By MoneyBees
Compare the same business profit as a sole proprietor and a Pte Ltd: personal tax and MediSave against 17% corporate tax with exemptions, a director's salary with CPF, one-tier dividends and ACRA fees.
It depends on the profit. A sole proprietor pays personal tax at 0% to 24% on the whole profit. A company pays 17% after exemptions, and dividends to you are not taxed again. At low profits personal rates are often lower; as profit rises the company's exemptions and flat 17% tend to win. The calculator works it out for your numbers.
17% of chargeable income. A new company gets 75% of the first S$100,000 and 50% of the next S$100,000 exempt for its first 3 Years of Assessment, if it meets IRAS's conditions. After that, 75% of the first S$10,000 and 50% of the next S$190,000 are exempt.
Yes. For YA2026 the rebate is 50% of tax payable, capped at S$40,000, with S$2,000 paid as a cash grant to companies that employed at least one local employee in 2025, not counting shareholder-directors. No rebate has been announced for YA2027.
No. Dividends paid by a Singapore resident company under the one-tier system are not taxable for shareholders, because the company's tax is final.
Yes, if you are employed by the company under a contract of service and paid a salary. CPF is not payable on directors' fees voted at a general meeting, or on dividends.
A sole proprietor is self-employed and pays MediSave once net trade income is above S$6,000 a year, at 4% to 10.5% by age and income in 2026. Paying into the other CPF accounts is voluntary.
Registering a sole proprietorship costs S$100 for 1 year and renewing it S$30 a year, plus S$15 for the name. Incorporating a company costs S$300 plus S$15 for the name, and filing the annual return costs S$60.
A company incorporated and tax resident in Singapore, for its first 3 YAs, held by no more than 20 shareholders who are all individuals or include an individual holding at least 10%. Investment holding and property development companies cannot claim it.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).