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 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, you are considered a self-employed person.
If you are engaged in any continual activity for financial gain, you need to register your business as a sole proprietorship.
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
- Copy of owner's Singapore ID
- Local residential address of the sole proprietor
- Local business address for the proposed business
- Description of principal activities
- Declaration of compliance and Statement of 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.
To register a business name, check the name availability on BizFile.
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 order of the Minister for Finance.
For more information, see the Practice Direction (No. 4 of 2003) 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 the 120 days or the name will no longer be available.
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 approval from the Urban Redevelopment Authority (URA), which you will get by submitting an application via the URA website.
Business registration with BizFile+ in Singapore
Remember that, for certain types of business (including architecture, real estate, defense, etc.) you may require approval from regulatory authorities before you can register a business. The approval process can take form 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 submitted to BizFile+.
The cost of business registration in Singapore for one year is $100, while a three-year registration costs $160.
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 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.
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