For a solo founder in Singapore, the choice comes down to two structures: a sole proprietorship, where you and the business are legally the same person and you carry unlimited liability, or a private company limited by shares (Pte Ltd), which is a separate legal entity with its own director, secretary and filing obligations. A sole proprietorship costs S$115 to register for one year; incorporating a company costs S$315. Company profits are taxed at a flat 17% of chargeable income, while sole proprietorship profits are taxed at your personal income tax rates.
What a sole proprietorship means for you
A sole proprietorship in Singapore is not a separate legal entity. ACRA puts it plainly: you have unlimited liability, and you are personally responsible for all business debts and losses. If the business cannot pay, creditors come after you, not a company.
Registration has a residency condition. To register as a local sole proprietor you must be a Singapore citizen, a Singapore permanent resident, or an eligible FIN holder. Foreigners based overseas cannot simply file as a local sole proprietor: ACRA requires them to engage a corporate service provider and appoint at least one authorised representative who meets the local residency requirements.
There is one more pre-condition that catches people out. Self-employed persons must be up to date with their Medisave contributions before they reserve a business name or become a new owner of an existing business, per ACRA's business structure guidance (page updated 29 January 2026).
What a private company limited by shares requires
A private company is a separate legal person, and Singapore law attaches several fixed requirements to it, according to ACRA's page on appointing directors and other key officers:
- Shareholders. All companies must have at least one shareholder, and a private company may have 50 or fewer shareholders. One person can hold all the shares.
- Directors. All companies must have at least one director. Directors manage the company but do not always own shares. ACRA's eligibility list for directors includes being ordinarily resident and at least 18 years old. Note the wording carefully: the ACRA page we consulted lists "be ordinarily resident" as a director requirement without spelling out "at least one" director must be locally resident, so if your residency status is unusual, confirm the requirement against the Companies Act or ACRA directly.
- Company secretary. Every company must have at least one director and one company secretary, appointed within six months of registration. The secretary must be locally resident and cannot be the same person as the sole director — so a one-person company always needs a second person in an official role.
- Auditor. Unless exempt, you must appoint an auditor within three months of incorporation.
ACRA's company type page notes that most small business owners choose a private limited (Pte Ltd) company, which it describes as offering the best protection and simplicity.
How registration actually happens
Companies are registered through Bizfile after you reserve a name, and the process has one constraint worth planning around: only the person who reserved the company name can register, and that person must also be appointed as a director or secretary of the new company (ACRA, registering via Bizfile, page updated 24 September 2026). If a corporate service provider reserves the name on your behalf, work out in advance who will take the director or secretary appointment.
Costs, side by side
| Sole proprietorship | Private company limited by shares | |
|---|---|---|
| Registration fee | S$115 for one year; S$175 for three years (both include the S$15 name application fee) | S$315 (S$15 name application fee and S$300 incorporation fee) |
| Separate legal entity | No | Yes |
| Liability | Unlimited, personal | Separate from the owners |
| People required | Owner; overseas foreigners need a locally resident authorised representative and a corporate service provider | At least one shareholder, at least one director, a locally resident company secretary (not the sole director), auditor unless exempt |
| Tax | Profits taxed at the owner's personal income tax rates | Flat 17% of chargeable income |
The fee figures come from ACRA's business structure page, updated 29 January 2026. Taxes are covered below.
Tax: the one difference that is easy to state precisely
According to IRAS (page updated 7 April 2026), a company in Singapore is taxed at a flat rate of 17% of its chargeable income, and this applies to both local and foreign companies.
For a sole proprietorship, ACRA states that profits are taxed at your personal income tax rates — the business does not pay a separate corporate tax. IRAS also runs start-up and partial tax exemption schemes for companies, but the qualifying thresholds were not available in the sources used for this page, and personal income tax rates were likewise not available here. Check both directly with IRAS before modelling your own numbers.
Which one fits a solo founder?
The decision is mostly about liability and overhead rather than cost. A sole proprietorship is the lighter structure: low registration fee, no secretary, no auditor, and profits taxed once at your personal rates — but unlimited personal liability and a residency condition on who may register. A private company costs S$315 to incorporate and obliges you to appoint a locally resident company secretary who is not you, plus an auditor within three months unless exempt, but it separates business debts from your personal assets and is taxed at a flat 17%.
Two practical tests usually settle it. If clients, lenders or counterparties expect to contract with a registered company rather than an individual, or if the work carries real downside risk, the company structure is the one that matches. If the activity is small, low-risk and you already meet the Singapore citizen, permanent resident or eligible FIN holder requirement, the sole proprietorship is the cheaper way to start — and unlike a company, you can register it for one year or three.
Sources
- Step 2: Choosing a business structure | Accounting and Corporate Regulatory Authority (ACRA)
- Step 4.1: Choosing a company type | Accounting and Corporate Regulatory Authority (ACRA)
- Step 4.3: Choosing company directors & other key officers | Accounting and Corporate Regulatory Authority (ACRA)
- Step 4.6: Registering a local company via Bizfile | Accounting and Corporate Regulatory Authority (ACRA)
- IRAS | Corporate Income Tax Rates