Starting a business in Singapore 

Singapore is situated in the heart of Southeast Asia, enabling businesses to access a market of more than 600 million people. Recognised as a global financial hub that attracts and connects international corporations, Singapore’s extensive reach can be vital for companies looking to establish a regional or global presence. 

Additionally, Singapore’s port is among the busiest globally. Strategically located at the crossroads of the main trade and shipping routes of the world, the country is classified as a premier international maritime centre.  

Singapore has long earned a reputation as one of the world’s most advanced economies. Despite its small domestic market and lack of natural resources, Singapore successfully weathered through the financial crises of 1997 and 2008. 

Today, Singapore’s economy is one of the most stable in the world, with no foreign debt, high government revenue, and a consistent current account surplus. 

Singapore is known for its pro-business environment which attracts sizeable foreign investments. It is ranked among the easiest places in the world to set up and manage a business. 

Singapore law also allows local corporations to be 100% foreign owned. Parent companies that form Singapore-based subsidiary companies can also enjoy the benefits of Singapore incorporation. 

Among Singapore’s unique advantages are its low effective personal and corporate tax rates. The corporate tax rate is capped at a flat rate of 17% on a company's chargeable income. New companies may also take advantage of exemptions and tax breaks to pay even lower rates. 

There are no capital gains taxes in Singapore, which follows a single-tier tax policy; for income that has been taxed at the corporate level, dividends can be distributed to its shareholders tax-free. 

Singapore’s legal system is based on adopting English common law, as well as best practices from other mature legal systems, Singapore’s modified legal system has received global recognition for its efficiency and integrity.  

Singapore’s commercial legal system is known for its fairness and impartiality, making it the natural choice of venue for dispute resolution, especially mediation and arbitration, and trial in Southeast Asia.  

Singapore provides a robust intellectual property (IP) rights regime, backed by a trusted legal system and strong IP infrastructure. The government’s IP policy is attuned with the aim of encouraging innovation, creativity and growth of industry and commerce in Singapore.  

In addition to registering a trademark in Singapore, Singapore businesses can also file for global trademark registration locally, as the country is a signatory to major IP conventions and treaties, such as the Patent Cooperation Treaty, Paris Convention and more.  

Singapore has a world-class and productive workforce – a key ingredient for the success of any business. Continuous training initiatives have also been put in place to prepare workers for future challenges. 

The country is renowned for being a multiracial society. Its citizens originate from diverse backgrounds, giving it the capacity to offer workforce solutions requiring multilingual and multicultural sensitivities.  

Singapore provides a variety of visa schemes for qualified entrepreneurs and working professionals. The government is always looking to attract foreign investments and augment its local workforce with high-level talent from across the globe, which is in line with the flexible immigration policies of Singapore. 

If you are an entrepreneur who needs to relocate to Singapore to run your business or hire foreign professionals, the government has established several work visa categories. 

A private limited company (Pte ltd) is a limited liability entity in which the shares are held by a maximum of 50 shareholders and are not available to the public. Most privately incorporated businesses in Singapore are registered as private limited companies. 

The shareholders of a private limited company can be individuals, corporate entities, or both. 

An exempt private company (EPC) is a type of private limited company that can only have a maximum of 20 shareholders, with no shareholder being a corporation. 

Designed for large businesses, a public limited company (PLC) may offer shares to the public. PLCs have no limit on the number of shareholders and are subject to significantly more stringent rules and regulations, since they have the power to raise funds from the public. They are also typically listed on a stock exchange.  

A PLC, by guarantee, is a type of business entity intended for non-profit purposes. Instead of shareholders, the company has members who act as guarantors and will contribute a predetermined amount in the event of liquidation.  

A sole proprietorship is the simplest type of business structure in Singapore. From a legal perspective, a sole proprietorship is not a separately incorporated entity and therefore the owner and the business are the same; the owner personally owns all assets and liabilities of the business. There is no protection of personal assets from business risks and liabilities.  

As the sole proprietor of a business, you hold unlimited liability. Consequently, if your business is unable to pay all its liabilities, the creditors to whom your business owes money can seek repayment from your personal assets. 

A partnership structure attempts to address the limited-expansion constraint faced by a sole proprietorship by allowing two or more people to establish and co-own a business. A partnership has no legal existence separate from its partners. It comes to an end with death, insolvency, incapacity, or the retirement of a partner.  

Any unsatisfied partner can also give notice at any time for the dissolution of the partnership. A partnership type of business structure may make sense in a limited number of situations, such as for professional partnerships. For example, engineers, lawyers, or architects may form a partnership business without registering a company. Partnerships in Singapore can be of three types: general partnership, limited partnership, and limited liability partnership.  

A subsidiary company is a locally incorporated private limited company where the majority shareholder is another local or foreign company.  

In Singapore, companies can be fully foreign owned, which allows foreign companies to incorporate a subsidiary company and own 100% of its shares. 

Under Singaporean law, a subsidiary company is considered a separate entity from its foreign parent company and is treated as a local Singapore company. Therefore, the foreign company and its assets cannot be held accountable for the debts and liabilities of the subsidiary. 

A Singapore branch office is a registered legal entity which is treated as an extension of the foreign parent company.  

Branch offices are allowed to conduct any type of business activity that falls within the scope of its parent company and can repatriate its earnings and capital. Branch offices will only be taxed for the earnings derived from its operations in Singapore. 

Branch offices are considered a non-resident entity, which means that the foreign company’s head office will be held liable for any acts of commission or omission committed by the Singapore branch office.  

A representative office (RO) is a temporary setup which enables foreign companies to explore the market or manage company affairs in Singapore without conducting any profitable business activity. 

ROs can only conduct market research or feasibility studies. The office is not permitted to conduct business activities that yield profit.