6 Singapore company types you can not miss

2. What is the right company type for registration for foreigners?

For investors and foreign companies aiming to set foot in Singapore, you have several options to establish a presence: through a branch office, a subsidiary, or a representative office.

• Subsidiary

 Subsidiary is a private limited liability company incorporated in Singapore, where the parent company becomes a shareholder. Additionally, foreign investors can create independent companies with foreign individuals as shareholders.

• Branch Office

It functions as an extension of the parent company and isn't a separate legal entity. The parent company bears the legal responsibility for debts and losses incurred by the branch office.

• Representative Office

This is a temporary setup for conducting market survey research without engaging in revenue-generating activities or holding legal status. It functions as an extension of the parent company and isn't a separate legal entity.

When you choose to register a subsidiary in Singapore, you can choose between these main business entities.

3. What are the most popular types of companies in Singapore?

Now you understand the importance of choosing the right business structures and an overview of company types in Singapore. Let’s take a look at 6 popular business entity types for both foreigners and local residents.

3.1. Sole Proprietorship

A Sole Proprietorship is a business structure that can be owned by an individual, a company, or a limited liability partnership.

The legal status of a Sole Proprietorship can be defined as follows:

• It is not a separate legal entity from the business owner
• The business owner has full control of the company’s business activities, which means the business owner is personally liable for all the debts and losses of the Sole Proprietorship
• The higher the tax burden the higher the profit: The company is taxed at a personal level.
• Low market credibility due to how risky it is to operate and maintain.

Suggestion: We suggest this company type only for entrepreneurs who want to test their business ideas first at a small scale before actually incorporating a new company in a different form and doing any business. 

3.2. Partnership

A Partnership is a business incorporated by multiple partners (at least 2 partners and a maximum of 20 ). The partner can be an individual, a company, or a limited liability partnership. If the number of partners exceeds 20, the partnership must be transformed into a Private Limited Company (Pte.Ltd.) following the rules of the Companies Act, Chapter 50.

There are several ways to set up a partnership in Singapore

• General partnership (or Partnership)

A General Partnership involves two or more individuals who agree to manage and share profits and losses of a business jointly. There is no legal separation between the partners and the business.

• It is not a separate legal entity from the business owners
• The partners are personally liable for all the debts and losses of the partnership
• The partners are each taxed with personal tax off their income.

This is usually a popular choice for special professions where partners collectively manage the firm's operations such as law, architecture, and medical.

• Limited Partnership (LP)

In a Limited Partnership, there are two types of partners—general partners who manage the business and have unlimited liability, and limited partners who invest in the business but have limited liability, often without involvement in management. The role of limited partners is often for funding. The partners are each taxed with personal tax off their income.

This is a popular choice for real estate (investment) partnerships, where some partners invest money but don't participate in day-to-day management.

• Limited Liability Partnership (LLP)

An LLP combines features of partnerships and limited company, providing limited liability to its partners. Each partner is not responsible for the negligence or misconduct of other partners.

Partners have limited liability protection, meaning they aren't personally liable for the LLP's debts or other liabilities. The partners are each taxed with personal tax off their income ( if the partner is a company, it is taxed at the corporate level).

Limited Liability Partnership must keep these documents to maintain its footing in Singapore: 

• Accounting records
• Profit and loss accounts
• Balance sheets

These documents will help the company to explain the transactions and financial position in a certain period of time.

Important note

For the failure to comply with the record-keeping obligation, the company and its partners shall be liable to prosecution and fines imprisonment, or both.
In addition, a Limited Liability Partnership is required to submit to ACRA an annual declaration of solvency or insolvency ( being able or unable to pay its debts, respectively).

3.3. Private Limited Company (Pte.Ltd.)

A Private Limited Company is a business structure with a separate legal entity (which means the company has the right to own property and perpetual succession). Usually, the names of Private Limited Companies end with "Pte. Ltd." or "Ltd" as a part of the company name. The shareholders of a private limited company can either be individuals or corporate entities or both.

This is the most preferred type of business structure because individuals or companies will obtain numerous benefits when registering a Ptd.Ltd in Singapore such as

• Incentives from the government when opening this type of company in Singapore;
• Limited liability;
• Ease to raise capital and attract new shareholders;
• Professional and credible image with strong branding;

3.4. Public Company

A public company is a business entity whose shares are available for purchase by the public through a stock exchange. It can raise capital by selling shares to investors. For example, DBS Group Holdings Ltd. (DBS), which is listed on the Singapore Exchange and offers its shares to the public for trading

• Public companies are subject to stringent regulations and disclosures set by the country's regulatory authorities, such as the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Exchange (SGX).
• They have a broad ownership structure, allowing the general public to invest in the company through stock ownership.
• Public companies are required to publish financial reports and follow transparency standards to ensure accountability to shareholders and the public.

This article will not delve deep into this type of company since this is usually for larger entities with widespread operations.

4. How to choose the right Singapore company types for your business?

To help you better choose the right one, we have created this table below for better comparison.

 In addition to this table, preparing an answer for each of the questions below can help you make a more informed decision

• How much is the investment capital? 
• How many owners? 
• Responsibilities and obligations? 
• What are the risks faced? 
• What are the advantages and disadvantages of different business entities? 
• Is it easy to wind up the company?

5. Who can set up a business in Singapore?

Individuals, as well as companies, have the opportunity to register your company in Singapore.

It is important to note that setting up a company in Singapore necessitates a fundamental understanding of the diverse company structures available in this thriving nation as well as a complete overview of company incorporation and management. For that purpose, please read our Register a company in Singapore with 100% success (An in-depth guide) to know what you need to prepare in detail.

6. How can we help you incorporate and manage your company in Singapore with success?

Global Link Asia Consulting, as your trusted one-stop corporate service provider helping hundred of business owners start their business overseas and manage their company with success, we 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.

7. FAQs about Singapore company types

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;
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• Trademark and patent protection registration in Singapore and the US;
• Employment Pass application in Singapore and Hong Kong;
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• 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.

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