Choose the right business structure in Singapore in 2026

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You want to run a business in Singapore, or through Singapore, and need to pick the right legal form. This guide compares the 2026 options, explains who can run them from abroad, and shows what each one really costs in tax.

Singapore legal forms of business in 2026: the key figures

Is this guide for you?

Read on if you…

• are a freelancer, consultant or founder planning to set up in Singapore;
• want to know whether you can run a Singapore company from abroad;
• are weighing a sole proprietorship against a company.

Probably not your case if you…

• are setting up a regulated fund or bank – that needs MAS licensing advice;
• only need the corporate tax details – see corporate income tax in Singapore.

What are the legal forms of business in Singapore?

Businesses register with ACRA, the Accounting and Corporate Regulatory Authority, through its BizFile portal. You have six realistic options.

• Sole proprietorship: you and the business are the same person. Simple, cheap, unlimited liability.
• General partnership: two or more partners, unlimited liability, each taxed on their share.
• Limited liability partnership (LLP): a separate legal entity where partners' liability is limited. Profits are taxed in the partners' hands.
• Private limited company (Pte Ltd): a separate legal entity owned by shareholders, managed by directors. Taxed at company level.
• Branch of a foreign company: an extension of your overseas company, not a separate entity.
• Representative office: for market research only. It cannot sign contracts or earn income, and lasts up to three years.

The comparison matrix

Which structure is right for what you do?

Freelancers and consultants

A sole proprietorship is the fastest way in. Profits are added to your personal income and taxed at 0% to 24%. It works best for Singapore citizens and PRs.

Here's the catch for foreigners: owning a business does not give you the right to live or work in Singapore. You need an EntrePass or an Employment Pass, and most foreigners get one through a Pte Ltd, not a sole proprietorship.

Founders and growing businesses

A Pte Ltd is the default. Liability is limited. Profits are taxed at 17%, but exemptions bring the effective rate down a lot for small profits. Dividends you pay out are one-tier – taxed once at company level, then tax-free for shareholders.

Two exemption regimes apply, and you get one or the other:

1. Start-up tax exemption (first three YAs): 75% of the first S$100,000 and 50% of the next S$100,000 exempt. You need at most 20 shareholders, all individuals or with at least one individual owning 10% or more. Investment holding and property development companies are excluded.
2. Partial tax exemption (after that): 75% of the first S$10,000 and 50% of the next S$190,000 exempt.

A corporate income tax rebate is also granted in some years. YA 2025 had a 50% rebate capped at S$40,000.

Foreign companies expanding to Singapore

A branch is quick, but the parent carries all risks and the branch misses the start-up exemption. A subsidiary Pte Ltd is usually the better long-term choice.

Can you run a Singapore company from abroad?

Legally, yes. A Pte Ltd only needs one director who is ordinarily resident in Singapore – a citizen, PR or holder of an Employment Pass or EntrePass with a local address. Many non-resident founders use a nominee director from a corporate services provider. The company also needs a registered office address in Singapore.

Now the tax warning. Singapore treats a company as tax resident where its control and management is exercised – basically where the board makes its strategic decisions. If you make all decisions from Lisbon or Bangkok:

• the company may not be Singapore tax resident, so it loses treaty access and the start-up exemption;
• your country of residence may treat it as resident there, or say it has a permanent establishment (PE) – a taxable presence – where you work;
• a nominee director who only signs papers does not move control to Singapore.

Honestly? A Singapore company only works for a remote founder if real decisions happen in Singapore. Get the structure reviewed before you incorporate through our business setup service.

How do you set up a Pte Ltd, step by step?

1. Reserve a name on BizFile (S$15).
2. Prepare the constitution and details of shareholders, directors and the registered address.
3. Appoint a locally resident director. If you are not resident, use a nominee or move first.
4. Incorporate on BizFile (S$300). Approval is often same day.
5. Open a bank account and pay in share capital.
6. Appoint a company secretary within six months.
7. Register for GST if taxable turnover exceeds or is expected to exceed S$1 million.
8. File every year: Estimated Chargeable Income within three months of year-end, Form C-S or C, and the ACRA annual return.

Small companies meeting two of three criteria – revenue up to S$10 million, assets up to S$10 million, up to 50 employees – are exempt from audit.

Common mistakes (and what they cost)

• Running a "Singapore company" entirely from abroad → it may become tax resident in your home country, and the profits are taxed there at full rates.
• Assuming a company gives you a visa → you still need an EntrePass or Employment Pass, and working without one breaches immigration law.
• Missing the company secretary or annual return deadlines → ACRA fines and, in serious cases, prosecution of directors.
• Using a sole proprietorship for a risky business → unlimited liability puts your personal assets on the line.
• Ignoring the GST threshold → late registration brings back-dated GST and penalties out of your margin.

Frequently asked questions

Can a foreigner own 100% of a Singapore company?

Yes. There is no local shareholding requirement for most businesses, so a foreigner can own all the shares of a Singapore Pte Ltd. The only local requirement is a director who is ordinarily resident in Singapore. If you do not live there, you can appoint a nominee director, though that has tax and liability implications.

What is the cheapest business structure in Singapore?

A sole proprietorship has the lowest setup and running costs: registration of around S$115 and no audit or company secretary. It suits citizens and PRs with low-risk businesses. For foreigners, a Pte Ltd is usually needed anyway to obtain a work pass, and its tax exemptions often make it cheaper once profits grow.

How is a Singapore Pte Ltd taxed in 2026?

At a flat 17% on chargeable income. New companies can use the start-up exemption for their first three years of assessment: 75% of the first S$100,000 and 50% of the next S$100,000 are exempt. After that, the partial exemption applies. Dividends paid to shareholders are one-tier and tax-free.

Do I need to live in Singapore to register a business there?

No, but you need local help. A sole proprietorship or partnership owned by non-residents needs a locally resident authorised representative. A Pte Ltd needs a locally resident director. Living abroad while running the business raises tax residency and permanent establishment questions in your own country, which you should check first.

Is an LLP a good choice for freelancers in Singapore?

It can be, for two or more professionals working together. An LLP gives limited liability like a company, but is taxed like a partnership: each partner pays personal tax on their share. There is no corporate tax layer or start-up exemption. It needs at least one manager ordinarily resident in Singapore.

Does a Singapore company pay tax on foreign income?

Foreign income is taxed only when received in Singapore, and many types are exempt, such as foreign dividends, branch profits and service income that has already been taxed abroad, under conditions. Since 2024, section 10L can tax gains from selling foreign assets when the company lacks economic substance in Singapore.

Related guides

• Corporate income tax in Singapore
• Business expenses in Singapore
• Specific taxes in Singapore
• Practical guide to obtaining tax residency in Singapore
• Legal forms of business in Hong Kong
• Legal forms of business in Thailand
• All country tax guides

Sources

• ACRA – Accounting and Corporate Regulatory Authority
• IRAS – Corporate income tax
• Singapore Statutes Online – Companies Act 1967
• GoBusiness Singapore
• Ministry of Manpower – Work passes

This guide is general information, not personalised tax advice. See how we research and review.