Setting Up a Singapore Subsidiary Company

Foreign and local MNCs and SMEs are increasingly opting to form a Singapore subsidiary company. It helps them in establishing their Asian business headquarter, limit their liability. Subsidiary brings them tax advantages.

ACRA, the Company Registrar of Singapore, allows foreigners 100% shareholding in their subsidiary which is treated as a local tax-resident. However, they need to hire incorporation services providers like SBS Consulting, as they cannot self-incorporate a company in Singapore.

Singapore Subsidiary Company Registration Guide

The parent company owns its subsidiary. Singapore subsidiary has a distinct identity from its parent. That is why it serves no purpose to treat them as one. It pays to install an experienced management team to make independent decisions and supervise reporting of annual financial returns for the Subsidiary company. For the registration of a company in Singapore, you can check the services of Piloto Asia.

Pre-Incorporation Requirements for Starting a Subsidiary Company

  •         At least one director, ordinarily resident of Singapore
  •         Minimum one corporate shareholder
  •         At least one company secretary
  •         Registered local address
  •         Minimum paid-up capital of S$1

Process to Set Up a Subsidiary Company

#1 Company Name

Choose a company name which can be same or different from the parent. If it is available, register with ACRA. Your agent can advise you on choosing a valid company name and simplify this step for you.

#2 Apply to ACRA for Registering Subsidiary

You need to submit incorporation documents with your application. All of these documents need to be in English. Your agent can provide you with expert guidance for providing the following details:

  •         SSIC code to describe the subsidiary’s business activities
  •         Details of shareholding pattern
  •         Shareholders agreement
  •         Particulars of company shareholders, directors, secretary
  •         Company Constitution (M&AA)

As per the Company Law of Singapore, you also need to appoint an auditor within three months of the date of incorporation.

Post Incorporation Activities

After the company incorporation, you need to get on with the post-incorporation tasks like:

  •         Acquire business profile for your subsidiary
  •         Incorporation certificate
  •         Issue share certificates
  •         First board resolution
  •         Bank account opening resolution
  •         Order company seal and company stamp

Before you start the business activities of your subsidiary, you need to open a corporate bank account in a bank in Singapore to streamline its cash flow.

Employment Pass

Foreigners need a work visa to relocate to and work in Singapore. Your company secretary needs to apply to MOM and acquire Employment Pass for these individuals.

Tax Benefits Available to a Subsidiary in Singapore

A subsidiary company as a local tax-resident in Singapore can claim a number of tax benefits. It also has access to affordable funding to expand its activities. Singapore offers ease of doing business. It offers robust IP protection laws and the legal system. It has excellent air and sea connectivity with the emerging markets.

Singapore has an attractive tax framework. The company income tax is in the range of 0%-17%, and personal income tax is in the range of 0%-22%. A subsidiary can benefit Start-up Tax Exemption (SUTE) Scheme and the Corporate Income Tax (CIT) rebate. This brings its effective tax payable to around 8.5%-9%.

SUTE Scheme

Under the Start-up Tax Exemption Scheme, for the first 3 years, a subsidiary can claim:

  •         75% tax exemption on its first $100,000 chargeable income
  •         50% tax exemption on its next, $200,000 chargeable income

PTE Scheme

A subsidiary in Singapore can also claim Partial Tax Exemption (PTE). YA 2020 onward, it can claim:

  •         75% tax exemption on its first $10,000 of normal chargeable income; and
  •         50% tax exemption on its next $190,000 of normal chargeable income

A foreign parent company can wholly own its Singapore subsidiary. Corporate entities choose to do so to establish their presence in Asia. It also gives them access to more than 2.5 billion customers living in Asia.

SBS Consulting is a reputed registered filing agent in Singapore. If you are looking for expert assistance, contact us on +65-6536 0036 or email us at info@sbsgroup.com.sg to set up your Singapore Subsidiary.