Singapore Sole Proprietorship Registration Guide

In Singapore, you must register a business (sole proprietorship, private limited company, or limited liability partnership) if you are engaged in any activity that is carried out on a continual basis for the purpose of gain. This guide provides information on registration of a sole proprietorship in Singapore. If you are not sure which type of business entity is right for you, you should read Singapore business structures guide first.

Sole proprietorship is the simplest form of business structure in Singapore. However, it is suitable only for very small single-owner type business that does not carry any risks. Unlike a private limited liability company, a sole proprietorship does not provide limited liability protection and your personal assets are not protected from business risks. 

Sole-Proprietorship - Quick Facts

• A sole proprietorship in Singapore does not constitute a separate legal entity therefore it is not distinct from the owner/ proprietor. The business owner is personally accountable for all liabilities incurred during the course of the business.
• Any Singapore registered company or a natural person of at least 18 years of age is eligible to register a sole proprietorship, however it has to be noted that undischarged bankrupts and persons disqualified under specific clauses are not eligible to register.
• Sole proprietorship must appoint at least one manager who is a natural person of at least 21 years of age and who is ordinarily resident in Singapore - a Singapore Citizen, Permanent Resident, Dependent Pass holder, Entrepass or Employment Pass holder. In most of the cases, the owner himself/herself will act in this capacity.
• A local Singapore address must be provided as the business address for the sole proprietorship. Under the Home Office Scheme, residential premises can be used as a business address but owners must seek written approval from HDB (for HDB properties) or URA (for private properties) to use their homes (owned or rented) for home office use.
• Singapore citizens or PRs registering Sole Proprietorship must ensure that their Medisave accounts have sufficient funds before proceeding with the registration.
• Profits of the sole proprietorship are treated as income of the individual who owns the entity, thus it is subjected to a tax rate as that of personal income, and where the owner is a pte ltd company, the profits will be subjected to corporate tax rate.
• As a Singapore sole proprietorship is not a legal entity, it cannot register another business firm.
• Sole proprietorship must ensure that all letterheads, invoices, bills or other documents used for the purposes of doing business have the registration number listed.
• Sole proprietorships do not need to audit their accounts or file annual returns with ACRA as any profits will be taxed as personal taxes.
• Raising funds or expansion options as a sole proprietorship will be limited because investors will hesitate to deal with non incorporated entities.
• Any changes to the particulars of the business must be lodged with the Registrar within 14 days from the date of change
• Registration of Singapore sole proprietorship needs to be renewed annually.

Considerations for Foreigners

Foreigners must engage a professional services firm to register a business in Singapore. Foreigners interested in setting up a sole-proprietorship in Singapore must apply for an Entrepreneur Pass (EntrePass). Setting up a sole proprietorship is typically viewed as a one-man show and as a result, the chances of an EntrePass approval are usually low. Most of the foreign business professionals prefer to register a private limited company instead.  To find out how to incorporate a Singapore company, see Singapore company registration guide.

Documents Required and Registration Procedure

In order to register a sole proprietorship business in Singapore, the following documents/information are required:

• Proposed business name
• Description of principal activities
• Local business address for the proposed business
• Copy of Singapore ID for the owner
• Local residential address of sole-proprietor
• Declaration of compliance and Statement of Non Disqualification

Registration procedure involves a) reserving the name; and b) registration of the business. The registration procedure is computerized and quick. Registration of sole proprietorship can be completed within 1 day, provided all the documents are lodged properly with due endorsements. However if the name or the nature of business requires referral to another authority, it may take a few weeks. Examples of businesses that may be referred to relevant authorities include financial, media, educational services, etc.

 To maximize chances of speedy name approval, make sure that it

• is not identical or too similar to any existing local company or business names
• does not infringe with any trademarks or copyright
• is not obscene or vulgar
• is not already reserved

Documents Issued by ACRA

Once you have submitted the sole proprietorship business registration application and if everything is in order, the registrar will send an email notification confirming the successful registration along with the registration number. Singapore government does not issue a hardcopy registration certificate anymore by default as the softcopy is valid and acceptable in Singapore.

After you have received the email notification of successful registration, you can retrieve a business profile for your new Singapore sole proprietorship that contains important registration information. The original email notification of business incorporation along with the business profile are the two important documents that you will need in Singapore to open business bank account, sign office lease, obtain a business phone line, etc.

Bank Account Opening

After registering the sole proprietorship in Singapore, a bank account can be opened in any of the several international, foreign and local banks in Singapore. The business can open separate accounts of various currencies or a single multi-currency account. The account opening procedure varies across the banks and most of the bank require the business owner to be present in person while opening the account. Typically, the following documents will be required:

• Account Application
• Copy of Singapore Identity Card for the owner
• A latest print out of the business profile for sole-proprietorship
• Minimum Deposit (varies by bank) in Cash or Cheque

The bank has the sole authority to approve or deny the opening of an account. The duration for opening a business bank account in Singapore upon submitting all the required documents may vary between one working day to a week. The minimum account balance and the other bank charges vary depending on the banks. For more information, see Singapore bank account guide.

Final thoughts

Sole proprietorship is the basic no frill type of entity suitable for businesses with no or negligible risk. This type of business entity essentially meets the statutory requirement to register all profiteering activities carried out on a continuous basis. Freedom from compliance formalities and undivided authority is a merit but also the limiting factor for potential growth and development. Due to the unlimited liabilities, we do not recommend sole proprietorship to business professionals. Instead, we recommend that they incorporate a private limited Singapore company.