A Private Limited Company (Pte. Ltd.) is one of the most common and preferred types of business structures in Singapore, as it operates as a separate legal entity from its owners. This means the company can engage in contracts, own assets, incur liabilities, and even sue or be sued independently of the entities that manage or hold shares in it.
Should you plan to start a business in Singapore with a Pte. Ltd. structure, it’s crucial to understand how it works. Knowing the requirements, responsibilities, and compliance obligations will help you register your company smoothly and ensure that you remain fully compliant with Singapore’s regulations.
Pte. Ltd. Explained: What It Means for Your Businesses
In Singapore, companies registered as Pte. Ltd. fall under two key categories: Exempt Private Companies (EPCs) and Private Companies Limited by Shares. Both structures require an issued share capital and provide limited liability protection, meaning shareholders are only responsible for the company’s debts up to the amount they have invested, keeping personal assets protected.
Differentiating the Different Types of Private Limited Companies in Singapore
While both Private Companies Limited by Shares and Exempt Private Company fall under the Pte. Ltd. umbrella and offer limited liability, they have their share of differences, including:
Private Companies Limited by Shares
A private company limited by shares is the most commonly used structure by SMEs and foreign companies establishing a presence in Singapore. These types of private companies have up to 50 shareholders, which can be individuals or corporations.
This structure is especially attractive to foreign investors because liabilities incurred by the Singapore entity do not extend to the foreign parent company. These companies are also eligible for Singapore corporate tax incentives.
Exempt Private Companies (EPCs)
An Exempt Private Company (EPC) is a form of private limited company suitable for SMEs and start-ups that prefer a simple business structure and tax efficiency. The shareholders for these types of businesses are limited to a maximum of 20 members and should only be individuals, not corporate shareholders.
Businesses with this structure face fewer regulatory burdens and are often exempt from audit requirements if they qualify as a “small company,” making them easier and more cost-effective to manage.
Why Choose a Pte. Ltd. Over Other Business Structures?
There are many reasons why entrepreneurs choose to register their businesses as private limited companies. Some of the benefits include:
1. Attractive Corporate Tax Benefits
Limited companies in Singapore benefit from competitive and business-friendly tax incentives. Newly incorporated companies that meet specific criteria may qualify for the Start-Up Tax Exemption (SUTE) Scheme, which provides a 75% tax exemption on the first S$100,000 of normal chargeable income, then a 50% tax exemption on the next S$100,000. This is applicable for the first three Years of Assessment.
Singapore’s single-tier tax system also ensures that dividends paid to shareholders are tax-free, as profits are taxed only at the corporate level. The prevailing corporate tax rate remains capped at 17%.
In addition, qualifying companies may benefit from Corporate Income Tax rebates, helping to offset operating costs.
2. Perpetual Succession and Continuity
Ownership in a Pte. Ltd. company can easily be transferred by selling or issuing shares, allowing shareholders to exit partially or entirely without disrupting business operations or requiring complex restructuring.
This can especially be useful during shareholder disputes, succession planning, or when bringing in new investors. It also enhances the company’s attractiveness to potential investors, as entry and exit are straightforward and legally structured.
3. Easier Access to Capital & Investments
A private limited company has greater flexibility when it comes to raising funds. It can issue new shares, bring in additional investors, or partially transfer ownership without disrupting business operations. Existing shareholders can also safeguard their interests through mechanisms such as pre-emption rights or different share classes, allowing control over voting rights and dividend entitlements.
What’s the Difference Between Pte. Ltd. and Sole Proprietorship?
A sole proprietorship is another fast and simple way to start a business, as it only requires a single individual to own and manage a business, giving them full control over all decisions and day-to-day operations. However, unlike a Pte. Ltd., a sole proprietorship does not have a separate legal identity from its owner, meaning the business and the owner are treated as the same entity under the law.
As such, the owner is personally responsible for all business debts, liabilities, and legal obligations. In contrast, a Private Limited Company (Pte. Ltd.) exists as a separate legal entity, offering limited liability protection and clearer separation between personal and business assets.
When sole proprietorships grow, entrepreneurs may consider switching to a Pte. Ltd business structure. If you are interested in doing so, check out our guide on the benefits of switching from sole proprietorship to a private limited company.
How You Can Get Started with a Pte. Ltd. in Singapore
To set up a Pte. Ltd in Singapore, it requires the following:
Step 1: Choose a Business Address
When registering your private limited company with ACRA, you must provide a registered office address in Singapore, which will be where all official correspondence and notices will be sent.
All companies and LLPs are required to ensure that their registered office:
- Is located in Singapore
- Is open and accessible to the public for at least three hours during normal business hours on each business day
The registered address does not have to be the company’s actual place of operations, making virtual office solutions a viable option for many businesses.
Step 2: Appoint a Shareholder and Local Director
To incorporate a Pte. Ltd., you must appoint:
- At least one shareholder, who can be an individual or a corporation
- At least one local director who is:
- A Singapore Citizen
- A Singapore Permanent Resident
- An EntrePass holder
- An Employment Pass (EP) holder
All directors and shareholders must be at least 18 years old.
If a director is an EP holder, a Letter of Consent (LOC) from the Ministry of Manpower may be required before appointment.
Additionally, foreign shareholders are generally required to engage a registered filing agent to assist with the incorporation process.
Step 3: Appoint a Data Protection Officer (DPO)
Under Singapore’s Personal Data Protection Act (PDPA), appointing a Data Protection Officer (DPO) and making their contact information publicly available are mandatory. The role of the DPO is to ensure the company complies with PDPA obligations.
Key points to note:
- The DPO does not need to be a Singapore citizen or resident
- The DPO does not need to hold an Employment Pass
- The role may be outsourced or assigned to an existing staff member
Step 4: Register a Business Name
You must register a unique business name through ACRA’s BizFile+ system.
- The application fee is S$15
- Names are usually approved immediately if there are no conflicts
- If review by referral authorities is required, approval may take 14 to 60 days
- Once approved, the name is reserved for 120 days
Upon successful incorporation, your company will be issued a Unique Entity Number (UEN), which will be used for all transactions with government agencies.
Step 5: Register a Corppass Administrator
After incorporation, your company must register for Corppass, Singapore’s corporate digital identity system used to access government e-services.
Each company may appoint up to two Corppass Administrators, who can:
- Manage user access to government digital services
- Assign and customise service permissions
- Authorise third-party service providers to act on the company’s behalf
Step 6: Open a Corporate Bank Account
Opening a corporate bank account is strongly recommended to keep business and personal finances separate and to facilitate proper accounting and tax reporting.
Most banks require:
- Physical presence of account signatories and majority directors in Singapore (some banks may allow overseas signing or notarisation)
Common supporting documents include:
- Completed corporate account opening forms
- Board resolution approving the account and signatories
- Certified true copy of the Certificate of Incorporation
- Certified true copy of the company’s Business Profile from ACRA
- Certified true copy of the company’s Constitution
- Certified true copies of identification and proof of address for directors, signatories, and ultimate beneficial owners
- Documents are typically certified by the company secretary or a director.
Step 7: Filing Annual Returns (ACRA)
Once incorporated, your company must meet ongoing tax and filing obligations with ACRA and IRAS.
Estimated Chargeable Income (ECI)
This is the estimate of your company’s taxable income and must generally be filed within three months from the end of your financial year. New companies may not receive an ECI notice in their first year of incorporation, but may still be required to file if accounts are closed within that year, unless exempted.
Corporate Income Tax Returns
Your company must file one of the following annually:
- Form C-S (Lite) – for companies with revenue of S$200,000 or below
- Form C-S – for companies with revenue of S$5 million or below
- Form C – for all other companies
These filings declare your company’s actual taxable income for the Year of Assessment.
Step 8: Annual General Meeting (AGM)
An Annual General Meeting (AGM) allows a company to present its financial statements to shareholders. This gives shareholders the avenue to review the company’s performance and raise questions about its financial health and operations.
In Singapore, AGM requirements vary depending on the type of company. Since private limited companies are considered non-listed companies, they must hold an AGM within six months after the FYE and file their annual return within seven months after the FYE.
Failure to comply with AGM requirements can result in fines, regulatory penalties, and potential disqualification or debarment of directors. Ensuring timely compliance is therefore essential to maintaining good corporate governance and avoiding legal consequences.
Let Our Experts at AG Handle the Incorporation of Your Private Limited Company
Incorporating a Pte. Ltd. in Singapore involves multiple steps, regulatory requirements, and ongoing obligations. Should you need assistance during the process, AG has company incorporation services that help you throughout the process. We can assist you with the provision of a company-registered address, opening a bank account, being a nominee director, and more.
Our experts ensure your company is incorporated accurately, efficiently, and fully in compliance with ACRA and IRAS regulations, so you can focus on growing your business with confidence.
We are also a trusted mid-tier accounting firm, so you can also rely on us to manage your financial reporting, bookkeeping, and tax matters. By working with us, you can have peace of mind in running your business operations and ensure a strong foundation for long-term growth.
