Sole Proprietorship in Singapore

Sole Proprietorship · Formation from $89

Last verified: June 13, 2026

Corporate Tax

0.0%

State Tax

0.0%

Formation Cost

$89

Annual Fee

$23

Comparison Scores

Privacy, remote setup, banking, and tax efficiency

Privacy2/10

Remote Setup3/10

Banking7/10

Tax Efficiency5/10

Overall Score4/10

Calculate full formation cost

Break down one-time filing fees and recurring costs for any supported entity type.

Who Should Choose This?

Profiles that typically benefit from this entity

Freelancers and independent consultants looking for a simple legal structure.
Small home-based businesses (e.g., home bakers, private tutors).
E-commerce sellers testing a low-risk business model before scaling.
Solo entrepreneurs who do not plan to seek external funding or take on significant debt.

Who Should Avoid This?

Scenarios where another structure may be better

High-risk businesses (e.g., construction, manufacturing) due to unlimited personal liability.
Startups planning to raise venture capital or angel investment.
Foreigners who do not have a local representative or an EntrePass.
Highly profitable businesses, as the 17% corporate tax rate of a Pte Ltd is lower than the top 24% personal tax rate.

Advantages

+Easy and inexpensive to set up with an ACRA fee of just SGD 115 for the first year.
+Minimal compliance requirements (no annual returns, no statutory audit, no corporate tax filings).
+Complete control over all business decisions without needing board or shareholder approval.
+Easy to close down by simply filing a cessation of business with ACRA.
+Profits are taxed at personal income tax rates, which can be highly advantageous for lower income brackets (the first SGD 20,000 is tax-free).

Disadvantages

-Unlimited personal liability, meaning your personal assets are at risk if the business incurs debts or is sued.
-Not a separate legal entity from its owner.
-Harder to raise capital since you cannot issue shares or bring in equity investors.
-Business continuity ends with the owner's death, bankruptcy, or retirement.
-Significant hurdles for foreigners, who must appoint a local authorized representative and usually need an EntrePass to operate.

Formation Steps

Step 1: Ensure eligibility (Singapore Citizen, PR, or EntrePass holder; foreigners residing overseas must appoint a local authorized representative).

Step 2: Choose a business name and check its availability on ACRA's BizFile+ portal.

Step 3: Apply for the business name (SGD 15 fee) and wait for approval, which is usually instant.

Step 4: Specify the principal place of business (using a residential address under the Home Office Scheme requires prior HDB or URA approval).

Step 5: Register the Sole Proprietorship on BizFile+ using Singpass and pay the registration fee (SGD 100 for 1 year).

Step 6: Obtain the Business Profile and Unique Entity Number (UEN) from ACRA upon successful registration.

Step 7: Open a corporate bank account using the newly issued UEN and Business Profile.

Step 8: Apply for any necessary industry-specific business licenses or permits via the GoBusiness portal.

Cost Breakdown

Detailed breakdown of formation and ongoing costs

Item	Type	Amount
Name Application Fee (ACRA)	One-time	$11
First-Year Registration Fee (ACRA)	One-time	$74
Annual Renewal Fee (ACRA)	Annual	$22
Virtual Office / Registered Address	Annual	$120
First year total		$205
Annual ongoing		$142

Real-World Examples

Typical use cases for this entity type

A freelance graphic designer operating under a registered business name to issue professional invoices and build a brand.
A local hawker stall owner running a food and beverage business in a neighborhood food center.
An independent marketing consultant providing services to local SMEs while keeping administrative overhead low.

Common Mistakes

Pitfalls to avoid during setup and operations

Failing to renew the ACRA registration before it expires, leading to late penalties.
Mixing personal and business finances, making tax reporting difficult and inaccurate.
Assuming they are protected from business debts and lawsuits, ignoring unlimited liability.
Forgetting to register for GST once the annual taxable turnover exceeds SGD 1 million.
Not obtaining HDB or URA approval before using a residential address as a business address.

Other entity types

Other formation options in Singapore

Private Limited Company (Pte. Ltd.)

Primary

Tax: 17.0%
Formation: $235

Exempt Private Company (EPC)

Tax: 17.0%
Formation: $245

Limited Liability Partnership (LLP)

Tax: 0.0%
Formation: $90

Branch Office

Tax: 17.0%
Formation: $245

Representative Office

Tax: 17.0%
Formation: $148

Limited Partnership (LP)

Tax: 0.0%
Formation: $85

Compare with Other Countries

Country / Type	Tax	Formation	Annual
🇸🇬 Sole Proprietorship(Sole Proprietorship)	0.0%	$89	$23

🇸🇬 vs 🇺🇸 United States 🇸🇬 vs 🇪🇪 Estonia 🇸🇬 vs 🇬🇧 United Kingdom 🇸🇬 vs 🇮🇪 Ireland All comparisons →

FAQ

Can a foreigner set up a sole proprietorship in Singapore?

Yes, but a foreigner residing overseas must appoint a local authorized representative. Foreigners residing in Singapore need an appropriate work pass (like an EntrePass) and approval from the Ministry of Manpower (MOM).

Do I need to pay corporate tax?

No, a sole proprietorship is not a separate legal entity. All profits are treated as your personal income and taxed at progressive personal income tax rates (0% to 24%).

What is the minimum capital required?

There is no minimum paid-up capital requirement to start a sole proprietorship in Singapore.

Do I need to audit my accounts?

No, sole proprietorships are exempt from statutory audits and do not need to file annual financial statements with ACRA.

How often must I renew my registration?

Registration must be renewed before it expires, typically every 1 or 3 years. The renewal fee is SGD 30 for 1 year or SGD 90 for 3 years.

Can I hire employees?

Yes, you can hire both local and foreign employees. However, you must comply with Ministry of Manpower regulations, obtain necessary work passes for foreigners, and pay CPF contributions for local employees.

Can I convert my sole proprietorship to a Private Limited (Pte Ltd) company later?

Yes. You can incorporate a new Pte Ltd company, transfer your business assets and contracts to the new company, and then formally terminate the sole proprietorship.

Do I need a separate bank account?

While not legally required since the business and owner are the same entity, it is highly recommended to open a separate corporate bank account to keep personal and business finances distinct.

Detailed Tax Rates

Corporate Income Tax

From	To	Rate

A sole proprietorship is not a separate legal entity in Singapore. All business profits are taxed at the owner's personal income tax rates rather than corporate tax rates.

Personal Income Tax (Top rate: 24.0%)

From	To	Rate
$0	$20,000	0.0%
$20,000	$30,000	2.0%
$30,000	$40,000	3.5%
$40,000	$80,000	7.0%
$80,000	$120,000	11.5%
$120,000	$160,000	15.0%
$160,000	$200,000	18.0%
$200,000	$240,000	19.0%
$240,000	$280,000	19.5%
$280,000	$320,000	20.0%
$320,000	$500,000	22.0%
$500,000	$1,000,000	23.0%
$1,000,000	No limit	24.0%

Singapore applies a progressive personal income tax rate for tax residents, capped at 24% for income above SGD 1,000,000. Non-residents are generally taxed at a flat rate of 24%.

Capital Gains Tax

0.0%

Singapore generally does not impose a capital gains tax. However, gains from the sale of property or shares may be taxable if IRAS determines the individual is trading in them.

VAT / GST

9.0%

Registration Threshold: SGD1,000,000

Foreign businesses must register for GST if their global turnover exceeds SGD 1 million and their B2C supplies of digital services or low-value goods to Singapore exceed SGD 100,000.

Withholding Tax

Dividends0.0%

Royalties10.0%

Interest15.0%

Singapore has an extensive network of Double Tax Agreements (DTAs) that can reduce withholding tax rates on royalties and interest. Dividends are generally exempt under the one-tier corporate tax system.

Payroll & Social Security

Employer17.0%

Employee20.0%

CPF contributions are mandatory for Singapore Citizens and Permanent Residents. For employees aged 55 and below, the employer contributes 17% and the employee 20%, subject to an Ordinary Wage ceiling of SGD 8,000 per month in 2026.

Other Taxes

Property Tax

Progressive tax rates apply to the Annual Value of properties. Owner-occupied residential properties have lower rates compared to non-owner-occupied or commercial properties.

Stamp Duty

Payable on documents related to immovable property, leases, and shares. Buyer's Stamp Duty (BSD) applies to property purchases, with rates up to 6% for residential properties.

Incentives & Support

Productivity Solutions Grant (PSG)

Financial support for businesses to adopt IT solutions and equipment to enhance business processes.

Up to 50% funding support for qualifying costs.

Eligibility: Registered and operating in Singapore with at least 30% local shareholding (Singapore Citizen or PR).

Formation Requirements

Minimum Capital

No requirement

There is no minimum paid-up capital requirement for a sole proprietorship in Singapore.

Local Director

Not Required

A local authorized representative is required only if the owner is a foreigner residing overseas.

Registered Office

Required

Virtual office allowed. $120 - $300 per year

Notarization Required

Power of Attorney (Remote)

Required

Foreigners must engage a registered corporate service provider to submit the application on their behalf via BizFile+.

Timeline

Standard: 1-2 business days days

Expedited: Same day (approx. 15 minutes) days ($0)

Required Documents

1Approved business name via BizFile+
2Description of primary and secondary business activities
3Local registered business address
4Copy of owner's Passport or Singapore ID
5Declaration of compliance and Statement of Non-Disqualification

Compliance & Reporting

Annual Filings

Annual Renewal of Business Registration (ACRA)

Penalty: Late renewal penalty of SGD 50 within the first 3 months, or SGD 200 if filed more than 3 months after the due date.

Before the expiry date (1 or 3 years from registration)

Personal Income Tax Return (IRAS)

Penalty: Late filing fee of up to SGD 1,000 and potential court summons.

April 18 (e-filing)

Audit Requirement

Not Required

Sole proprietorships are completely exempt from statutory annual audits.

Accounting Standard

SFRS (Singapore Financial Reporting Standards) / Basic Bookkeeping

Tax Return Deadline

April 18 (for e-filing via IRAS)

VAT Filing Frequency

Quarterly (if GST registered)

Data Protection

Must comply with the Personal Data Protection Act (PDPA) regarding the collection and use of personal data.

Banking & Payments

DBS Bank

Singapore's largest bank, offering robust traditional banking services and local branch access.

OCBC Bank

Excellent digital business banking platform with strong regional presence in Asia.

Aspire

Remote-friendly

A popular all-in-one finance operating system for modern businesses in Southeast Asia.

Wise

Remote-friendly

Ideal for multi-currency accounts and low-cost international transfers.

Payment Gateways

Stripe, PayPal, HitPay, Adyen, 2Checkout

Currency

SGD

Multi-Currency: Supported

Account Opening

Opening a traditional bank account usually requires an in-person visit or a meeting with a local branch manager. However, fintech solutions like Aspire and Wise allow fully remote account opening for registered businesses.

Practical Information

Timezone

UTC+8

Business Language

English

Legal System

Common law

Ease of Doing Business

IP Protection

Singapore offers world-class intellectual property protection, consistently ranking top in Asia for IP rights enforcement.

Double Tax Treaties

98 countries

Notable treaties: United Kingdom, China, Japan, Australia, Germany, India

Visa & Residency Options

EntrePass

A work pass for eligible foreign entrepreneurs wanting to start and operate a new business in Singapore.

Overseas Networks & Expertise Pass (ONE Pass)

A personalized pass for top talent in business, arts, and culture, allowing them to concurrently start, operate, and work for multiple companies.