Does Singapore allow foreigners to establish Pte.Ltd?
Singapore is known as the global business capital, so it’s understandable that entrepreneurs from different countries would wonder if they are allowed to start a company in a foreign land.
If you’re a foreign national, interested in registering a company in Singapore, there’s good news: you can do it! In fact, thousands of people from various countries have set up different types of companies in the city-state and continue to enjoy all the business benefits Singapore offers.
If you’re a foreigner looking to start a company in Singapore, don’t worry – you can do so just as easily as a local Singaporean!
In fact, as long as you’re over the age of 18 and have not been convicted of any legal offense or bankruptcy, you’re good to go!
In addition to the locals, its Permanent Residents (PR) and holders of EntrePass, Dependents Pass, and Employment Pass are eligible to register a company and be its shareholders.
But, you will need to be physically present in Singapore while setting up your company.
Are you a foreigner interested in starting a business in Singapore? Then this guide is for you!
We’ll reveal the different types of businesses available to foreigners, as well as the company registration requirements and costs.
- The First Step: Choosing Service Provider
Foreigners who want to form a local company in Singapore need to avail of the services of a registered filing agent, such as an accounting firm. ACRA is responsible for incorporating businesses, among other things. You may also get your hand on private company incorporation services in Singapore.
Types of Business Legal Structures Foreigners can Avail
To start off, any foreigner looking to establish a business in Singapore should decide on which legal structure he or she wishes the business to take.
The types of legal structures available include a sole proprietorship, partnership, or company.
The Advantages and Disadvantages of Different Types of Structures for Foreigners Who Want to Set Up a Business in Singapore.
As a foreigner, to register your business in Singapore, there are things you need to know about the different types of business structures available to you and their respective advantages and disadvantages.
You will also need to consider the special requirements that may apply when you are not physically present in the Country to set up or run your business.
The different types of entities you can register in Singapore as a foreigner are briefed below.
- Sole proprietorship
A sole proprietorship can be defined as a business that is owned and operated by an individual – typically with less compliance and reporting requirements in comparison to companies.
Although the owner of a sole proprietorship receives all profits, they are also held personally liable for any debts or legal action against the business.
You can register a sole proprietorship online through the BizFile+ portal using SingPass. If you don’t have a SingPass, you’ll need to avail of the services of a registered filing agent, like a corporate services firm, to fill out the application for you.
A foreigner generally doesn’t need to be present in Singapore physically to register a sole proprietorship.
If the sole proprietor does not reside in Singapore, he or she must appoint an authorized representative who resides in Singapore as well.
This authorized representative is appointed for the reason of receiving notices and undertaking responsibility for all Singapore operations on behalf of the company.
For more information on authorized representatives and forming a sole proprietorship, you may wish to refer to our guides.
- Partnership
A partnership is a business owned by at least two and no more than 20 partners. Partnerships are easy and less costly to set up than corporations and have fewer compliance or reporting requirements.
However, partners are personally liable for the debts of the partnership, which means they could be sued if the partnership can’t pay its debts.
This necessitates a high degree of trust between partners and the need for a cohesive partnership agreement.
The process of registering a partnership is comparable to the procedure of registering a sole proprietorship. Besides appointing a filing agent and/or authorized representative (if necessary), a partnership can also be registered without the physical presence of any of the partners in Singapore.
- Private Limited Company
Incorporating a company takes more time than a sole proprietorship or partnership, but it comes with the advantage of limited liability for shareholders.
This means that shareholders are not liable for any debts or legal action that was taken against the company, as the company is treated as a separate legal entity.
Wrapping Up
The process for starting a business is largely the same for locals and foreigners, but there are a few additional requirements for foreigners.
For example, they may need to appoint a local authorized representative or apply for an EntrePass, Employment Pass, or Letter of Consent (as relevant) if they want to manage the business in Singapore.
