What is Sole-Proprietorship & Partnership in Singapore

Understanding the distinction between Sole Proprietorship and Partnership and the eligibility requirements for setting up in Singapore.

Updated on
Feb 26, 2024
min read
Company Structures
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Step-by-Step Instructions

1. Understanding Sole Proprietorship

Sole proprietorship is the simplest and most straightforward business structure. It involves a single individual or company owning and operating a business. The owner assumes full responsibility for the business's debts and losses. It's important to note that a sole proprietorship is not considered a separate legal entity, meaning the owner can be held legally liable for any liabilities incurred by the business.

2. The Basics of Partnership

A partnership consists of at least two partners who jointly own and manage a business. These partners can be individuals or companies. In a partnership, each partner is personally liable for the business's financial obligations. This means that if the business incurs debts or losses, each partner is responsible for their share. It's worth mentioning that all legal proceedings related to the partnership can be initiated or defended in the names of the partners.

3. Eligibility for Setting Up a Sole Proprietorship or Partnership in Singapore

To establish a sole proprietorship or partnership in Singapore, there are certain eligibility criteria that must be met. According to Singaporean law, an individual intending to set up a sole proprietorship or partnership must be at least 18 years old. Additionally, the individual must be a Singapore citizen, permanent resident, or hold an eligible FIN (Foreign Identification Number). Self-employed individuals are also required to have their Medisave accounts topped up before registering or renewing their business, and they must keep up with regular contributions.

4. Regulations for Foreigners Intending to Register a Business in Singapore

Foreigners who are not residents of Singapore but wish to set up a business in the country have specific regulations to follow. They must appoint a locally resident authorized representative who will manage the application process. This authorized representative can be a Singapore citizen or Permanent Resident. It's important to note that if the foreigner intends to manage the business operations in Singapore, they must obtain approval from the Ministry of Manpower after the registration process.

5. Appointing an Authorized Representative

In certain cases, it becomes necessary to appoint an authorized representative for a sole proprietorship or partnership. This is required when the sole owner of a sole proprietorship or all members of a partnership reside outside Singapore. The authorized representative must be a physical person aged 18 or above, legally capable, and a resident of Singapore.


Choosing between a sole proprietorship and a partnership depends on various factors, including your business goals, the number of people involved, and your risk tolerance. A sole proprietorship allows for complete control and full entitlement to profits, but it also exposes the owner to unlimited liability. On the other hand, partnerships enable shared responsibilities and expertise, but all partners share the burden of liability.

Setting up these business structures in Singapore comes with its unique requirements, especially for foreign business owners. However, with a comprehensive understanding of the legal structures and meticulous planning, prospective entrepreneurs can make well-informed decisions that align with their business objectives and individual circumstances. It's always recommended to seek professional advice when considering such a significant business decision.

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