Singapore Company Incorporation with Paul Hype Page
Company Registration at Paul Hype Page Singapore

Among the business entities which exist in Singapore today are the sole proprietorship, the private limited company, the general partnership, and the limited liability partnership (LLP). Each entity has unique characteristics, advantages, and disadvantages.

Singapore is among the world’s most business-friendly countries. Its low corporate tax rates, pro-business laws and policies, and thriving corporate environment have driven the development of business there and brought much investment from abroad to the country. Singapore’s transparent legal and business frameworks have resulted in businesses from all over the world choosing the country as a center of business operations and gain a foothold in the Asia-Pacific region.

Before selecting the type of business to be set up, an entrepreneur or business owner must consider certain key factors. The choice of business contributes significantly to the growth and progress of the business. The amount of tax to be paid, any future business expansion ventures and the obtaining of loans for business growth are all connected to the choice of business.

Business Trust

Many of Singapore’s business owners choose to operate a business trust. A business trust is a trust which operates and runs a business enterprise. It bears complete responsibility for all of a company’s business operations. Every registered business trust is required to have a trustee-manager. The primary responsibilities of a trustee-manager are the protection of beneficiaries’ interests and the management of the trust’s business activities. Beneficiaries have economic interests in the assets of the business but basically have no rights to the assets themselves.  A competent trustee-manager will take good care of the business and steer it towards future growth and expansion. Singapore’s Business Trusts Act, created in 2004, is the country’s most important law regulating business trusts and their activities.

Foreign Branch 

Many foreign companies open a branch in Singapore. These companies usually use foreign branches to give themselves a wider geographical scope and establish a greater presence at an international level. In this way, the branches increase revenue for their parent company by generating profits in several different locations. In Singapore, foreign branches are regarded as part of the parent company because they carry out the same business operations as those of the parent company.

Due to the fact that foreign branches are deemed to be part of the parent company, they are not considered to be separate incorporated entities. This fact leads to certain other situations being the case as well. For example, all company assets and liabilities will be placed under the purview of the parent company. This is because the parent company bears complete responsibility for every part of its branch offices’ welfare and financial condition.

If you are interested in opening a foreign branch in Singapore, we at Paul Hype Page & Co can be of assistance. Once you have contacted our incorporation experts, we will see to it that every step of the incorporation process is completed in the proper manner.

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Foreign Subsidiary

Foreign subsidiaries are commonly set up by foreign small and medium enterprises (SMEs) in Singapore. There are several reasons for this. Among these reasons are increased business flexibility, fewer liabilities, and an abundance of advantages related to taxation. Foreign subsidiaries are regarded as private limited companies. Therefore, private limited companies are incorporated as their own separate legal entities. However, a foreign subsidiary must also have a corporate entity as its primary shareholder. Regardless of the identity of the foreign subsidiary’s main shareholders, the subsidiary’s assets and liabilities are the responsibilities of the subsidiary company itself.

Subsidiaries are also allowed to operate under a name which differs from that of their parent companies. Any name which has been approved by the Accounting and Corporate Regulatory Authority (ACRA) may be used.

Foreign subsidiaries which have been incorporated in Singapore will be regarded as Singapore tax residents if their control and management is located there. Due to Singapore’s low corporate tax rates, many foreign companies select this option because of the potential tax savings.

Although tax rates in Singapore are already low, we at Paul Hype Page & Co can help you save even more tax money. Our well-trained and highly experienced staff members will do their best to ensure that you receive as favorable a tax outcome as possible.

Sole Proprietorship

In Singapore, the simplest business structure than can be formed is the sole proprietorship. The owner of a sole proprietorship owns all of the company’s assets and profits. However, sole proprietorships are not legally regarded as separate legal entities. A sole proprietorship is not separate from its proprietor or owner. Therefore, the owner of the business will be held responsible for any liabilities incurred through business activities.

When starting a sole proprietorship, it is also important to note that creditors have the right to seek personal assets from the business owner if the owner does not make payments punctually. Owners of start-ups and new entrepreneurs often overlook this fact, and so experience financial troubles that could easily have been avoided.

Sole proprietorships are most suitable for low-risk small businesses because of the possible financial issues that may potentially arise. Any business owners who plan to start one must consider their current financial status and determine if they have the financial means to cover any potential losses.

Partnership

The final type of business structure to be considered is the partnership. Business owners who are wary of the risks involved in setting up sole proprietorships often consider opening a partnership. As is implied by the name, a partnership is owned by more than one person. Partnerships are generally less risky than sole proprietorships. This is because, should any misfortunes befall the owners of a partnership, the losses suffered can be jointly borne by the multiple owners. Certain problems might even be avoided because a general partnership typically has more corporate influence than a sole proprietorship does.

However, this does not mean that partnerships are completely risk-free. This is because the legal identity of a partnership is intrinsically tied to the status of the owners of the partnership. If at least one of the partners dies, retires, or becomes unable to perform the necessary duties as one of the partnership’s owners, the partnership will cease to exist.

It is also possible for one or more of the partners to apply for dissolution of the partnership at any given time. However, before the partnership can officially be terminated, all partners involved must fulfill all fiduciary duties which they owe each other. Apart from a dissolution via applications to court, dissolution of a partnership may also take place upon the occurrence of certain terminating events or during incidents of misrepresentation or fraud. Before entering into a partnership, business owners ought to be aware of these facts. Once they are better informed about these details, they will be more able to run a partnership in a competent and effective manner.

Reasons to Start a Business in Singapore

Regardless of the type of business selected, there are tremendous benefits that come with owning a business in Singapore.

Owning a business in Singapore allows the business owners to interact with other entrepreneurs from all over the world. This is due to the fact that Singapore is located in an extremely strategic geographical location. This location has helped turn the country into one of the world’s leading financial hubs and corporate powerhouses.

Another advantage of owning a Singapore business is the fact that the corporate tax rate in Singapore is extremely low. This rate is 17%, one of the world’s lowest. In addition, foreign entrepreneurs can also enjoy tax benefits through double taxation agreements with many different countries around the world. Singapore’s presence in these agreements eases the tax burden of foreigners who live there but are tax residents of another country.

Singapore also has some of the world’s most transparent immigration policies. These policies make it convenient for foreign entrepreneurs to visit the country and search for business opportunities in Singapore. Therefore, the country’s economy and corporate atmosphere benefit from the immigration policies, because they encourage foreign entrepreneurial activity, foreign investment, and international business opportunities which develop links to Singapore.

Finally, Singapore’s business environment is extremely conducive to entrepreneurship. According to a survey conducted by students of the National University of Singapore, most graduates of Singaporean universities have a deep penchant for entrepreneurship and are enthusiastic about starting up their own business in the nation. The fact that the country’s youth show such desire to start a business bodes well for the country’s corporate future. The pro-business environment, much like the immigration policies, also attracts a sizeable amount of foreign investment. In addition, certain industries in Singapore currently appear to be extremely open to the entry of more lucrative and sustainable businesses. These industries include the electronics, automotive, chemical, and manufacturing industries.

Conclusion

There are a great many options to choose from when starting a business in Singapore. Therefore, it is important to give due consideration to all options and do the necessary research on the requirements before planning. In general, locals who start a Singapore business will find more success if they select the sole proprietorship as their business structure. If they handle all business liabilities appropriately, their company should be able to go from strength to strength. Locals who are more risk-averse could also select the partnership. This is because, due to the fact that partnerships are owned by multiple people, the impact of any negative circumstances which may arise will be mitigated because more than one person will suffer the consequences. However, foreign conglomerates or businesses which plan to set up one or more offices in Singapore should lean towards opening foreign branches or subsidiaries. This is because foreign branches increase the parent company’s reach, bring the parent company more profits, and aid in the internationalization of the parent company. If the foreign business is an SME, then opening a foreign subsidiary will usually be the preferred option due to the reduced costs incurred during business operations as well as the heightened level of flexibility.

Type of Singapore Business Formation FAQs

What types of business can I form in Singapore?2020-11-18T10:30:24+08:00

Among the types of business that you can form in Singapore are:

  • Business Trust
  • Foreign Branch
  • Foreign Subsidiary
  • Sole Proprietorship
  • Partnership
Do I need to print my business name and registration number on the invoice, etc.?2020-11-18T10:31:03+08:00

Every business firm must print its full registered business name and the Registration Number on every letterhead, invoice, bill, and other documents used for purposes of its business. 

Can one owner file all changes in the business?2020-11-18T10:31:09+08:00

Most changes can be filed online by anyone owner who can access it thru his SingPass. They include change in Business name, Business Activity, Principal place of business, Branches & Cessation of Business. Changes such as Entry/Withdrawal of owner, Entry of new manager, Termination of business will require other partners to complete the online filing by endorsement using their own SingPass.  

If it is a change in personal particulars of one owner such as email address, handphone number, residential address, or change in his or her personal name (such as taken up a deed poll to give up the previous personal name), it can be filed by that owner only. 

What are the changes that I can file online?2020-11-18T10:30:36+08:00

You can file the changes in the Business Name, Business Activity, Principal Place of Business, Branches, Entry/Withdrawal of Owner/Manager, Change in personal particulars of Owner/Manager & Termination, or Cessation of Business online. 

2021-01-26T18:47:23+08:00January 7, 2015|4 Comments

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4 Comments

  1. Chibugwu Nwaogu February 1, 2017 at 11:06 pm

    Dear Paul,
    I want to relocate to Singapore with my family and kick-off mass production of a Special Carriage Bag which I will export to Nigeria my home country where I had already sampled the product and recorded good sales. How will I achieve this goal.
    Presently, I’m a project/ safety engineer supervising an on going construction of oil & gas project in Nigeria and equally, registered a family business firm in Nigeria..

    Best regards
    Chibugwu

    • Paul Hype Page February 13, 2017 at 7:54 am

      Dear Chibugwu,

      You can start by starting your company (Pte Ltd) in Singapore.

      We will drop you an email with more information of our Incorporation with Employment solution for your better understanding.

      Cheers
      Paul

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