Learn about what you need to do to become a sole proprietor in Singapore.
The island nation of Singapore is one of the strongest global economies, boasting a AAA credit rating, the world’s highest concentration of millionaires, and attractive tax benefits for foreign businesses. And the great news about that is, as a freelancer in Singapore, there’s no shortage of clients and opportunities!
We’ll walk you through everything you need to become a sole proprietor in Singapore so you can get your career off the ground. Just remember that the information here should not be used in place of legal counsel.
What is a sole proprietor in Singapore?
A sole proprietor is an individual who runs a business in their own name. They don’t have a separate legal identity and are personally responsible for all debts the business incurs.
However, it’s an excellent option for small businesses whose businesses pose little liability risk. It’s also the simplest way for freelancers to establish themselves and begin getting paid.
A sole proprietor’s net income is treated as personal income and subject to personal income tax but is not required to file annual business reporting or pay corporate business tax.
What do I need to become a sole proprietor?
To begin with, the Singapore government requires you to be at least 18 years old and a citizen, permanent resident, or have an EntrePass.
A sole proprietor must also appoint a manager who is 21 or over and is a citizen or a permanent resident. If the sole proprietor fulfills those conditions, then you can act as your own manager. Before registering your business, you must be sure your Medisave account is funded and have permission from the HDB or URA to use your residence as your place of business.
How do I register to become a sole proprietor in Singapore?
There are two parts to becoming a sole proprietor: registering a name and registering your business.
You can choose to register both simultaneously, or you can begin by reserving a business name. You’ll need to register and reserve for both of these options through the Business Filing Office of the ACRA. Alternatively, you can register through the Inland Revenue Authority’s online Startup Kit.
When you’re ready to register, you’ll need to include and upload the following:
Copy of your Singapore ID
Local residential address
Proposed (or reserved) business name
Description of your work
Local business address
When your registration is completed, you will receive all documents related to your business via email.
What taxes will I be responsible for paying as a sole proprietor?
The good news is that tax filing is extremely simple: you will just pay a personal income tax on your business income, which you can e-file by an April deadline each year.
Receiving Payments in Singapore via Liquid
Did you know that Liquid is the seamless way to receive payments in Singapore and 175+ countries worldwide? It also supports select foreign currencies, including SGD! Whether you’re sending an invoice to an existing client or one who’s new to Liquid, payments are sent via wire transfer in 2-5 business days.
Invoices in Liquid are in USD by default but can also be sent in SGD and other select foreign currencies, allowing vendors to receive payment in their local currencies instead of USD. In addition, you can also agree to Work Orders / Project Proposals in SGD and other select foreign currencies in Liquid.
Liquid only charges clients who initiate payments of $3 per US invoice paid and $8 per international invoice paid.
Liquid never charges Vendors to receive payments, even when Vendors are invoicing payments from Clients who are not current users of Liquid.
Now you’re ready to start freelancing in Singapore!
With its streamlined and expedited procedure for registering your sole proprietorship, there’s nothing standing in your way to getting started with your freelancing career. Enjoy everything Singapore has to offer, and congratulations on working for the best boss you can have – yourself!
Ready to invoice your United States-based clients? Try Liquid today.