Singapore Private Limited Company

Company formation for a limited liability company

Considered the best business formation structure for most businesses, a Private Limited Company in Singapore provides an ideal foundation for doing business locally and internationally.

Registering a Singapore Private Limited Company is easy and can be done entirely from outside of Singapore, making it the business type of choice for most foreign entrepreneurs and corporate entities. To setup a private limited company in Singapore, we can assist you in your company registration. We are available for all your business registration needs, from preparation of registration documents to corporate compliance post-registration.

Benefits of Singapore Private Limited Company

• Perfect business type for an offshore company
• 100% foreign ownership approved
• No capital gains tax
• Full service packages for private limited companies are available

Singapore Limited Liability Company

Why Incorporate a private limited company?

The private limited company business structure provides more benefits

A private limited Singapore company is the obvious choice for both foreign and local entrepreneurs. A Singapore limited liability company provides personal asset protection from business liabilities, private limited companies benefit from special tax incentives from the Singapore government, and have the best corporate structure that allows your business to expand and do business internationally. The liability of the members is limited up to the amount of share capital subscribed by them. That is why we recommend private limited company as the business formation of choice when registering a business in Singapore. Learn more on why incorporating a private limited company is best.

Limited liability

Private limited company is a limited liability company

Being a distinct legal entity a private limited company is separate from its directors and its shareholders. As a private limited company it can acquire assets, debt, join contracts, file lawsuits or be a party to a lawsuit under its own name. Liability of shareholders in the company will be limited to the amount contributed to the capital of the private company. Also by using a corporate service company it is possibly to hire nominee shareholders and directors which can make the already easy process of company registration and maintenance in Singapore even easier and can further lower your liability.

Take on investment by bringing in new shareholders

Credible for investment from both foreign and domestic sources

Private limited companies in Singapore are free to take on capital investors by issuing shares. Shares in the limited liability company can be issued to investors at the time of the company registration or at a later date through selling of existing shares or issuance of new shares. Investors almost always will want to invest into a business with a separation between personal and business assets. This separation is not provided by other types of business formations. Bankers prefer to issue loans to a private limited company rather than other business types.

As an incorporated business entity, a private limited company portrays a more positive image than a sole proprietorship or a partnership. This also helps to attract investors who will be more willing to partake in investing into a private limited company as it provides a long-term advantage of growth and expansion internationally. With the credible image a private limited company allows for, potential clients, bankers, professionals and suppliers will take your business more seriously. Singapore private limited companies benefit from an effective tax rate much lower than nearly every other jurisdiction worldwide.

The tax rate for a Singaporean private limited company on profits under S$300,000 is essentially only 8.5% while the maximum corporate tax rate is just 17% on profits over S$300,000. On top of this, for the first 3 years of existence qualified private limited companies pay 0% on the company’s first $100,000 profits annually. Singapore has a single-tier tax rule meaning all income taxed at a corporate level will be tax free when distributed as dividend.

Best structure for an foreign parent company

Easy to set up and maintain from abroad

A Singapore private limited company provides many benefits making it an ideal choice for setting up an offshore business. Singapore private limited companies have the advantage of extremely low tax rates starting literally at 0% corporate taxes on your first $100,000 profits for the first three years. Effectively a Singaporean private limited company pays around 8.5% on the first $300,000 profits with maximum tax rate of 17%. Learn more about a Singapore Offshore Company.

Ownership by a foreign individual

Singapore allows 100% foreign ownership of registered companies

As a foreigner you will be able to own and operate your own private limited company whether you stay outside or within Singapore and will retain all the benefits on tax rates, credibility and ease of maintenance without having an actual physical presence in Singapore. As a foreign individual if you elect to operate your business from within Singapore and immigrate as an individual or with your family you can fairly easily obtain an appropriate visa. On the other hand if you were to choose to operate your company from overseas we can provide you with all the onshore local support you will need for maintaining the compliance of your business. We recommend the private limited company which is Singapore’s limited liability company business formation type as the most ideal for company registration.

Ownership by a foreign business

From subsidiary companies to branch office to representative office

As a foreign company registering to setup in Singapore, you will have the choice of setting up subsidiary office, a branch office, or a representative office in Singapore.

Subsidiary Company

• Singapore allows 100% foreign ownership in companies.
• Most preferred formation for small to mid-size foreign businesses
• Excellent tax efficient corporate body
• A Singapore subsidiary company is considered a separate entity from the foreign company
• Company registration process is fairly straightforward

Branch Office

• A Singapore branch office is a registered legal entity
• Is treated as an extension of the foreign company
• A branch office is generally considered a non-resident entity
• Generally a less attractive option for most businesses.
• Company registration process can be somewhat complicated by regulations of the parent company’s jurisdiction

Representative Office

• Cannot enter contracts, or engage in trading directly
• Good for undertaking market research
• A representative office is generally considered a non-resident entity
• Must be staffed by a representative from the foreign company
• Company registration process can be somewhat complicated by regulations of the parent company’s jurisdiction

Other Business Formation types in Singapore to consider

Singapore provides a selection of business entity types

Although we almost always recommend our clients to register as a private limited company, Singapore does offer other business formations but almost all provide less protection for the members/shareholders of the entity.

Singapore Limited Liability Partnership

• This is a recent addition and most advanced alternative to the private limited company
• A mixture of partnerships and companies in features and functionality
• Targeted towards professionals such as lawyers, and doctors
• In most cases not well suited for a business that carries on a trade
• Registration process is straightforward and easy
• Learn more about a Singapore Limited Liability Partnership.

Singapore Limited Partnership

• Introduces the concept of a limited partner with limited liability and general partner with unlimited liability
• Liabilities are limited to the partner’s investment for a Limited Partner
• Unlimited liabilities lie with the General Partners
• Formation is straightforward and simple
• Learn more about a Singapore Limited Partnership.

Singapore General Partnership

• Partners are personally liable for the debts and liabilities of the business
• Partners are responsible for the actions of other partner
• Business setup is simple and easy
• Learn more about a Singapore General Partnership.

Singapore Sole Proprietorship

• Cheapest of the business formation options
• Applicant needs to be a Singapore Resident
• Sole proprietorship is not a separately entity from the individual who registers it
• The owner is liable personally without limitation
• Most people are not aware of the financial risk
• Learn more about a Singapore Sole Proprietorship.