Picking a business structure in Singapore comes down to two questions: how much of your own money is on the line if the business fails, and how is the profit going to be taxed. There are five legal forms on ACRA's menu (sole proprietorship, general partnership, limited partnership, limited liability partnership and the private limited company), and the cheapest one to register is rarely the one that ends up costing you the least. A sole prop costs S$115 to start and exposes your personal savings and HDB flat to every business debt. A private limited company costs S$315, shields your assets behind a separate legal entity, and pays a flat 17% corporate tax that a new company can knock down to almost nothing for its first three years. This guide walks through what each structure actually costs in 2026, how each is taxed, and the point at which switching from sole prop to Pte Ltd starts paying for itself.
Singapore registers businesses in five forms, and they split cleanly into two camps. Sole proprietorships and general partnerships are not separate legal entities. In the eyes of the law, you and the business are the same person, so a business debt is your personal debt. Limited liability partnerships and private limited companies are separate legal entities, which means the business can owe money, be sued and own property in its own name, and your personal assets sit behind a wall. The limited partnership is the odd one out: it has both, with general partners fully exposed and limited partners risking only what they put in.
Most people overthink the choice. As of October 2023 there were roughly 587,000 live entities on ACRA's register, and companies made up about 425,000 of them. The private limited company is the default for anyone running a real, growing business in Singapore. Sole proprietorships and partnerships, around 143,000 of them, tend to be freelancers, side hustles and small family trades where the simplicity is worth more than the protection.
If you genuinely cannot decide, ACRA points you to the free e-Adviser for Business Structure on GoBusiness, a short questionnaire that maps your answers to a recommended form. It is a fine starting point, but it will not weigh the tax and liability tradeoffs the way the rest of this guide does.
Registration runs through ACRA's BizFile portal, and the headline fees are small. The trap is mistaking the ACRA fee for the true first-year cost, a company needs a registered address and a company secretary, and most foreign owners need a corporate services firm to act as nominee director, which is where the real money goes.
Every structure starts with a S$15 name application. After that a sole proprietorship or partnership pays S$100 for the registration, and you choose a one-year or three-year term, so the first year is S$115, or S$175 if you lock in three years up front. Renewal is S$30 a year. A private limited company pays a flat S$300 registration on top of the S$15 name fee, S$315 all in, with no renewal but a S$60 annual return filing every year after. All figures below were checked against ACRA's published fee schedules in June 2026; ACRA last updated the company fee page on 29 January 2026.
| Structure | Name fee | Registration | Renewal / annual | Realistic first-year total |
|---|---|---|---|---|
| Sole proprietorship | S$15 | S$100 (1 yr) or S$175 (3 yr) | S$30 / year | S$115 to a few hundred |
| General partnership | S$15 | S$100 (1 yr) or S$175 (3 yr) | S$30 / year | S$115 plus a partnership agreement |
| Limited partnership (LP) | S$15 | S$100 (1 yr) or S$175 (3 yr) | S$30 / year | S$115 plus legal drafting |
| Limited liability partnership (LLP) | S$15 | S$100 | Annual declaration of solvency | S$115 plus accounting setup |
| Private limited company | S$15 | S$300 | S$60 annual return | S$1,500 to S$2,500 (local), S$3,500 to S$4,000 (foreign) |
This is the part people skim and later regret. With a sole proprietorship or general partnership there is no legal wall between you and the business. If the business cannot pay a supplier, a landlord or a court judgment, creditors come after your personal bank account, your car and your home. In a general partnership it is worse: you are liable for debts your partner ran up too, even ones you did not know about.
A private limited company flips this. The company is a separate legal person, so its debts are its own, and the most a shareholder can lose is the share capital they put in (often a token S$1 to S$100 at incorporation). Directors still have duties and can be held personally liable for fraud, wrongful trading or unpaid CPF, so the shield is not absolute, but for ordinary commercial risk it is the difference between losing the business and losing your savings.
An LLP sits in between. It is a separate legal entity, so the partnership's debts are not automatically yours, and you are not on the hook for another partner's negligence. That is useful for professional practices like law or accounting firms where partners want to ring-fence each other's mistakes. If you are weighing what is genuinely at stake, model your downside the same way you would a big personal purchase by running the numbers through a net worth calculator before you sign anything as a sole proprietor.
Tax is usually the deciding factor once a business earns real money. A sole proprietorship, partnership, LP and LLP are all transparent for tax, the business itself pays nothing, and each owner declares their share of the profit as personal income, taxed on Singapore's resident scale of 0% to 24% (the top 24% rate bites above S$1 million of chargeable income). A private limited company is taxed separately at a flat 17% corporate rate on its chargeable income, and that is where the planning gets interesting.
At low profit there is little between them, personal rates start at 0% and stay gentle for the first chunk of income. The company pulls ahead as profit climbs, because 17% is a ceiling while the personal scale keeps rising toward 24%. New companies get an even bigger head start through the Start-Up Tax Exemption (SUTE): for each of its first three Years of Assessment, a qualifying company pays no tax on 75% of its first S$100,000 of normal chargeable income and 50% of the next S$100,000, a maximum exemption of S$125,000 a year. On top of that, Budget 2026 grants a 40% corporate income tax rebate for YA 2026 capped at S$30,000, with a S$2,000 cash grant for active companies that employed at least one local in 2025.
Put concretely: a company with S$150,000 of chargeable income in one of its first three YAs sees most of it wiped out by SUTE before the 17% even applies. A sole proprietor earning the same S$150,000 declares it all as personal income and is taxed on the resident scale with no equivalent exemption. To see where your own income lands, run the figures through our income tax calculator, and if you are deciding whether to keep profit in the company or pay yourself, the chargeable income definition is the concept that ties it all together.
| Structure | Who pays the tax | Rate | Start-up exemption? |
|---|---|---|---|
| Sole proprietorship | The owner, as personal income | 0% to 24% resident scale | No |
| Partnership / LP / LLP | Each partner, on their share | 0% to 24% resident scale per partner | No |
| Private limited company | The company, separately | Flat 17% on chargeable income | Yes, SUTE, up to S$125,000/year for first 3 YAs |
The structures that protect you also ask more of you. A sole proprietorship is almost paperwork-free: renew the registration, file your business income on your personal tax return, and that is largely it. No audited accounts, no AGM, no company secretary.
A private limited company carries the full load. It must appoint at least one director who ordinarily resides in Singapore, appoint a qualified company secretary within six months, hold annual general meetings (or formally dispense with them), file an annual return with ACRA, file corporate tax with IRAS, and keep proper accounting records for at least five years. Most owners pay a corporate services firm a few hundred to a couple of thousand dollars a year to handle the secretary, filings and bookkeeping, part of why the realistic first-year cost is so far above the S$315 ACRA fee.
An LLP is the middle path: it must keep proper books and file an annual declaration of solvency (or insolvency), but it skips the company secretary and the heavier company filings. For a two- or three-person professional practice that wants liability protection without full corporate machinery, that tradeoff often makes sense.
Start with the simplest form that protects you and taxes you efficiently, then size up. If you are testing an idea, freelancing or running a low-risk side business earning modest amounts, a sole proprietorship is fine, cheap, instant, and taxed at your personal rate which is low while profits are small. The moment you take on real liability (signing leases, hiring staff, holding client money, owing suppliers) or your profit climbs past the low five figures, the company's liability shield and 17% ceiling start to outweigh the extra compliance cost.
A rough rule many advisers use: once annual profit sits comfortably above roughly S$100,000, or you have personal assets worth protecting, incorporate. Below that, the company's running costs (secretary, filings, accounting) can eat the tax saving, and a sole prop keeps things lean. LLPs are a niche pick for professional partners who want protection without a full company; limited partnerships are rarer still, mostly used for investment vehicles with passive backers.
You can also start as a sole proprietor and convert to a company later once the business proves itself, it is common, and ACRA charges S$40 to convert a firm into an LLP if that is your route. Before you do, decide where the money will live, because a company needs its own bank account; our guide to choosing a business bank account covers the options. And whichever structure you land on, plan your own drawings against your personal goals using our budgeting tool so the business does not quietly starve your household cash flow.
For a true small business or freelance side hustle with low risk and modest profit, a sole proprietorship is usually best because it costs only S$115 to register and is taxed at your personal income rate. Once you take on real liability or profit rises past roughly S$100,000 a year, a private limited company becomes worth the extra compliance for its liability shield and flat 17% tax.
ACRA charges a S$15 name fee for every structure. A sole proprietorship or partnership then pays S$100 to register (one year) or S$175 for three years, so S$115 in year one. A private limited company pays a flat S$300 on top of the name fee, S$315 in total, though the realistic first-year cost runs S$1,500 to S$2,500 once you add a registered address, company secretary and accounting.
A sole proprietorship is not a separate legal entity, so the owner is personally liable for all business debts and is taxed at personal rates of 0% to 24%. A private limited company is a separate legal entity, so shareholders only risk their share capital and the company is taxed separately at a flat 17%, with new companies eligible for the Start-Up Tax Exemption. The company offers more protection but more compliance.
No. Sole proprietorships, partnerships, limited partnerships and limited liability partnerships are not taxed as entities. The profit flows through to the owners or partners, who each declare their share as personal income and are taxed on the resident scale of 0% to 24%. Only a private limited company pays the flat 17% corporate income tax.
Yes, and it is common. Many founders start as a sole proprietor to keep costs low, then incorporate a private limited company once the business proves itself and profit grows. ACRA also lets you convert a firm into a limited liability partnership for a S$40 fee. You cannot simply relabel an existing sole prop as a company, though, you incorporate a new company and transfer the business into it.
This is general financial information for Singapore, not personal financial advice. Figures change — verify current rates against the official sources above before acting. See our full disclaimer.