue a third party and a third party can’t sue the partnerships, they need to sue the partners; 
  4. the partners are liable for the debts of the partnerships with their personal assets. 

Limited liability partnerships are considered corporate entities and can count up to 20 partners in Singapore. The liability of the partners is limited to the amount of money they have contributed with at the registration of the partnership. In order to register a company, you can request the legal services of our attorneys in Singapore.

In other words, the LLP retains the main characteristics of a partnership, while combining the basic characteristics of a limited liability company. Other important aspects concerning the LLP are presented below, with the help of our Singapore law firm

  • the LLP is incorporated by at least 2 founders, who have the quality of partners;
  • the LLP needs to have 1 manager who has his or her residency in Singapore;
  • the appointed manager must have an age of minimum 18 years old;
  • for the registration of the LLP, investors must pay a fee of $115;
  • the registration application formalities can be completed in 15 minutes and the entire procedure can be completed in minimum 14 days to maximum 60, provided that the approval of other institutions is necessary.  

We invite you to watch a short presentation on the main legal entities in Singapore

Local companies in Singapore

According to ACRA, there are 7 types of companies that can be incorporated in Singapore, as follows:

  1. unlimited companies – 3 types – the unlimited private company, the unlimited exempt private company and the unlimited public company;
  2. public companies – 2 types –  the public company limited by shares and the public company limited by guarantee; 
  3. private company – 1 type – the private company limited by shares; 
  4. exempt company – 1 type – exempt private company.  

Companies in Singapore may be registered according to the provisions of the Companies Act that requires at least one resident director. 

Companies limited by shares may be 100% foreign owned. The number of shareholders in private limited companies is 50. Another type of Singapore company, similar to the private limited company, is the exempt entity that must have at most 20 members, none of them a corporate body.

Public companies can be set up as companies limited by shares that may have over 50 members. This type of Singapore company  must register with the Accounting and Corporate Regulatory Authority (ACRA) before trading its shares on the stock exchange. 

Singapore companies limited by guarantee are usually incorporated as non-profit organizations (NGOs). For any of the company types registered here, we can help foreign investors when applying for permanent residence in Singapore. Clients may request the help of ourlaw firm in Singapore in order to decide the best business form for their operations.

Please verify the main conditions imposed for a company type, as the rules can vary and this can affect the process of immigration to Singapore when starting a business. 

What are the rules for appointing directors and other management personnel in Singapore? 

For all the company types presented above – the ones that are corporate entities (the 7 types presented earlier), the company’s founders must appoint directors and company secretary. The director requirements in Singaporeimpose the following: 

  1. the director of the company must be a resident in Singapore;
  2. he or she must have an age of minimum 18 years old;
  3. he or she must have full legal capacity;
  4. the person can be a Singapore citizen, a Singapore permanent resident or a foreigner who has received an Employment Pass. 

Our law firm in Singapore can help foreign investors in the process of completing visa formalities for foreigners who will be employed in this country, regardless of their function in the company (top management, executives, and others who need to obtain a residence permit in Singapore). 

Another important function that must be occupied in a corporate structure is the one of the company secretary. Legal entities must appoint 1 company secretary in a period of maximum 6 months since the incorporation date. Provided that a period longer than 6 months has passed, the company’s director can be charged with a fine of $1,000. 

We invite you to request more details concerning other aspects of the incorporation of any corporate entity, partnership or other type of legal structure that can be set up here. 

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Global Investor Program in Singapore  

Investors interested in immigration to Singapore for the purpose of starting a business can also participate in the Global Investor Program. Those who will participate in this program must pay a processing fee of $10,000 (this is the fee charged starting with 1 April 2020). Investors participating in this program will be able to relocate here with their close family members. 

If you want to arrive in this country in order to set up a business, you are invited to address our immigration lawyers in Singapore and they can handle all the legal matters that are of importance prior to your arrival in this country. All aspects concerning immigration can be dealt with through the assistance of our law firm, which also includes preparing the visa application file

If you arrive here through the Global Investor Program you will need to pay additional fees, besides the registration fee imposed by the program. For instance, when you will apply for a residence permit in Singapore, you must pay a processing fee of $100. This is the standard fee charged to all persons who will apply for a residence permit, regardless of the reason of arrival. 

Other types of Singapore companies

Other types of companies available for registration in Singapore are the subsidiary, the branch office, the representative office and the sole proprietorship. The subsidiary can be set up as a private limited company in which the main shareholder is a foreign company.

The subsidiary is the most employed type of business vehicle by small and medium-sized enterprises. The Singapore branch office is registered as an extension of the parent company and it is not a separate legal entity. The Singapore representative office has no legal status and is registered only for marketing or research purposes.

The sole trader is the simplest form of doing business in Singapore and is not considered a legal entity. For information about the requisites for opening a company you can contactourlawyers in Singapore.