Attractive tax frameworks, a high degree of personal safety, a reliable legal system, cutting-edge infrastructure, and a strategic position in the heart of Asia are some of the many reasons people decide to set up a business in Singapore. In this article, we will guide you through the process of registering a sole proprietorship.
Who can be a sole proprietor in Singapore
A self-employed person in Singapore is defined as a citizen or permanent resident of Singapore who derives income from or outside Singapore through any trade, business, profession, or vocation excluding employment under a contract of service.
If you make income by buying and selling goods or providing professional or personal services other than under a contract of service (employment contract), you are considered a self-employed person.
If you are engaged in any continual activity for financial gain under a name other than your own full name, you need to register your business. If your business is wholly owned by yourself, you could choose to register the business in the structure of a sole proprietorship. The advantage of using a sole proprietorship over using a company is that it has less administrative requirements. However, a disadvantage is that the business’ liabilities will be your personal liabilities.
Registration process of sole proprietorship in Singapore
The registration of sole proprietorships in Singapore consists of two steps: reserving the business name and the registration itself.
To register your business, you need the following:
- Proposed business name
- Particulars of the sole proprietor
- Local residential address of the sole proprietor
- Local business address for the proposed business
- Description of principal activities
- Declaration of compliance and non-disqualification
Business name registration in Singapore
According to the purview of the Business Names Registration Act (BNRA), to set up a business in Singapore, you need to register the business name under which your activity is carried out unless the exemption mentioned below applies to you.
To register a business name, check the name availability on BizFile beforehand.
When choosing a name, make sure it complies with the following guidelines:
- The name isn't too similar to another existing business or company
- The name isn't inappropriate (obscene, vulgar, or offensive)
- The name isn't prohibited by the order of the Minister for Finance.
For more information, see the Practice Direction (No. 4 of 2020) issued by ACRA (Accounting and Corporate Regulation Authority) in Singapore.
Using a personal name as a business name in Singapore
Individuals who want to carry on business in their own name are exempted from registration.
Example: Anna Maria, an independent teacher who issues invoices to her students for her services, is exempted from registering her business with ACRA. However, if Anna decides to issue invoices under a business name (for instance, "Incredible Teaching"), she will be required to register her business name with ACRA.
Once you decide on the business name, register it via BizFile. The name application fee is $15. Once the ACRA has approved the name, it will be reserved for 120 days. You need to register the business within 120 days or the name will no longer be reserved for you.
Choose an address for your sole proprietorship in Singapore
You are required to provide a business address when registering a sole proprietorship. You need to notify the ACRA of the principal address from which you will conduct the business.
The Home Office Scheme allows you to use your residential address as the business address. Home Office Scheme allows homeowners, occupants of private residential properties, or tenants to set up small-scale offices in their homes. You need to satisfy the general Home Office Scheme guidelines and ensure that the business doesn't disturb the neighbors.
- If you are a Housing and Development Board (Singapore's public housing authority), flat owner, or occupier, you should seek approval by submitting an application via the HDB website.
- If you are a private residential property resident (owner or occupant), you will need to seek approval from the Urban Redevelopment Authority (URA), by submitting an application via the URA website.
Business registration with BizFile+ in Singapore
To register your business in Singapore, submit an application via BizFile+ website, using your SingPass or CorpPass. You may carry out the registration on your own, or through a registered filing agent.
Remember that, for certain types of business (including architecture, real estate, defense, etc.) you may require approval from the respective regulatory authorities before you can register a business. The approval process can take from 14 business days up to 2 months.
Here is the list of referral authorities in Singapore who review selected business registration applications before they can be approved to BizFile+.
The cost of business registration in Singapore for one year is $100. A renewal of the registration for one year costs $30, while a renewal of the registration for three years costs $90.
After successful registration, you will receive a system-generated Unique Entity Number (UEN), a general identification number that all business entities must use when transacting with government agencies.
Registering a business in Singapore as a foreign citizen
To set up a sole proprietorship, you will need to be a citizen or a Singapore permanent resident.
Foreign citizens can register a sole proprietorship in Singapore if they appoint an authorized representative who is a legal resident: a Singapore citizen, permanent resident, or EntrePass holder.
If you are a foreign citizen already residing in Singapore, you need approval from the Ministry of Manpower before setting up a sole proprietorship. Only individuals with a SingPass can apply via BizFile+ website.
Taxes in Singapore
To help new business owners navigate the tax system in Singapore, ACRA created the New Sole-Proprietorship and Partnership Start-Up Kit. This kit is an interactive e-learning guide to help newly ACRA registered businesses better understand their tax obligations as an owner and employer and prepare them for the tax filing process.
If you are planning on working with international clients, consider using Deel to streamline compliance and payments.
