Singapore has for years been a great destination for operating an offshore business. It is commonly referred as the meeting point between the west and east because everybody can come and run a business profitably.
To enter and do business in Singapore, the first step is picking the right business entity. Here are the main business formations to register and operate in Hong Kong.
Limited liability Company
This is a company whose shareholders are less than 50 persons. Most businesses in Singapore are private limited liability companies because they are easy to form and run. It is also considered the best formation for serious people because decision making is easy and even resources mobilization can be personalized.
Whether you already have an existing company and want to expand to Singapore or at the start up, the limited liability company is a separate legal entity and ideal for protecting personal assets. Besides, your contribution to the company is limited to your shareholding.
Public limited company
Unlike the limited liability company that limits the shareholding to only a few members, a public limited company is open to the public.
The minimum shareholder for a public limited liability company is 50 and is traded on the stock market. Forming a public limited company is very complex and requires a lot of authorization. It is advisable to first operate as a limited liability company before going public.
Though this is one of the simplest formations in Singapore, it comes with a lot of risks. Because the entity is not a separate entity like the case of a limited liability company, you and the business are the same.
In case something goes wrong, the creditors can come after personal assets. This raises the involved risks with a very big margin. It is, therefore, not recommended when entering Singapore to do business.
Partnership means that you join hands to form a business to address issues related to limited expansion from sole proprietorship.
The main issue with the partnership is that it lacks legal existence that can separate it from the partners. This means that the business will cease operations in case of death, incapacity, insolvency, or retirement of members.