There are different types of business entities in which potential business can operate in Singapore. MC group with our expert advisors will be able to detail to our Clients the optimal corporate structure for their business needs.
Types of Business Entity in Singapore:
For small businesses that have no risks, sole proprietorship is best suited option. As the name suggests, only one individual is the owner of sole proprietorship. The owner owns all the liabilities and assets relating to the business and has authority to make business decisions. Therefore, it is said to be the simplest type of business entity. Work pass holders, permanent residents and Singapore citizens can get registration for sole proprietorship. After appointing a permanent resident manager, a foreign company or a foreign individual can also be registered as a sole proprietor in Singapore.
Some natural downsides of sole proprietorship can be avoided by setting up a partnership firm. Capital, strategic assets and talent, all are agreed upon the mutual terms in a partnership business.
In limited partnership, the number of partners should be at least 2 and maximum 20. In the business, at least 1 active partner and at least 1 limited partner is required to run a limited partnership business. This is best for low profile and low risk businesses. The partners in the business are liable to hold all of their liabilities and their earnings are taxed as per the personal tax rate of the partners. Work pass holders, permanent residents and Singapore citizens can do registration to open a general partnership firm. Foreign companies and individuals should have a manager that is local resident to open a general partnership firm.
Limited Liability Partnership
LLP or Limited Liability Partnership is an ideal collaboration of private limited company and a partnership firm. Since 2005, one can register for business entity of this kind and it has been following a worldwide recognition around various developed companies. With Limited Liability Partnership, the owners can flexibly operate their business as a partnership firm with enjoying the legal recognition as a private limited company. In LLP, there should be at least 2 partners and has no limit for maximum population of partners. Individuals, who are providing their professional services in the country like architects, lawyer, management advisors and accountants etc. widely prefer this kind of business entity. LLP registration is possible for local companies and work pass holders. Foreign companies and individuals should appoint a local resident manager to register for general partnership firms.
PRIVATE LIMITED COMPANY
A company that is established locally in Singapore is a private limited company. The term “Pte Ltd.” or “Private Limited” is added in the name of the company. . Foreign entrepreneurs can establish a private limited company, but with a work pass holder, a Singapore resident or a permanent resident as a local director.
Work pass holders, permanent residents and Singapore citizens are allowed to set up a company. For a business with significant growth plans and takes business risks invariably and comes out with growth, this kind of entity is best suited to set up a business.
SINGAPORE BRANCH OFFICE
A foreign firm which is registered out of Singapore and conducts significant business operations in Singapore and makes business revenues on consistent basis should be registered as a Singapore Branch office under the Companies Act in Singapore. The branch office is treated as the part of a foreign company and will not have a different legal identity. Two persons should be appointed by it who complies with authorities’ official notices and who are appointed as legal agents as Singapore citizens for rendering official services. For tax treatment, company’s branch office shall be treated as non-resident company.
REPRESENTATIVE OFFICE IN SINGAPORE
Any foreign company that wishes to run their business operations in the country should discover the opportunities first of all by setting up the RO in Singapore. This is the best option to find the market opportunities before making any large scale or long term commitment. Representative Office cannot involve in any type of business activity related to generating revenue.
A lot of representative offices can get registration from IE Singapore. International Enterprise is the registration authority for representative offices. On the flip side, insurance, banking and financial institutions are required to get registration from MAS for their Representative Offices in Singapore. ROs of financial institutions should undergo strict appraisal of Monetary Authority of Singapore