Types of Singapore Companies
Sun Tzu's Art of War says that if you know yourself and your enemy, you can fight a hundred battles without danger. Since there are many types of companies in Singapore, before registering a company, you must first understand what kind of business entity to register is beneficial to you and most suitable for you, so that you don't have to worry about whether you have made the wrong decision.
Any individual or organization involved in business activities in Singapore must register with the Accounting and Corporate Regulatory Authority (ACRA) of Singapore in accordance with the Singapore Business Registration Act.
Singapore Limited Company
- Private Limited Company – less than 50 shareholders Public Limited Company – more than 50 shareholders
The most widely used private limited company in Singapore is the company as it is a separate legal entity and shareholders only have limited liability to the company. A subsidiary is also a type of limited liability company.
Exempt private companies
It is a type of limited company, shares cannot be held by the company, and the number of shareholders cannot exceed 20. The company must prepare unaudited financial statements and submit them to the annual general meeting of shareholders and the Singapore Accounting and Corporate Regulatory Authority for filing.
Set up a branch in Singapore
When an overseas company sets up a branch in Singapore, the branch is an extension of the parent company. According to Singapore's commercial laws, the parent company and the branch are considered as one, and the parent company must be responsible for unlimited liability for the subsidiary.
Setting up a representative office in Singapore
This means that an overseas company sets up a representative office in Singapore. The representative office cannot be involved in any commercial activities and can only conduct market research and assistance work.
Comparison and understanding of limited liability companies, representative offices and branches
| type | limited liability company | Representative Office | Branch Office |
|---|---|---|---|
| company name | Different from the head office | Must be the same as the parent company | Must be the same as the parent company |
| Business Scope | Various businesses | Market research and assistance | Must be the same as the parent company |
| Suitable for | Companies expanding their business | Foreign companies acting as liaison offices and conducting market research | Overseas companies expanding their business |
| shortcoming | Have compliance obligations, such as financial reporting and auditing | It is a temporary institution and cannot generate any income | Have compliance obligations, such as financial reporting and auditing |
| ownership | 100% local shareholding/100% foreign shareholding | No ownership | 100% overseas owned |
| Independent legal | yes | no | no |
| Number of shareholders | unlimited | not applicable | not applicable |
| Minimum requirements for company establishment | At least one shareholder and one director. Shareholders can be companies or individuals, 100% local or foreign shareholding | Appoint at least one representative from the head office to Singapore | At least one local resident agent |
| Limited Liability | limited | unlimited | unlimited |
| audit | need | unnecessary | unnecessary |
| Annual review and tax return | need | unnecessary | need |
| Annual declaration | Submit audit reports of subsidiaries | not applicable | Submit audit reports of parent company and branches |
| Tax treatment | Tax residents enjoy local tax benefits | not applicable | Not a tax resident, no local tax benefits |
| Company validity period | Permanent unless cancelled | Up to three years | Permanent unless cancelled |
Sole Proprietorship
This business entity is suitable for Singapore Citizens or Permanent Residents. Since this business entity is a sole proprietor, individuals have unlimited liability.
General Partner
Similar to a sole proprietorship, but requires at least two people to form a business, and the individuals have unlimited liability.
Limited Partnership
This business entity is not a separate legal entity. It must have at least two partners, a general partner (unlimited liability) and a limited partner (limited liability).
