I'm a Freelancer, Should I Register for a Private Limited Company?

By
Writers@Aspire
Published
November 25, 2020

First things first...

What are freelancers and what do they do?


Freelancers are considered to be independent contractors who offer their services for a fee to multiple clients at a time.

Compared to full-time employees, they are:

  1. not bound by one organisation
  2. have more flexibility and freedom in terms of choosing which clients they work for
  3. offer their services as and when they are needed

Their formal relationship with their clients are usually ongoing or contractual, depending on the agreement established.


There is no singular industry to categorise freelancers in as they can be working in various different sectors. For instance, their work can range from content writing, management consultancy, photography, designing, and even real estate.

When is the right time to incorporate?



Most freelancers struggle with figuring out when the right time is to register as a company. If you are still new to the gig economy and have only been freelancing for a few months or years, you might still need some time to grow your services. However, if your business has grown at a much larger scale over the years, it may be a good time to incorporate.

Benefits of registering for a Private Limited Company for freelancers



If you’ve finally come to the decision to incorporate as a freelancer, the best business entity to incorporate as is certainly a Private Limited Company. Here are some of the benefits that you will enjoy.

1. Limited Liability


Limiting your liabilities is one of the biggest advantages of a private limited company. What this means is that your liability is only limited to the amount of money you contributed to the business—this keeps your personal assets protected.

For the case of freelancers and sole proprietors, you will be personally liable for any business debts and losses, and can even be at risk of getting sued by other companies. Registering as a private limited company will eliminate this risk and secure your personal assets at the same time.

2. Tax Benefits


Yet another advantage of incorporating a private limited company is enjoying multiple tax benefits, which includes not having to pay for personal income tax. Instead, the profits earned by the company will be taxed at corporate tax rates.

Furthermore, newly incorporated companies only need to pay their normal chargeable income for the first three years of incorporation under the Start-Up Tax Exemption (SUTE) scheme, which was introduced to support local enterprises and encourage entrepreneurship in Singapore.

3. Better Credibility For Your Business


As long as you register as a Limited Liability Company, regardless of whether it’s a Public or Private Limited Company, you will immediately gain better credibility in the eyes of potential clients and investors. This shows that you are serious in the business and are looking to grow your company.

Besides these shareholders, financial institutions and suppliers will also begin taking your business more seriously.

How do I register?


Now that you’ve discovered the benefits of shifting from a freelance business to a private limited company, you’re probably wondering how to go about registering. First, ensure that you have the key requirements needed to register a private limited company. You will need to have:


  • At least one shareholder
  • At least one director residing in Singapore, who has to be at least 18 years of age

Afterwards, you will need to register your company with ACRA and choose a company name, which will still be subjected to ACRA’s approval. All of this can be done on your own but if you need assistance in the incorporation process, we can help you with that.


Aspire Kickstart offers the first same-day online incorporation and business account opening in Singapore from anywhere in the world. Say goodbye to long waits and hefty paperwork. Aspire Kickstart cuts through the stress and confusion that comes with incorporating a company and opening a business account in Singapore.

You can save money and incorporate and open a business account on the same day with Aspire Kickstart - packages start as low as S$280! That’s 11% cheaper than if you incorporated by yourself


Learn more about our incorporation packages here.

Ready to get started?
Aspire makes business finance easier - expense management, invoicing, FX, employee claims and more. This is the all-in-one finance OS for your business
Try it out today >>
Subscribe
Get high quality finance and entrepreneurial resources in your inbox.
Subscribe to the newsletter >>

Get high quality finance and business content in your inbox

Get insights and resources on building & managing your finance team, your finance tech stack and growing your business
Cheers! We'll share our best articles with you shortly. See you around!
Seems like something went wrong. Could you try again?

Explore the all-in-one finance solution built for finance teams

Save time and money with borderless payments, corporate cards, expense management, and more