Singapore witnesses one of the highest numbers of foreign owned companies entering the country each year. Even with several other emerging markets in the region, Singapore has always been the preferred choice by foreign entrepreneurs and most of them prefer to setup a limited liability company in Singapore. This is mainly because of the number of advantages such type of company provides as compared to the other options available to foreign companies. Some of these advantages are as follows:
1) Limited Liability: Obviously as the name suggests, all owners or shareholders have limited liability in such type of a business. Their liabilities are up to the extent of their capital investment in the company and the number of shares they own. Their own personal assets and other investments are always safeguarded against liabilities arising out of the Singapore limited liability company. Even debts or legal claims do not affect the personal assets of the shareholders and hence the limited liability advantage is the primary reason why such type of company is most popular with foreigners.
2) Separate Legal Status: A limited liability company is basically the same as a private limited company. These companies have a separate legal status from their owners. They are considered as legal entities on their own and they are allowed to buy properties in their own name, enter contracts and also act separately from their owners or parent companies. What this translates to is that these companies can pick and choose everything about themselves regardless of their owners. They can have their own company name, their own business structure and own business activities amongst others.
3) Compliance Requirements: Although a sole-proprietorship or partnership company would have simpler ongoing compliance requirements in Singapore, as far as foreign owned companies are concerned, a limited liability company is the most straightforward company to operate. The ongoing compliance requirements are relatively simple and minimal. There is only a requirement to file annual returns and annual tax returns. They are also required to maintain all financial records or books of accounts properly and updated in their offices. They also need to ensure they comply with the statutory requirements at all times. Apart from this, there are no other ongoing compliance requirements and managing this type of company is considered as quite simple.
4) Ideal Offshore Business: For foreign entrepreneurs looking at setting up a Singapore offshore company, incorporating a limited liability company is the most ideal form of business. It can be registered within a day or two without even visiting Singapore. Documentation required is minimal and they can take advantage of the pro-business policies in Singapore and its liberal taxation regime.
Bryan Wong is a business analyst in the Asia-Pacific region and in his free time writes business articles. In this article, Bryan talks about Singapore Limited Liability Company and Singapore Offshore Company.