top of page
  • a22162

Setting up a Sole Proprietorship in Singapore

Updated: Mar 21



Setting up a Sole Proprietorship in Singapore


What is a Sole Proprietorship?


A sole proprietorship is a business that can be owned and controlled by an individual, company, or limited liability partnership. There are no partners in the business.


The legal status of a sole proprietorship can be defined as follows:


  • It is not a legal entity separate from the business owner

  • Business owner has unlimited liability (i.e. the business owner is personally liable for all debts and losses of the sole proprietorship)

  • It can sue or be sued in the name of the owner


Submitting your Application


Here is a brief summary on how to set up a sole proprietorship in Singapore.

Obtaining a name, appointing an authorized representative, paying registration fees, and other steps involved in registering a new business with ACRA.


A sole proprietorship is easier to set up and less expensive to administer than a company.


Before you can register your business entity, you must have all the information:


1. Proposed Business Owner

To set up a sole proprietorship, you must be:


  • At least 18 years old

  • A Singapore citizen, Singapore permanent resident or eligible FIN holder


FIN holders are advised to verify their eligibility with the relevant pass issuing authority (e.g. MOM/ICA) prior to registration or appointment (e.g. authorized representative)


If you are currently self-employed, you must top up your Medisave account with the CPF board before registering a business, or becoming a new owner of an existing business. Visit the CPF Board website for more information on Medisave.


After registration, business owners must promptly renew their Medisave contributions with the CPF Board. Otherwise, the business may be canceled early. Foreign Owner

Foreigners residing overseas who wish to register a sole proprietorship must appoint at least one resident authorized representative (eg Singapore Citizen, Permanent Resident or EntrePass/Employment Pass holder).


FIN holders are advised to verify their eligibility with the relevant pass issuing authority (e.g. MOM/ICA) prior to registration or appointment (e.g. authorized representative). Foreigners who wish to manage sole proprietorship operations in Singapore must obtain approval from the Ministry of Manpower after registering a sole proprietorship.

Authorized Representative of a Sole Proprietorship

An authorized representative must be:


  • A natural person

  • At least 18 years old

  • Of full legal capacity

  • Resident in Singapore


If the sole owner of the sole proprietorship resides outside of Singapore, an authorized representative needs to be appointed.


Role of an AR:


  • Acts as the local contact person for the sole proprietorship

  • Receives official correspondence from ACRA (the business registration authority) on behalf of the business

  • Plays a vital role during the registration process


Additional Points:


  • The AR does not manage the day-to-day business operations.

  • The sole proprietor retains full control and responsibility for the business.


2. Residential Address

All business owners are required to provide their residential address when registering. These addresses will be publicly available when any member of the public purchases information about the business entity.


Alternate Address

For business transparency purposes, and to allow the public and other stakeholders to identify the people behind the business, some information about business officials, such as identification numbers, dates of appointment and residential addresses, can be obtained from ACRA's public records.


If you do not want your residential address to be revealed in ACRA's public records, you can register an alternate address at registration. The alternate address must be an address where you can be contacted (such as your office, your corporate service provider's office, etc.) and must be in the same jurisdiction as the residential address. It cannot be a PO Box. mailbox address. Once you register an alternate address, it will appear on ACRA's public records instead of your residential address. However, all official correspondence from ACRA will continue to be sent to the residential address.

3. Business Name

Every business needs a name to distinguish it from other businesses.


Once you've come up with a suitable name for your business, do a search to find out if it's available. Avoid choosing names which are:


  • Same as existing business.

  • Undesirable, i.e. vulgar, obscene or offensive names.

  • Banned by order of the Finance Minister.


Please read ACRA's Policy Statement on the Treat of Business Names and Name Complaints for further guidance on name selection.


Name applications may be submitted to Referral Authorities for comment (for example, if your business name has the word "school" in it, it may be submitted to the Ministry of Education for review and approval).


Click here to read more about Referral Authorities.

If you plan to apply for charitable status, please visit the Charity Portal for more information on naming criteria and other guidelines.

4. Business Activity

During the name application, you must also specify the principal and secondary activities of your business by selecting the most relevant Singapore Standard Industrial Classification (SSIC) code corresponding to your business activity. Click here to search for the relevant SSIC code.


Find SSIC Code for Business Activities


5. Business Address

When registering a sole proprietorship, you will need to provide your business address. A PO Box address cannot be used as a business address.


If you plan to start a small business from home, you can use your residential address as your business address under the Home Office Scheme.


Before lodging your business registration with ACRA, you can apply for approval under the Home Office Scheme.


If you live in a HDB flat

HDB flat owners/occupants who want to apply for the Home Office Scheme must obtain approval from the Housing and Development Board (HDB). This can be done by submitting your application through the HDB website.


If you live in a private residential property

Owners/occupiers of private residential property who want to apply for the Home Office Scheme must obtain approval from the Urban Redevelopment Authority (URA). This can be done by submitting your application through the URA website.


When you have all the information, you can log on to BizFile+ to submit your sole proprietorship registration application.


Processing Time


For sole proprietorships, registration is usually approved within 15 minutes of payment of the registration fee.


If the application needs to be submitted to another government agency for approval, registration can take anywhere from 14 days to 60 days. For example, the establishment of private schools must be approved by the Ministry of Education before they can be registered.


You can find a list of Referral Authorities here.


Registration Fees


Name application fee $15

Registration fee $100

Alternate address registration fee $40


How Bestar can Help


Bestar can assist you in several ways with setting up a sole proprietorship in Singapore:


  • Registration with ACRA: We can help you register your business with the Accounting and Corporate Regulatory Authority (ACRA), which is the official body overseeing business registration in Singapore. This can involve completing forms, ensuring you have the necessary documentation, and filing everything correctly.

  • Business Structure Advice: Bestar can advise you on whether a sole proprietorship is the right business structure for your needs. We can also help you understand the pros and cons of a sole proprietorship compared to other structures like a limited liability company.

  • Licenses and Permits: We can help you determine if any licenses or permits are required for your specific business activity in Singapore. If so, we can assist you with obtaining them.

  • Accounting System Setup: Bestar can help you set up a basic accounting system for your business. This will help you track your income and expenses, generate financial statements, and comply with tax filing requirements.

  • Ongoing Bookkeeping and Tax Services: We can provide ongoing bookkeeping and tax services to ensure your business records are accurate and up-to-date. This can help you save time and avoid penalties from the Inland Revenue Authority of Singapore (IRAS).


Overall, Bestar can provide valuable guidance and support throughout the process of setting up and running your sole proprietorship in Singapore.


To engage the services of Bestar to submit the application on your behalf, please contact us.

Comments


bottom of page