Sole proprietorship
Learn what a sole proprietorship is in Singapore, how to register one, and what taxes you'll pay.
Published Wednesday 30 September 2026
Table of contents
Key takeaways
- A sole proprietorship is a business owned by one person that isn't a separate legal entity, so you're personally liable for its debts
- You register with the Accounting and Corporate Regulatory Authority (ACRA) for S$115 (one year), unless you trade under your full National Registration Identity Card (NRIC) name
- Your profit is taxed at personal rates of 0%–24%, and you report it to the Inland Revenue Authority of Singapore (IRAS) on Form B
- A private limited company costs more to set up, but it pays a flat 17% corporate tax rate and keeps business debts separate from you
What is a sole proprietorship?
A sole proprietorship is a business owned and run by one person, with no legal separation between the owner and the business. You keep the profit, and you're personally responsible for all business debts and losses, as ACRA's guide to choosing a business structure explains.
Say you're a freelance graphic designer who takes on logo and branding projects. As a sole proprietor, you sign client contracts and own equipment in your own name, then report the year's profit on your personal tax return.
Who can register a sole proprietorship in Singapore
Most people living in Singapore can register a sole proprietorship themselves online. To register as a local owner, you must:
- be 18 years or older
- be a Singapore citizen, Singapore permanent resident or eligible Foreign Identification Number (FIN) holder
You'll also need Singpass to log in to Bizfile, ACRA's online filing portal. If you're a foreigner living overseas, a corporate service provider has to register for you. You'll also need at least one authorised representative who meets local residency requirements.
You can skip registration if you trade using only your full NRIC name, according to ACRA's registration requirements. Any other name, such as your name plus the word “Design”, has to be registered before you start trading.
Advantages of a sole proprietorship
A sole proprietorship suits many freelancers and first-time owners because it's cheap to start and simple to run. Here's what works in your favour.
Low set-up cost
Registering a sole proprietorship for one year costs S$200 less than incorporating a company. Many owners also run a home-based business at first, which keeps rent off the budget while the idea proves itself.
Simple tax reporting
Your business profit is added to any other income and reported on one personal tax return each year. There's no separate corporate tax return to prepare, and smaller businesses can use a shorter statement format.
Full control
You make every decision yourself, with no board or shareholders to consult. That lets you change prices, take on new clients or shift direction as soon as you're ready.
Keep all profits
After tax, all the profit is yours. You can reinvest it in the business or draw it as income whenever you choose.
Fewer filing obligations than a company
Companies file annual returns and financial statements with ACRA. Sole proprietorships don't, so your yearly ACRA admin is mostly renewing your registration on time.
Disadvantages of a sole proprietorship
The simplicity that makes a sole proprietorship easy to start also brings some risks. Weigh these before you register.
Unlimited personal liability
You and the business are the same legal person, so creditors can claim your personal savings or property to cover business debts. Insurance, covered later in this guide, helps reduce that risk.
Harder to raise capital
You can't sell shares, so funding usually comes from your savings or a loan. Some banks and investors also prefer to deal with companies, which have their own legal identity.
Higher tax at higher incomes
Your profit is taxed at personal rates that reach 24%, while companies pay a flat 17%. As your profit climbs into the higher brackets, a company structure can leave you with more after tax.
No business continuity
A sole proprietorship has no existence apart from its owner. If you stop working, the registration ends with you, which makes succession planning harder.
How to register a sole proprietorship in Singapore
You can register your business online through Bizfile in seven steps. Follow them in this order:
- Check that you meet the eligibility requirements, or engage a corporate service provider if you live overseas
- Search for and reserve your business name on Bizfile
- Get Home Office Scheme approval from the Housing & Development Board (HDB) or the Urban Redevelopment Authority (URA) if you'll use your home address
- Submit your registration on Bizfile and pay the registration fee
- Receive your Unique Entity Number (UEN), which identifies your business when you deal with government agencies
- Check on GoBusiness Licensing whether your business activity needs a licence before you start trading
- Register for Goods and Services Tax (GST) if your taxable turnover will pass the compulsory threshold
Sole proprietorship registration fees and renewal
Setting up costs a S$15 name application fee plus a registration fee of S$100 for one year or S$160 for three years. That's S$115 or S$175 in total. ACRA's registration guide notes the three-year option depends on conditions set by the Central Provident Fund (CPF) Board.
Most registrations are approved soon after payment, while complex ones can take up to 15 working days. Once approved, your registration lasts for the period you paid for.
You can renew on Bizfile up to 60 days before your registration expires, for S$30 (one year) or S$90 (three years). Registering on time keeps you compliant with the Business Names Registration Act 2014. Under section 35, not registering when you should can lead to a fine of up to S$10,000 or up to two years' imprisonment.
Sole proprietorship tax obligations in Singapore
As a sole proprietor, you pay tax as an individual, because IRAS treats your business profit as part of your personal income. Plan for these obligations each year.
Income tax
Tax residents pay progressive rates of 0%–24%, according to IRAS individual income tax rates. The first S$20,000 of chargeable income is taxed at 0%, and the 24% rate applies only above S$1 million.
There's no personal income tax rebate for Year of Assessment (YA) 2026; the one-off rebates covered YA 2024 and YA 2025 only.
Filing Form B
You report your business income on Form B each year. E-filing typically runs between 1 March and 18 April, as set out in the IRAS filing responsibilities for self-employed persons. If your revenue is S$200,000 or less, you can use a 2-line statement; above that, you'll need a 4-line statement (IRAS guide to calculating business income).
Keeping records
IRAS requires you to keep full and accurate records of all business transactions for at least five years. Good small business accounting habits, such as saving receipts as you go, make deductions easier to claim. Deductible business expenses can include software subscriptions and business travel.
MediSave contributions
If your net trade income is more than S$6,000 a year, you must make compulsory MediSave contributions once IRAS sends you a notice of computation. Voluntary CPF top-ups may also qualify for tax relief.
GST
You must register for GST once your taxable turnover exceeds S$1 million. IRAS checks this on a retrospective basis (the past calendar year) and a prospective basis (the next 12 months). Once registered, you charge the current GST rate of 9% on your taxable sales.
When your turnover gets close, plan ahead to register for GST with IRAS.
Sole proprietorship vs private limited company
Many owners start as a sole proprietor and later set up a private limited company (Pte Ltd) as the business grows. Comparing business structures side by side helps you pick the right time. Compared with a Pte Ltd, a sole proprietorship:
- shares your legal identity, while a company is a separate legal entity
- leaves you personally liable for business debts, while a company's debts generally stay with the company
- costs S$115 to register for one year, compared with S$315 to incorporate a company
- taxes profit at personal rates of 0%–24%, while a company pays a flat 17%, reduced by the partial tax exemption or start-up tax exemption
- mainly needs a registration renewal with ACRA, while a company files annual returns and financial statements
For YA 2026, companies also get a 50% corporate income tax rebate capped at S$40,000, according to IRAS corporate income tax rates.
When to consider a private limited company
A company may suit you once your profit sits in the higher personal tax brackets, or when you want to limit personal liability or bring in investors. To make the move, you incorporate a new company and transfer the business across, because a sole proprietorship can't convert directly. The new company may still qualify for the start-up tax exemption.
Legal considerations and insurance
Some business activities need a licence before you trade. Search GoBusiness Licensing, the government's licensing portal, to see which licences apply to your activity.
Insurance matters more for a sole proprietor, because your personal assets are exposed to business claims. Policies to consider include:
- public liability insurance, which covers claims from third parties injured or affected by your business
- professional indemnity insurance, which covers claims that your advice or services caused a client a loss
- business property insurance, which covers your equipment, stock and premises against damage or theft
- personal accident insurance, which pays out if an injury stops you from working
Simplify your sole proprietorship finances with Xero
As a sole proprietor, you're the one doing the books, so every hour saved on admin is an hour back for clients. Xero brings in your transactions through bank feeds and lets you create and send invoices. You can track GST once you're registered and see real-time reports on your profit.
With everything in one place, preparing Form B takes less effort. Sign up today to get one month free and see how much time you win back.
FAQs on sole proprietorship
Here are answers to common questions from Singapore sole proprietors.
Can a sole proprietor change owner?
A change of owner is handled by closing the existing registration, with the new owner registering a new business. Closing a sole proprietorship on Bizfile is free and takes effect immediately, but you can't reverse it once ACRA approves it.
Can a foreigner register a sole proprietorship in Singapore?
Yes, if you're 18 or older and meet ACRA's requirements. If you live in Singapore on a FIN, check with the Ministry of Manpower that your pass lets you run a business.
Can a company own a sole proprietorship?
Yes, ACRA's business structure rules allow a company or a limited liability partnership to own a sole proprietorship, as well as an individual.
Do I need a separate business bank account?
It isn't a legal requirement for sole proprietors, but it's widely recommended. Keeping business and personal spending apart makes your records cleaner and your Form B easier to prepare.
Can a sole proprietor hire employees?
Yes, you can hire staff as a sole proprietor. You'll need to make CPF contributions for eligible employees, just like any other employer.
Related terms
Learn more about sole proprietorship
Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.
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