This document summarizes the key aspects of sole proprietorships in Singapore. A sole proprietorship is owned and operated by one individual who has unlimited liability for the business's debts and obligations. It is a simple business structure suitable for small operations with low risks. Foreigners can register a sole proprietorship by appointing a local resident manager. The business ends when the owner dies and profits are taxed as personal income. While easy to set up and manage, sole proprietorships pose high financial risks to the owner and make raising capital difficult.

1. SINGAPORE SOLE PROPRIETORSHIP - 2013

2. SOLE PROPRIETORSHIP
This type of entity is suitable for small businesses that have negligible
or no risks. It is owned by one person who is the decisive authority
and owns all the assets and liabilities of the business.
The business is not separate from the Owner who has unlimited
liability. Therefore a Sole Proprietorship may be the simplest type but
it also the riskiest business entity.
Foreign individuals and companies can register a Sole proprietorship
but must appoint a local resident manager. Citizens, Residents,
Employment Pass holders can register a Sole Proprietorship.
Advantages Disadvantages
• Quick, easy and least expensive to set up. • The owner’s personal assets are at risk since
• Easy to administer and manage because of the liability is passed therough to the owner,
undivided authority and control. who is responsible for all debts and losses.
• Less administrative duties, on going compliance • Earnings are charged at personal income tax
requirements. rates and is deprived of incentives offered to
• All the profits generated by the business will companies.
be taxed at personal income tax level. • Lack of continuity; the business is identified
• Easy to close. with the owner therefore not perpetual and
it ceases with the death of owner and is not
transferable by part.
• Raising capital through loans from institutions
Income ($) Company Tax Rate Personal Tax Rate or investors is difficult due to inferior image
and dependency on sole owner.
20,000 0% 0%
• Must renew business registration annually and
50,000 0% (8.5%) $4,250 top up CPF account.
• Sole proprietors do not enjoy tax exemptions
100,000 0% (14%) $14,000
and rebates available to corporations.
200,000 (8.5%) $8,500 (17%) $34,000
Tax savings if you incorporate a Pte Ltd company
Online Resources
Sole Proprietorship Singapore | Sole Proprietorship vs Limited Liability Partnership vs Private Limited Company
Last updated on 18 February 2013 Copyright © 2013 Rikvin Pte Ltd

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