+65 83551210 
Do you want to build an evergreen business from a start-up? A Singapore Pte.Ltd is your secret key to start your everlasting endeavor.
No matter whether you are an international founder or a Singapore local, starting with the right company type helps you avoid costly mistakes, and save a lot of time, money, and resources, which you can take advantage of to grow your business.
We will show you in this guide:
- What a Singapore private limited company is;
- Why this company type is the best;
- What is the difference between a Pte.Ltd, a Sole proprietorship and LLP;
- A proven process to successfully register a Pte.Ltd in Singapore;
- And other insights you need to maintain your company status.
1. What is a Singapore Private Limited company?
A private limited company, also known as a private limited company by share or Pte. Ltd. is the most common type of company in Singapore.
This structure is commonly used by small to medium-sized enterprises (SMEs).
This is a business structure where the company is considered a separate legal entity from its owners: The company's debts and liabilities are not the owners' responsibility.
A Pte. Ltd can have up to 50 shareholders, and the shareholders' liability is limited to the amount they invested in the company.
To incorporate a private limited company in Singapore, you must register with the Accounting and Corporate Regulatory Authority (ACRA).
Same as other company types, it must follow Singapore's regulatory requirements, such as filing annual returns and keeping proper financial records.
2. Why you should incorporate a Singapore Pte.Ltd?
Being the most common type of company in Singapore, there are undeniable reasons why many Singapore citizens and international founders choose to register this entity type.
As a business owner, you can take advantage of benefits such as
New startups in Singapore, with the right planning, can benefit from the Startup Tax Exemption scheme, which offers a 75% tax exemption on the first S$100,000 of chargeable income for the first three consecutive years.
Even after the initial startup phase, companies can benefit from the Partial Tax Exemption scheme, which provides a 75% exemption on the first S$10,000 of normal chargeable income and a 50% exemption on the next S$190,000.
That is why, many foreigners often seek our support to help them gain this competitive tax advantage, which often gets neglected by the majority of other service providers.
Singapore is a global financial hub with a strong presence of banks, venture capitalists, and private equity firms. This makes it easier for companies to raise funds through loans, equity investments, or personal/public funding.
In addition, the Singapore government provides various grants and funding schemes to support startups and small to medium-sized enterprises (SMEs). Examples include the Startup SG scheme and Enterprise Development Grant (EDG).
Limited liability is a strong advantage that many business owners want.
A private limited company is a separate legal entity, meaning that the personal assets of shareholders are protected. Shareholders are only liable for the amount they have invested in the company.
This reduces personal risk and makes it safer for individuals to invest and participate in the business.
What is more, limited liability can attract more investors, as they know their risk is limited to their investment. This can lead to easier capital raising and business growth.
A private limited company has a clear governance structure with defined roles and responsibilities for directors and shareholders. This makes it easier to manage and operate the business, especially for international founders.
Additionally, Singapore’s regulatory framework provides clear guidelines on corporate governance, financial reporting, and compliance requirements.
Now knowing the benefits of this entity type, we will need to know the difference between a Pte. Ltd and other popular company types in Singapore.
3. What is the difference between a partnership, an LLP, a sole proprietorship, and a Pte. Ltd?
In Singapore, there are several types of business structures, each with its advantages and disadvantages. Some entrepreneurs opt for a sole proprietorship, while others prefer the shared responsibilities of a partnership.
The following table compares these business types, helping you understand their key differences and see why the Pte.Ltd is the most popular in the Lion City.
| Sole-Proprietorship or SP | Partnership | Limited Partnership or LP | Limited Liability Partnership or LLP |
Private Limited by Share |
|
| Definition | A business owned by one person | An association of two or more persons carrying on business |
A partnership consisting of two or more persons. At least one general partner and one limited partner |
A partnership where the individual partner’s own liability is generally limited |
A legal entity separate and distinct from its shareholders and directors. Name usually ends with “Pte Ltd”. |
| Legal Status |
|
|
|
|
|
| Continuity in Law | Exists as long as the owner is alive and desires to continue the business | Exists subject to partnership agreement |
Exists subject to partnership agreement If there is no limited partner, the LP registration will be suspended. General partners are deemed registered under the Business Registration Act. |
The LLP has perpetual succession until wound up or struck off. | A company has perpetual succession until wound up or struck off |
| Taxes | Profits taxed at the personal income tax rates | Profits taxed at the personal income tax rates |
Profits are taxed at owner’s income tax rates (If a person is a partner) Profits taxed at corporate tax rates (If a company is a partner) |
Profits are taxed at owner’s income tax rates (If a person is a partner) Profits taxed at corporate tax rates (If a company is a partner) |
Profits taxed at corporate tax rates |
| Compliance |
Yearly renewals (one year or three years) CPF Medisave Top-Up is required |
Yearly renewals (one year or three years) CPF Medisave Top-Up is required |
Yearly renewals (one year or three years) CPF Medisave Top-Up is required |
Annual declaration of solvency/insolvency No statutory requirement for general meetings, directors, company secretaries, share |
Annual returns Statutory requirements for general meetings, directors, company secretary, share allotments, etc |
4. A proven process to register a Singapore Private Limited Company with success
Important note
To learn more about the proven process for Singapore Pte.Ltd company registration and why every step is important, please read our comprehensive guide here:
A complete 10-step guide for registering a Pte.Ltd in Singapore.
In this section, we will detail a shorter version of the process
If you are an international founder, you must have a registered agent in Singapore who can help you set up your company. In that way, international entrepreneurs can
If you are a Singapore resident or citizen, you do not need to have a registered agent.
However, support from a registered agent such as Global Link Asia Consulting is invaluable in the long run since we can help with annual filing, tax accounting, company management, and post-registration compliance.
Remember to have at least 3 company names of your choice (To avoid being identical to an existing name) so that you can register the company name with ACRA.
The name application may be referred to other government agencies for review and approval.
A company’s financial year end (FYE) represents the final day of its accounting period.
You can choose any date as your company’s FYE. Common choices include 31 March, 30 June, 30 September or 31 December.
To incorporate a private limited company in Singapore, you must present the following information.
- Information of the shareholders (Nationality, residential address, contact information);
- A nominee director (If you are the foreign founder);
- A company secretary;
- A registered address (To receive official correspondence, P.O. Box is not accepted);
- Key personnel (Auditor, CEO);
You must submit a copy of your company’s constitution when you incorporate your company.
A copy of the constitution signed by the shareholders must be kept at the company’s registered office address.
Once the company registration application is approved, you will receive your company information.
- A Unique Entity Number (UEN)
- Electronic certificate of incorporation
5. How to convert from a Sole Proprietorship to a Private Limited company?
When do you need to convert your sole proprietorship or other business structure to a new private limited company?
- You are sure your business is successful and you want to stick with it.
- You are planning to hire more employees or bring in additional shareholders.
- You want an optimal corporate tax rate of 17%. Your profit is taxed at a personal tax rate if you own an SP, which can be 24% if your profit is more than 1 million SGD.
Converting your sole proprietorship to a Private Limited Company (Pte. Ltd.) in Singapore is not complex.
With our support, you can easily have your new Pte.Ltd with your existing company name so you can still run your business without interruption.
The conversion process is as follows:
You need to file a Cessassition of Business with ACRA within 6 months after you open a Pte. Ltd. or change your business structure.
This gives you enough time to transfer all documents and contracts to your new Pte. Ltd. company.
We help you register a Pte. Ltd in Singapore with our 10-step proven process.
We also support you in fully complying with the Singapore government with new incorporation, corporate secretary, and accounting services including.
During your formation process, we help you file a Name Appeal Letter with your Name Application to ACR for the Pte.Ltd so you can still operate under your old company name.
We help you move all our business matters from the existing Sole Proprietorship to your new Pte Ltd company before the cessation date.
We also assist you in working with the bank to have all your bank assets and bank accounts connected to the new Pte. Ltd.
When the cessation date, your SP will be automatically terminated. Now you can do business with your new company.
6. How to close your Pte.Ltd in Singapore?
2 methods of closing a company in Singapore
There are two categories of company closures in Singapore. Striking off and Winding up.
- A strike-off is used when the company has finished all other legal and tax duties.
- A winding up is a longer and more formal process. It requires the appointment of a liquidator to help manage the cessation of the business and its assets.
To learn more about the company closing in Singapore, read our article here: A complete guide on Singapore company closure.
To close your Pte.Ltd company, you need to follow these steps and provide the required documents:
accordion title="Step 1: Prepare zeroised financial statements" open="true"}
Your company needs to provide the unaudited financial statements showing a zero balance.
This gives you enough time to transfer all documents and contracts to your new Pte. Ltd. company.
You need to send the tax clearance documents to the Inland Revenue Authority of Singapore (IRAS).
After getting tax clearance, you have to close your corporate bank account.
Finally, you need to send the strike-off application to the Accounting and Corporate Regulatory Authority (ACRA).
The entire strike-off process can take up to 6 months or longer, depending on how long all relevant government agencies respond to the application
7. How can GLAC help you register your Pte.Ltd in Singapore?
Global Link Asia Consulting, as your trusted one-stop corporate service provider helping hundreds of business owners start their businesses overseas and manage their companies with success, can help you
- Register a company in Singapore;
- Open a corporate bank account in Singapore with a 99% success rate;
- Choose the right company types for tax optimization in Singapore;
- Apply for Singapore business licenses;
- Get an affordable, professional registered office address for business;
- Support to open, authenticate, and manage Stripe Paypal Business in Singapore, Hong Kong, and the U.S;
- Handle all your tax accounting needs, timely annual filings, auditing, and more.
8. FAQs about the Singapore Private Limited Company registration
"Pte. Ltd." stands for "Private Limited." It is a type of business structure commonly used in Singapore.
In essence, a Pte. Ltd. company combines the benefits of limited liability with the ability to raise capital privately. This structure is commonly used by small to medium-sized enterprises (SMEs).
You can contact Global Link Asia Consulting to get the exact result. You can answer 5 questions about your business preferences, and we’ll suggest the best business structure for you.
- How will you finance your business now and in the future?
- Which is your preferred level of liability for the business's finances (Limited liability or unlimited liability)?
- Do you want to be eligible for government assistance schemes? (To see if you wish to have more or fewer filing obligations)
- Which is your preferred tax structure for your business (Personal or Corporate tax rate)?
- What is your long-term plan for your business? Do you wish to run a small-scale business or grow the business significantly?
Managing a Pte. Ltd. can seem costlier at first, as it requires hiring a corporate secretary and filing annual returns with ACRA.
However, in the long run, it is cheaper to run a Pte.Ltd since the tax benefits are significant due to a low flat corporate tax rate, numerous exemptions, and limited liability to protect your assets.
With over a decade of experience serving as a trusted partner to more than 750 business owners seeking professional development and breakthroughs in the international market, we are an expert strategic corporate service provider helping you incorporate and operate successfully in 10 different countries
Our areas of expertise include:
- Strategic Consulting and Company formation in over 10 different countries worldwide such as Singapore, Hong Kong, the U.S., Australia, Thailand, Malaysia, and offshore destinations like BVI, Belize, Seychelles, and more.
- Account opening for personal and corporate bank accounts, as well as setting up PayPal and Stripe gateqays in countries like Singapore, Hong Kong, and the U.S..
- Tax Consulting and Preparation for SFRS IFRS financial reports, corporate income tax returns, VAT/GST (Value Added Tax/Goods and Services Tax), and more.
- Opreation support:
- Registered adress;
- Foreign consular legalization;
- Trademark and patent protection registration in Singapore and the US;
- Employment Pass application in Singapore and Hong Kong;
- Website design, international SIM number provision;
- DUNS registration.
With over 10 years of experience and a team of experts with 5 to 25 years of experience (international standard certifications) as well as direct partnerships with institutions such as OCBC, UOB, DBS, PayPal, and Stripe, we are proud to offer professional, legal, transparent, sustainable services with no hidden costs.
Global Link Asia Consulting Pte. Ltd. is pleased to announce the publication of the above insightful and informative article on our official website, Global Link Asia Consulting on 23rd July 2024. The copyright for this article is exclusively held by Global Link Asia Consulting Pte. Ltd. Any unauthorized reproduction or distribution of this content without our express written permission is strictly prohibited. We value the protection of our intellectual property and appreciate your cooperation in adhering to these guidelines. Thank you for your continued support of Global Link Asia Consulting Pte. Ltd.
470 North Bridge Road, #05-12, Bugis Cube, Singapore (188735).
Unit 2302, 23/F, New World Tower 1, 18 Queen's Road Central, Hong Kong.
12th, Felix Alley Building, 151/1-2 Nguyen Van Troi, Phu Nhuan District, Ho Chi Minh City, Vietnam.
