Registration of a
Sole Proprietorship

A Sole Proprietorship is the simplest form of business entity with only one owner who is the decisive authority and responsible for all assets and liabilities belonging to the business. Singapore citizens or permanent residents; holders of Employment Pass, EntrePass or Dependant’s Pass may register a Sole Proprietorship. Foreigner individuals and companies may also register a Sole Proprietorship but must appoint a local resident manager.

Features of a Sole Proprietorship

• It does not have a separate legal entity
• The owner has unlimited liability
• It cannot own property

Advantages

• No annual returns filing required of a Sole Proprietorship as income is taxed at personal income tax rate.
• Very few compliance requirements and written documentation
• The business itself is flexible. Any decisions and changes can be made easily as there is only one person to make the relevant choices.
• All the profits generated by the business will belong to the Sole Proprietor.
• Sole Proprietor own his business and so are able to sell or transfer it as he wishes.

Disadvantages

• A Sole Proprietorship has unlimited liability. This means that the Sole Proprietor is responsible for all debts and losses of the business, which can put all personal assets at risk.
• In the event of a business failure, the creditors can sue the sole proprietor for all debts incurred.
• As there is only one person with overall responsibility for the success of the business this may increase the pressure on that individual.

Summary of Setup Requirements for a Sole Proprietorship

• Minimum one owner
• A Singapore registered office address
• For foreign individuals and companies only: minimum one manager who must be a Singapore resident

Approval and Renewal Information

Rikvin can help you register a Sole Proprietorship with ACRA within one hour provided all required documents are in place. Once approved, ACRA sends out a confirmation of registration via email. The registration is valid for one year and subject to an annual renewal.

Related Topics

Singapore Sole Proprietorship Registration

A Sole Proprietorship is the simplest form of business entity with only one owner who is the decisive authority and responsible for all assets and liabilities belonging to the business. Singapore citizens or permanent residents; holders of Employment Pass, EntrePass or Dependant’s Pass may register a Sole Proprietorship. Foreigner individuals and companies may also register a Sole Proprietorship but must appoint a local resident manager.

Summary of Setup Requirements for a Sole Proprietorship

• One owner
• A Singapore registered office address
• For foreign individuals and companies only: minimum one manager who must be a Singapore resident

What you need to know before registration

Business Name: The business name must be approved by ACRA before the Singapore Company can be incorporated. ACRA will reject a proposed company name for the purpose of incorporation if:

• It is identical to another existing Company Name
• It is undesirable
• Names or trademark which are similar to established names such as Coca Cola and Temasek

Owner: Only one owner is required. The owner is to be held accountable for any debts and losses of the Sole Proprietorship.

Managers: Appointment of a manager for Singapore Sole Proprietorship is required only if it is registered by a foreign individual or company. The manager must be an "ordinarily" resident in Singapore, which means a Singapore citizen, a Singapore permanent resident; a person who holds an Employment Pass, Entrepass or a Dependants' Pass.

Registered Address: Every business registered in Singapore is required to have a registered office address. The registered address must be a physical address and cannot be a PO Box. Use of residential address is allowed for certain types of business.

Opening of a Corporate Bank Account

Once the Sole Proprietorship has been registered, you may open a corporate bank account with any of the local or international banks based in Singapore, and in some cases, overseas.

If you are unable to come to Singapore, you may choose a bank that allows opening of a corporate bank account without your presence. Standard Chartered Bank and HSBC are two of the international banks that allow you to open a bank account without you having to come to Singapore.

Post Incorporation - What you need to know

Licenses and Permits: Some business activities in Singapore are subject to regulation by government authorities. Even if your business firm has been registered you cannot begin operation unless you have the necessary approval or license from the relevant government authorities.

Private schools, video companies, travel agencies, liquor distributors, moneylenders, banks, Financial advisers, childcare centres and importers, wholesales and retailers of liquor licenses are some examples of business that need permits to operate. For more details, refer to Singapore Corporate Tax

Registered Office Hours: You must have a registered office address and the office must be open to public for minimum of three hours per day during normal business hours on weekdays.

Registration Number: Business registration number issued by ACRA must be on all letterheads, invoices, billings or other documents used for official business communications.

Custom Registration: If your business activities involve import, export and transshipment in and out of Singapore, you will need to register your company with the Singapore Customs and obtain a CR Number or commonly known as Custom Registration. The central registration number is mandatory for Singapore companies or organizations engaged in trading activities.

Singapore Goods and Services Tax Registration: Goods and Services Tax (GST) is a tax on the supply of goods and services in Singapore and on the import of goods into Singapore. Goods exported from Singapore and international services provided from Singapore are exempt from GST. The current rate is 7%.

All Singapore business must register for GST if their annual taxable revenue is more than S$1 million, or currently making taxable supplies and the annual taxable revenue is expected to be more than S$1 million. The business is expected to register for GST within thirty days from the time it is deemed liable.

You may also choose to register for GST voluntarily. Approval for voluntary registration is at the discretion of the Comptroller in IRAS. Once approval is given, you must remain registered for at least two years.

Registration of Singapore Central Provident (CPF): The Central Provident Fund or CPF is a compulsory pension fund scheme in which the employer and employee contribute a percentage of the monthly salary to the fund. CPF contribution by the employer is mandatory for all local employees who are Singapore citizens or permanent residents earning more than S$50 a month. The maximum CPF contribution rate for employer and employee is 14.5% and 20% respectively and can be lower depending on certain factors such as employee age, permanent resident status, etc. CPF contribution for foreign employees is not required.

Tax and Singapore Sole Proprietorship

Singapore Sole Proprietorship, though a tax resident, is not considered as a company entity; therefore its profit is taxed at Singapore personal income rate.

In the event where the owner is a company the profit from the Sole Proprietorship will be taxed at corporate tax rate.

Documents Checklist

• Proposed Sole Proprietorship name
• Copies of NRIC and/or Passport information of the business owner
• Brief description of business activities
• Registered office address for the Sole Proprietorship