Setting up a business in Singapore is widely regarded as one of the most efficient and transparent processes in the world. Among the various business structures available, the Limited Liability Partnership (LLP) is a popular choice for professionals, small teams, and partnerships that want operational flexibility while enjoying limited liability protection.
This guide explains how to set up an LLP in Singapore, who it is suitable for, the legal requirements, and the ongoing compliance obligations you should be aware of.
What Is an LLP in Singapore?
A Limited Liability Partnership (LLP) is a business structure that combines the operational flexibility of a partnership with the limited liability protection of a company.
In Singapore, LLPs are governed by the Limited Liability Partnerships Act and are regulated by Accounting and Corporate Regulatory Authority (ACRA).
An LLP is considered a separate legal entity, meaning:
- It can own property in its own name
- It can enter into contracts
- It can sue or be sued independently of its partners
Each partner’s liability is generally limited to their agreed contribution, except in cases of personal negligence or wrongful acts.
Who Should Consider Setting Up an LLP?
An LLP structure is particularly suitable for:
- Professional firms (e.g. consultants, designers, trainers)
- Small business owners operating with partners
- Family-run businesses
- Joint ventures that do not require a full company structure
- Businesses that want profit-sharing flexibility
Unlike private limited companies, LLPs do not require:
- Share capital
- Directors
- Shareholders
- Annual General Meetings (AGMs)
This makes LLPs appealing for founders who prefer simplicity.
Key Requirements to Set Up an LLP in Singapore
Before proceeding with registration, you must ensure the following criteria are met:
1. Minimum Number of Partners
An LLP must have at least two partners at all times. Partners can be:
- Individuals (local or foreign)
- Companies registered in Singapore or overseas
There is no maximum limit on the number of partners.
2. At Least One Local Manager
Every LLP must appoint at least one manager who:
- Is at least 18 years old
- Is ordinarily resident in Singapore (Singapore Citizen, PR, or EP holder)
The manager is responsible for compliance matters and filings with ACRA.
3. Registered Address in Singapore
Your LLP must have a local registered office address in Singapore.
P.O. Boxes are not allowed.
Step-by-Step Guide to Setting Up an LLP in Singapore
Step 1: Choose and Reserve an LLP Name
The LLP name must:
- Be unique and not identical to existing entities
- Not infringe on trademarks
- Not contain prohibited or sensitive words
Name approval is done via ACRA’s BizFile+ system and is usually instant unless referral to another authority is required.
Once approved, the name is reserved for 120 days.
Step 2: Decide on the Business Activities
You must select your business activities using the Singapore Standard Industrial Classification (SSIC) codes.
Choosing the correct SSIC codes is important because:
- It affects licensing requirements
- It impacts banking and compliance reviews
- It determines regulatory oversight
Step 3: Prepare Partner and Manager Details
You will need the following information for each partner and manager:
- Full name
- Identification details (NRIC / Passport)
- Residential address
- Nationality
- Percentage or terms of partnership (internal agreement)
While a written LLP agreement is not mandatory, it is strongly recommended to define:
- Profit and loss sharing
- Decision-making authority
- Admission or exit of partners
- Dispute resolution
Step 4: Register the LLP with ACRA
Once all information is ready, you can proceed to register the LLP with Accounting and Corporate Regulatory Authority.
The registration fee is relatively low, and upon successful filing:
- Your LLP will receive a Unique Entity Number (UEN)
- The LLP is legally incorporated
In most cases, incorporation is completed within the same day.
Step 5: Open a Corporate Bank Account
After incorporation, the LLP can open a corporate bank account with Singapore banks.
Banks typically require:
- LLP BizProfile
- Identification documents of partners and manager
- Proof of business activities
- In-person verification (especially if foreign partners are involved)
Some banks may conduct enhanced due diligence depending on the business nature.
Do Foreigners Need a Work Pass to Run an LLP?
Yes. Foreign partners who wish to actively work in Singapore must obtain a valid work pass, such as:
- Employment Pass (EP)
- EntrePass (in specific cases)
Simply being a partner does not automatically grant the right to work in Singapore.
Ongoing Compliance Obligations for LLPs
Although LLPs are simpler than companies, they still have ongoing obligations.
1. Annual Declaration
Every LLP must file an Annual Declaration with ACRA confirming:
- Whether the LLP is solvent or insolvent
- That business details are up to date
Failure to file may result in penalties.
2. Accounting and Record Keeping
LLPs must:
- Maintain proper accounting records
- Keep records for at least 5 years
- Prepare financial statements (audit is generally not required unless stipulated)
3. Tax Filing Obligations
LLPs are tax transparent, meaning:
- The LLP itself is not taxed
- Profits are taxed at the partner level
Partners must declare their share of profits in their personal or corporate tax returns filed with Inland Revenue Authority of Singapore (IRAS).
4. GST Registration (If Applicable)
If the LLP’s taxable turnover exceeds the GST threshold, GST registration is required.
LLP vs Private Limited Company: Key Differences
| Aspect | LLP | Private Limited Company |
|---|---|---|
| Legal Entity | Yes | Yes |
| Owners | Partners | Shareholders |
| Liability | Limited (with exceptions) | Limited |
| Audit Requirement | Usually No | May be required |
| Taxation | Partner-level | Company-level |
| Compliance | Lower | Higher |
LLPs are ideal for partnerships prioritising flexibility, while companies are better suited for scalability and fundraising.
Common Mistakes When Setting Up an LLP
Some common pitfalls include:
- Not drafting an LLP agreement
- Appointing an inactive or non-resident manager
- Poor record keeping
- Ignoring tax reporting obligations
- Assuming LLPs require no compliance at all
Avoiding these mistakes helps ensure long-term business sustainability.
Can an LLP Be Converted to a Company Later?
Yes. Many businesses start as LLPs and later convert to private limited companies as they grow.
Conversion is possible but requires:
- Transfer of assets and contracts
- New company incorporation
- Closure or striking off of the LLP (if applicable)
Proper planning is essential to avoid tax or legal issues.
Why Engage a Professional Firm to Set Up an LLP?
While it is possible to register an LLP on your own, engaging a professional corporate services firm can help with:
- Name and SSIC selection
- Drafting LLP agreements
- Compliance advisory
- Work pass applications
- Ongoing accounting and tax support
This reduces errors and ensures full regulatory compliance from day one.
Final Thoughts
Setting up an LLP in Singapore is a straightforward, cost-effective, and flexible way to start a business—especially for partnerships and professional services firms.
By understanding the requirements, following the correct steps, and maintaining proper compliance, an LLP can serve as a strong foundation for long-term business success in Singapore.
If you are unsure whether an LLP or another business structure is right for you, seeking professional advice early can save time, cost, and complications later on.