The Republic of Singapore is a Commonwealth country located at the tip of the Malaysian peninsula and occupying an area of 622 square kilometres. Singapore was formerly part of Malaysia which gained independence from Britain in 1957. Eight years later in 1965, Singapore became a separate sovereign state. Because of its close past connections with Britain, the business language remains English and the English common law system applies.
Local currency is the Singapore Dollar and there is an excellent professional infrastructure with excellent legal services. Most of the large accountancy firms have offices in Singapore as do most of the major international banks.
Communications are excellent, with state of the art telecommunications equipment and an airport which serves as a regional hub for over 100 destinations.
THE SINGAPORE LLP
The LLP was created by the Limited Liability Partnerships Act 2005. The essential feature of a limited liability partnership ("LLP") is that it combines the organisational flexibility and tax status of a partnership with limited liability for its members.
The LLP can do anything that a natural person could do. It has the ability to enter into contracts, own assets and will continue in existence in spite of any change in membership. Its existence as a separate legal entity makes it more closely akin to a company than to a partnership. The concept is similar to that of the US Limited Liability
Corporation, a US legal entity which is not generally subject to US taxation. As it is a partnership no tax is assessed on the LLP but profits are only taxed in the hands of the partners. If the LLP does not trade in Singapore or derive income from Singapore, no Singapore tax will be payable by a non-resident partner. This makes it possible to create Singapore structure which is not liable to Singapore tax. Provided that the trading activities take place entirely outside of Singapore, the profits are generated from a non-Singapore source and the profits are not remitted back to Singapore.
THE LLP HAS THE FOLLOWING CHARACTERISTICS:
For the purposes of Singapore tax legislation, a trade, profession or business carried on by an LLP with a view to profit, is treated as carried on in partnership by its members (and not by the LLP).
The LLP is tax transparent. Its profits belong to its members. Furthermore, if they are not Singapore resident and the LLP does not have Singapore sourced income (and this income is not remitted back to Singapore), the LLP should not be subject to any Singapore tax. It is possible for two offshore companies to be the members of an LLP.
There must a minimum of two partners who may be individuals or corporations.
Every member of an LLP will be an agent of the partnership and (with limited exceptions) capable of binding the LLP.
Details of the individual members must be filed with the Accounting & Corporate Regulatory Authority (“ACRA”). If the members wish to remain confidential we can assist with the incorporation of International Business Companies with a high level of confidentiality to act as the registered member instead.
The LLP is required to keep accounting and other records which explain its transactions and financial position. It is also required to prepare profit and loss accounts and balance sheets. These documents need not be lodged with Accounting & Corporate Regulatory Authority ("ACRA"). The LLP must retain the accounting records for five years.
The liability of members will be limited to the amount of capital that they agree to contribute to the partnership. There is no minimum capital contribution.
Except as provided in the LLP Act or in regulations made under the Act, the mutual rights and duties of an LLP and its members are governed by a Partnership Agreement. The Partnership Agreement is not filed at the Registry and is not open for public inspection. In the absence of a Partnership Agreement the default provisions under the First Schedule of the LLP Act will apply.
Incorporation of a new LLP can take up 1 – 2 working days; ready-made partnerships are not generally available.
RESTRICTIONS ON NAME AND ACTIVITY
The Registrar has the power to refuse registration of any name, which he considers undesirable or too similar to an existing name.
The LLP must maintain a registered office in Singapore and a local manger must be appointed who is an individual ordinarily resident in Singapore. The local manager has the responsibility for certain statutory functions, namely the filing of annual solvency declarations and other documents with ACRA in Singapore.
Every LLP shall ensure that its invoices and official correspondence bear the name of the LLP, the registration number and a statement that it is registered with limited liability.