Sole Proprietorship – Singapore
While there are many websites with information regarding how to set up company in Singapore, most of them focus on the process to register a private limited company. Few go into detail about the key features and process to set up a sole proprietorship.
Singapore is an attractive option for many Mompreneurs. Aside from its sunny weather and reputation for being a clean and green city, Singapore has one of the lowest corporate taxes in the world.
There are plenty of highly skilled workers such as software engineers and a population with high purchasing power.
In fact, based on a report by The Economist Intelligence Unit, Singapore has been the most expensive city in the world for the fifth year in a row.
Key Features of a Sole Proprietorship in Singapore
The characteristics (and therefore benefits) of entity types vary around the world due to differing government laws and regulations.
For those unfamiliar with the process of how to set up company in Singapore, and the benefits and features of a sole proprietorship in Singapore, below are a few key features to take note of:
- Because a sole proprietorship in Singapore is not considered as a legal entity (despite you having to go through the process of company incorporation Singapore), the company is not permitted to register another business or go through under the process to incorporate company in Singapore under its business name.
- The company incorporation Singapore of the sole proprietorship has to be renewed on a yearly basis. Failure to renew on time may incur penalties and automated cancellation of business name. The owner must then go through a “shortened” process to set up company in Singapore.
- This type of business entity is not applicable to foreigners who wish to carry out their business operations and incorporate company in Singapore.
Advantages and Disadvantages of a Sole Proprietorship in Singapore
Sole Proprietorship undoubtedly is the easiest and simplest business entity to set up in Singapore, other than the ease of setting up; it is the cheapest form of entity when it comes to company incorporation Singapore fees and the maintenance of records.
The sole proprietor has full control when it comes to making a business decision and there is no need to hold a board meeting or pass a resolution for any decision made during the course of business.
With that, making changes to the sole proprietorship is less time consuming and cheaper compared to the other type of entities available when going through the process to incorporate a company in Singapore.
This includes the termination, or strike-off, of the business. There is less compliance and statutory regulations to follow such as the annual filing of returns, a sole proprietorship will only need to renew their company incorporation Singapore business registration on a yearly basis and file their personal income taxes.
Although the sole proprietorship is easy and less expensive to start, it has its disadvantages too.
Without a doubt, the most notable disadvantages of such an entity are the owner’s unlimited liability to business debts and liabilities and the lack of tax incentives and rebates that are only applicable to a private limited company in Singapore.
There is also no perpetual succession of the business – if the owner of the sole proprietor dies, the sole proprietorship will cease to exist.
Choosing to set up a company in Singapore
In this article, I have gone through the advantages and disadvantages of starting a sole proprietorship in Singapore and company incorporation Singapore.
Hopefully, this guide has provided Mompreneurs with insight into the set up company in Singapore process and is educational for mompreneurs regarding one (of many) options of starting a business in Asia.
This post was contributed by Jin of WLP Group.
Jin is part of WLP Group, a company incorporation services provider based in Singapore.
Have you considered setting up a sole proprietorship? Share your thoughts below.