Different Categories Of Companies Found In Singapore
A full guide to the different kinds of businesses in Singapore( types of companies in singapore)
Singapore is known as one of the best places in Asia to do business. Some of the main reasons why business is growing in Singapore are the clear rules, low tax rate, very open economy, and business-friendly environment.( types of companies in singapore)
Over the years, many investors and business owners have moved to Singapore to start their own companies. Every newcomer has the same question: what is the most reliable type of business entity to set up in Singapore?
In this blog post, we talked about the different kinds of businesses you can start in Singapore. Also, if you want to start a business in Singapore, you should look at our Complete Guide to Singapore Company Registration so you don’t miss any important steps.
What kinds of businesses are there in Singapore?( types of companies in singapore)
In Singapore, the most common ways to run a business are as a partnership, as a sole proprietorship, or as a Limited Liability Company.
Partnership( types of companies in singapore)
Another type of business entity in Singapore is the partnership, which can only be set up by at least two people. It’s clear that the partnership is not a separate thing from its partners. This just means that the partner will be jointly liable with the other partners in the company and personally responsible for all the formalities and obligations of the company, excluding the limited partners from the Limited Antalya Escort partnership.
In Singapore, there are three main types of partnerships.
- Partnerships in general (GP)
- Limited liability company (LP)
- Partnership with limited liability (LLP)
There are three types of partnerships in Singapore, each with its own key features and differences.
Legal status: A limited liability partnership is a separate legal entity. On the other hand, the general partnership and the limited partnership are not seen as two different things.
Partners’ responsibilities: In Singapore Limited Liability Partnership, partners’ responsibilities are limited to the amount they put into the partnership. On the other hand, when it comes to partners, a limited partnership or a general partnership can choose to be responsible for anything that another partner is responsible for.
Number of partners: A Singapore general partnership entity can only have between two and twenty partners. On the other hand, limited partnerships and limited liability partnerships do not have a maximum number of partners.
Tax rates: Partners in a Limited Liability Partnership pay tax on their personal income tax or their business income tax, depending on whether they are an individual or a business. Always keep in mind that Singapore partnership entities get less tax exemption than Singapore Limited Liability Company entities.
Needs for a partnership to be in compliance( types of companies in singapore)
Setting up a Singapore limited liability partnership company is easier than setting up a Singapore limited liability company.
Single-Ownership
A sole proprietorship is one of the easiest and most difficult types of business in Singapore. This is often called a “one-man show,” which means that a single person or company will run the whole business. The sole proprietorship business will not have any partners. But the company’s owner will be responsible for all of the business’s profits and losses.
Key parts of a sole proprietorship in Singapore
Some of the most important things about a sole proprietorship in Singapore are:
Legal status: The most important thing about a sole proprietorship company in Singapore is that it has a legal status and is not separate from its owner.
The owner of a sole proprietorship company is responsible for all debts, liabilities, and losses. There are no limits on how much they can be held responsible for.
Taxes: In Singapore, the way a sole proprietorship is taxed depends on how much the business owner makes on his or her own.
Compliance rules for a one-person business( types of companies in singapore)
In Singapore, a sole proprietorship business is one that requires only a small amount of maintenance. Tax returns and renewals are two of the most important things that every business needs to do with IRAS.
Company With Limited Liability
Let’s start with a limited liability company. This is one of the most common types of business entity in Singapore, especially for people who want to start their own company there.
In Singapore, a limited liability company can be set up as one of the following.
The private limited company by shares and the exempt private company are both types of private companies.
Public company: A public company whose shares are limited and whose liability is limited.
Pros of setting up an LLC in Singapore
Here are some of the benefits of running a limited liability company in Singapore:
Shareholders or the owner of a Singapore Limited Liability Company are only responsible for all the company’s debts up to the value of the shares they put into the company.
Separate legal status: A legal entity that is separate from its business owners is said to have a separate legal status. A Limited Liability Company can also be sued or sue under its own name, sign contracts, buy and own assets, and be sued.
Tax advantage. The best thing about a Limited Liability Company in Singapore is that, like all other entities, it is subject to the same 17% income tax rate. Also, the Singapore government gives all eligible companies a unique business environment and a great tax system by giving them a wide range of tax exemptions and tax relief that can easily lower the tax burden.
Singapore LLC Downsides
Having a limited liability business in Singapore is a good idea, but every business owner also needs to take care of a few other things to help their business grow. Still, a private company doesn’t have to report on as many things as a public company does. Singapore limited liability company has some problems, such as:
- Getting IRAs to file tax returns
- Getting yearly tax returns to ACRA
- Holding AGMs (Annual General Meeting)
- Putting in financial reports
- Several other tasks, as asked by the authorities in charge.
What are the options for foreign companies that want to set up a business in Singapore?
There are three types of registration options for foreign people or businesses that want to grow their business presence in Singapore and around the world.
Subsidiary
Basically, a subsidiary company is a shareholder in the parent holding company. Most subsidiary companies in Singapore are set up as private limited companies. So, these companies tend to have the same risks and benefits as a private limited company in Singapore.
Office of the representative
All foreign companies that want to grow their business in Singapore are told to open a representative office. Setting up a representative office in Singapore is often done to do research on the market, test the market, or raise brand awareness.
A representative office is not legally different from a subsidiary company. The office’s debts and liabilities will all be taken care of by the parent company in another country. Also, people are not allowed to run any businesses that make money in the country.
Main office
A branch office is an extension of the main office of the parent company, which is already outside of Singapore. For instance, a branch office in Singapore gives permission to do business. But this kind of business is not seen as a separate legal entity, so its parent company is responsible for all of the branch’s liabilities and assets.
When we talk of the tax system perspective of the branch office, then the branch office is referred to as the non-resident for tax purposes. In this regard, there will be no tax exemptions benefits given to the branch office of most foreign companies, including a newly incorporated company or local resident company. But if we compare it to a subsidiary company that is set up as a private limited company in Singapore, we will find that the subsidiary company is better.
Which kind of business is best for you?
It is always recommended to select only that type of company in Singapore, which suits you perfectly and meets your business demands.
It’s also important for anyone who wants to start a business in Singapore to think about a number of things before making a final decision, since every business has different pros and cons that you might be looking for. When setting up a company in Singapore, the most common questions are about tax benefits, investment capital, the number of business owners, and the obligations that come with each type of business entity.
We hope that the above guide to the different types of entities in Singapore has helped you understand what kinds of business entities you can register in Singapore and what their most important features are.
Source: types of companies in singapore , nature of business list singapore