Outline
Business Structures in Singapore: A Complete Guide
Choosing the right business structure is one of the most important decisions when starting a business in Singapore. The structure you select affects liability, taxation, governance, compliance requirements, and growth potential. Singapore offers a range of business structures designed to suit entrepreneurs, investors, and professional firms, each with its own advantages and considerations.
This guide outlines the main options, explains their benefits, and helps you determine the best fit for your business goals.
Private Limited Company (Pte Ltd)
A Private Limited Company (Pte Ltd) is the most popular structure for startups and SMEs in Singapore. It is a separate legal entity, meaning shareholders are not personally liable for the company’s debts beyond their investment. This structure provides both legal protection and operational flexibility, making it ideal for businesses seeking growth and credibility.
Key Features
- Limited Liability: Protects personal assets, allowing shareholders to invest without risking personal wealth.
- Separate Legal Entity: The company can own property, enter contracts, sue, and be sued in its own name.
- Perpetual Succession: The company continues to exist even if shareholders or directors change.
- Investor-Ready: Ability to issue shares or share options to raise capital and incentivize employees.
Tax Benefits
Singapore provides robust incentives for Pte Ltds:
- Start-Up Tax Exemption (SUTE): Eligible new companies pay 0% tax on the first SGD 100,000 of chargeable income and 50% on the next SGD 200,000 for the first three consecutive years.
- Access to Grants and Incentives: Pte Ltds can qualify for government schemes that support innovation, expansion, and internationalization.
Compliance Requirements
Pte Ltds must adhere to Singapore regulations:
- Appoint at least one resident director
- Maintain a company secretary within six months of incorporation
- File annual returns and financial statements with ACRA
- Submit corporate tax filings to IRAS
Ideal For
Pte Ltds suit businesses that aim to scale locally and internationally, raise funding from investors, and establish a credible presence in Singapore. Its structure supports long-term growth, compliance, and business continuity.
Public Companies
Public Limited Company (PLC)
A Public Limited Company is suitable for businesses planning to raise capital from the public or list on the Singapore Exchange (SGX).
Requirements and Features:
- Minimum of 50 shareholders
- Compliance with SGX regulations, including audited financial statements and disclosures
- Conduct AGMs and EGMs regularly
- Meet minimum capital requirements
This structure provides access to capital markets, IPO opportunities, and large-scale investment funding but comes with higher compliance obligations.
Public Company Limited by Guarantee
Ideal for non-profit organisations, such as societies, trade associations, and charities. Members guarantee a nominal amount instead of holding shares.
Benefits:
- Surpluses are reinvested; no profit distribution
- Members’ personal assets are protected
- Governance and reporting requirements ensure transparency and public trust
This model is suitable for organisations that require legal recognition without the need for profit distribution.
Sole Proprietorship
A Sole Proprietorship is the simplest form of business in Singapore. It requires only one owner and minimal setup.
Advantages:
- Quick and easy registration via BizFile+
- Low startup costs
- All profits belong directly to the owner
- Minimal regulatory compliance
Disadvantages:
- Unlimited personal liability for business debts
- No separate legal identity from the owner
- Limited options for raising capital
Sole proprietorships are ideal for freelancers, consultants, and small home-based businesses, but generally unsuitable for businesses planning to scale or attract investors.
Partnership Structures
General Partnership
A General Partnership involves two or more individuals managing a business together.
Features:
- Partners share profits, losses, and management responsibilities
- Unlimited liability for all partners
- No separate legal entity
This structure suits trusted low-risk collaborations but is high-risk for ventures with significant financial exposure.
Limited Partnership (LP)
An LP consists of general partners with unlimited liability and limited partners whose liability is restricted to their investment.
Ideal For:
- Investment funds or private equity ventures
- Ventures seeking passive capital without giving up operational control
- Clear contractual arrangements for profit-sharing
This structure is common in Singapore’s fund management and venture capital sectors.
Limited Liability Partnership (LLP)
An LLP combines the flexibility of partnerships with limited liability protection.
Features:
- Separate legal entity from partners
- Partners liable only for their own negligence
- Pass-through taxation at the partner level
LLPs are popular for professional services such as law firms, accounting firms, and consultancies, providing flexibility while protecting personal assets.
How to Choose the Right Business Structure
When selecting a business structure in Singapore, consider:
- Risk Tolerance: Are you willing to bear personal liability?
- Funding Needs: Will you need external investors or venture capital?
- Compliance Capacity: Can you manage annual returns, audits, and tax filings?
| Business Size / Type | Recommended Structure |
| Solo entrepreneur, low risk | Sole Proprietorship |
| Professional partnerships | LLP |
| Funded startups | Pte Ltd |
| Non-profit organisations | Public Company Limited by Guarantee |
| Expansion via IPO | Public Limited Company |
For most entrepreneurs, a Private Limited Company (Pte Ltd) offers the greatest balance of liability protection, scalability, and tax efficiency.
Why a Private Limited Company (Pte Ltd) is Often Preferred
A Pte Ltd provides a robust combination of legal protection, tax efficiency, and credibility:
- Tax Efficiency: Start-Up Tax Exemption reduces taxable income in the first three years.
- Investor-Ready: Enables fundraising through shares and share options.
- Business Continuity: Perpetual succession ensures operations continue despite ownership changes.
- Credibility: Strong reputation with banks, vendors, and regulatory authorities, supporting loans, grants, and trade agreements.
Pte Ltd is ideal for entrepreneurs seeking long-term growth, investment opportunities, and a trusted corporate presence in Singapore.
FAQs
For entities, the Tax Identification Number in Singapore was formerly known as the Tax Reference number until January 2009. It is now known as the Unique Entity Number (UEN). This number is assigned by ACRA or other entities to identify the organization and provide a reference for registration and legal purposes.
To find out the UEN of a business entity, visit www.bizfile.gov.sg and type in the business name in the second search bar on the top right-hand corner.
Is UEN the same as the company registration number? UEN is previously known as the company registration number in Singapore. It was in 2009 when the Ministry of Finance and the Accounting and Corporate Regulatory Authority (ACRA) launched the UEN.
The Unique Entity Number (UEN) is the standard identification number of an entity. The UEN is for registered entities while the NRIC is for Singapore Citizens and Singapore Permanent Residents. The UEN uniquely identifies the entity.
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