Foreigners can register a sole-proprietorships in Singapore, but they must appoint an authorised representative who is a legal resident in Singapore if they reside outside of Singapore. A legal resident includes:
There are 2 key challenges that foreign entrepreneurs may face after registering a sole proprietorship, which are:
1. Difficulties in obtaining work visas
To kick start your business as a foreigner in Singapore, you need to hold a proper working visa to legally work here and also relocate your family to Singapore. Having a sole Proprietorship as a business structure would give the Ministry of Manpower an impression that the business is not going to expand and therefore will not hire many local staffs in future. As a result, when you, as a foreign entrepreneur, apply for an Employment pass or EntrePass, it is less likely to be approved.
Even if it is approved, the business will face difficulties in getting visa approval for their future foreign staffs. If the foreigner does not have an approved working visa, it will also mean that he will have difficulties in opening a personal bank account and obtain a lease as he does not have the visa to stay in Singapore after his travel or business visa expires.
2. Difficulties in expansion and financing
Sole Proprietorships have trouble in expansion and hiring staffs. It gives people the impression that it is small business and therefore banks and suppliers are less willing to extend credit. Furthermore, when it comes to hiring, sole proprietorship business cannot give stock option as a hiring or rewarding incentive. It is also difficult to raise capital from investors as sole Proprietorship only allows one owner and all control of the business lay in one person.
In order to register a sole proprietorship business in Singapore, the following documents and information are required: