A sole proprietorship is a business owned by only one individual. In this form of business, the have the absolute say in its operations, management and the day-to-day running of the company.
Why Incorporate a Sole Proprietorship
Many chose to incorporate a sole proprietorship because it is the easiest and least costly of all business structures to set up, unlike the set up of other forms of business where there will be so many formalities and compliance requirements.
One major advantage of a sole proprietorship all profits generated will go directly to the sole proprietor.
Disadvantage of a Sole Proprietorship
There are however a downside to this. In a sole proprietorship, the business and its owner are considered a single legal entity. So. the business owner is personally liable for the debts of the business and any other legal action taken against it. You can also be sued in a personal capacity and the worst of it all, it will deem you to have an unlimited liability. Therefore, if anything of such happens, it will put your personal assets at risk.
Requirment for a Sole Proprietorship
So getting back to the questions, here is the answer. To own a sole proprietorship, you must be either a Singaporean citizen, Permanent Resident (PR) or EntrePass holder who is 18 years old and above.
Although it is highly not advised, foreigners can still apply for sole-proprietorships in Singapore.
The Business Names Registration Act 2014 states that where an individual proprietor, all the partners of a firm or all the officers of a foreign company does not or do not reside in Singapore, the individual proprietor, firm or foreign company must appoint at least one authorised representative.
Hence, if you are an individual proprietor who does not reside in Singapore, you are required to appoint a local authorized representative, who must be ordinarily residing in Singapore, be at least 21 years of age and have full legal capacity.
Foreigners who opt to reside in Singapore to run their business will however go through a very stringent process. Therefore, it’s recommended that all owners who want to manage their company’s operations and be present in Singapore seek approval from the MOM forehand, and perhaps obtain an Employment Pass or an EntrePass.
If you don’t have a valid working visa, and if any of the proposed partners do not have a SingPass, we at Paul Hype Page can assist you with the applicantion and submission on their behalf.
You should take note that only an individual with a SingPass or CorpPass can proceed to submit any online transactions, this means only legal residents in Singapore are able to do thos. They must log in to BizFile+ using their identification number (NRIC or FIN) and SingPass/CorpPass.
Basically, what we are concluding is, a sole proprietorship is not an option for foreigners.
Foreign business professionals should incorporate a private limited company instead, and it will be much helpful for the credibility and image of your business.
For further details about Singapore company incorporation, refer to our comprehensive guide and understand the process and requirement further.
Paul Hype Page & Co – Acra service provider and Asean Chartered Accountant.
Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia
Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.
How we can help you:
Step 1- Listen to your Business plan and Relocation needs.
Step 2- Analysis your Singapore Tax Planning
Step 3- Recommend the most suited type of Company Incorporation , Open Bank account and
Step 4- Arrange for your Spouse and Children Visa
Step 5- Assist as your company to hire staffs and handle all HR matters
Step 6- Every financial year end, we assist you with your yearly Acra Financial and Tax Compliance
Step 7- Assist you to expand business to Malaysia, Indonesia , Vietnam and Thailand.
Get in Touch with Us Today.
Paul Hype Page