Can a Foreigner Register a Sole Proprietorship in Singapore?
Singapore's sole proprietorship means that one person or one company owns a business. The business can have no partners, and the owner has the ultimate say in the complete running of the business.
The sole proprietorship can have its own name so long as the name isn't:
- Identical to another entity
Sole proprietorship requires that the owner of the business notify the Registrar of the following:
- The business' principal place of business
- Any place where business is performed
Homeowners can even be allowed to conduct small-scale operations in residential premises. This is where the question of whether or not a foreigner can register a sole proprietorship occurs.
Can a Foreigner Register as a Sole Proprietorship in Singapore?
Singapore, unlike many other countries, does allow foreigners to register a sole proprietorship within the country. There are certain rules and regulations that must be met for a foreigner to legally have a sole proprietorship:
- A local resident must be appointed as an authorized representative of the company.
- The manager, who is a resident of Singapore, must be at least 21 years of age.
This is the key most important thing for all foreigners that want to own their own business in Singapore. The local resident will remain an authorized representative, while the owner resides outside of Singapore.
In the event that the owner does reside within the country in the future, the local representative can be removed by the company.
Foreigners can also opt to reside in Singapore and open their business. This is a very stringent process, and as such, it's recommended that all owners who want to manage their company's operations and be present in Singapore seek approval from the MOM first.
How to Register a Sole Proprietorship
Singapore uses the BizFile system for all business registrations. An application must be sent through the electronic filing and information retrieval system to be properly filed. Before registration can occur, there is some preparation that must take place.
The preparation which is required is only valid for citizens or permanent residents in Singapore.
Foreigners will not need to conduct this preparation, which includes:
- Topping off Medisave accounts
Business owners, or potential business owners that want to register their business, have one of two main options to do so:
- BizFile. The BizFile system requires the register to have a SingPass or CorpPass. The owner will be required to provide an application with their endorsed consent via the BizFile system.
- Registered Filing Agent. A registered agent can include a corporate secretarial firm, accounting firm or law firm. The agent will submit and complete the online application on behalf of the owner. This option will provide the guidance of a professional with experience registering a business in Singapore. This is an optimal choice for ensuring that all of the requirements to start a business are met and the paperwork is approved.
Business registration will require a fee that is subject to change. Fees, at the time of writing this article, are:
- $15 for a name application fee
- $100 for a 1-year business registration
- $160 for a 3-year business registration
Singapore's system is very quick, and a business may be registered as quickly as 15 minutes after the registration fee is paid. There are circumstances where the registration can take 14 days to 60 days to complete if the application needs to go to other government agencies for approval.
For example, the Ministry of Education's approval will be needed if a business owner wants to build a private education institute or school.
A registered filing agent will be best able to help you determine what agencies may need to approve the registration and provide a better overall estimate of the registration approval time.
Quick Facts When Registering a Foreign Sole Proprietorship
Sole proprietorship in Singapore differs in many respects than other countries. These quick facts will help familiarize you on how sole proprietorships work:
- Sole proprietorship is not a separate legal entity.
- Owners are accountable for all of their business liabilities.
- Profits are treated as income for the business owner
- Sole proprietorships cannot register another business firm
- Annual tax returns and audits of accounts are not required, as profits are taxed as personal taxes
- Investment in sole proprietorship is limited
- Renewal of the business is required annually
Running and operating the business is easier when the owner resides in the country. This allows for a tighter control of the business' operations, but it's not a necessity under current laws.
Foreigners are welcome to start and run their business in Singapore. The country's tough stance on corruption is a major bonus, and Singapore has been ranked as the easiest place to setup a business.
Singapore has a competitive economy, and the diversity of culture, architecture and languages makes this a top destination for business owners.
Singapore is also a safe, clean country with an efficient transport system and an education system that meets all international standards.