The sole proprietorship or sole trader is the simplest form of doing business in Singapore. The Singapore sole proprietorship is suitable for small businesses carried out by one owner. According to the Companies Law in Singapore, the sole trader is not considered a distinct legal entity, which is why the owner is fully accountable for the business’ liabilities. A sole trader requires at least one manager that must be a Singapore resident and must also have a registered address.
It is also important for citizens or holders of a Singapore residence permit to have enough money before going forward with the registration as a sole trader. In terms of taxation, the sole trader will be taxed on its income as an individual in Singapore. Sole traders making any changes to the status of the business must report the changes to the Singapore Companies Register. Also, the registration of a Singapore sole proprietorship is subject to renewal on an annual basis.
In order to register a sole trader in Singapore, the following documents must be provided:
The first step of the registration procedure is the approval of the business name followed by the registration of the sole trader. The procedure is quite simple, requiring only a day to be completed if all documents are correct.
Even if setting up a sole trader is easier, foreign businessmen are usually recommended to register a limited liability company in Singapore due to the tax facilities it can benefit from.
Once the registration of the sole proprietorship is complete, the Accounting and Corporate Regulatory Authority will issue the registration number. Based on the registration number, the sole trader may open the Singapore corporate bank account and obtain an office lease if necessary. In order to open a business bank account, the sole trader will be required to submit a copy after the identity card, a print of the sole proprietorship’s business profile and a minimum deposit that depends on the bank.
For information about the advantages of setting up a sole trader you can contact our specialists in company incorporation in Singapore.