Statutory Requirements of Setting Up A Subsidiary Company in Singapore

0

Company incorporation in Singapore is subject to compliance with the Singapore Companies Act. Additionally, the accounting and taxation processes must comply with the regulations prescribed by the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).

Statutory Requirements of Incorporating a Subsidiary Company in Singapore

  • Company name: The subsidiary should have a business name approved by ACRA.
  • Director: One of the directors in the subsidiary company should be a permanent resident or citizen of Singapore. Alternatively, the individual should have either an employment pass or a dependent’s pass.
  • Shareholder: The subsidiary must have at least one shareholder; this can be either a person or a corporate entity.
  • Paid-up capital: The subsidiary company should have a minimum paid-up capital of SGD $1.00.
  • Company secretary: A company secretary must be appointed within six months of incorporation. The individual must be a resident of Singapore.
  • Company auditor: A new company with more than 20 shareholders and annual turnover above SGD $5 million must appoint an auditor within three months of incorporation.
  • Registered office: The subsidiary business must have a registered physical address in Singapore.

For foreign companies that wish to set shop in Singapore but are unable to appoint a resident director for various reasons, the alternative is to hire a competent local nominee director through a local incorporation services provider. This can be either a temporary arrangement to enable swift incorporation, or a long-term contract.

Key Benefits of Having a Subsidiary Company in Singapore

Here are some of the perks overseas businesses enjoy when they establish a subsidiary company in Singapore:

  • Taxation: As the subsidiary company is incorporated in Singapore, it is treated as a separate legal identity and a tax-resident of Singapore, due to which it enjoys all the taxation benefits available to locally-owned private companies. These include government subsidies and incentives, special pro-business schemes such as Start-up Tax Exemption (SUTE) and the Corporate Income Tax (CIT) rebate, and many others.
  • Share capital: The overseas parent company can hold hundred percent of the shares in the subsidiary business. The added advantage is that the shareholders are liable only up to the value of the shares subscribed.
  • Accounting: ACRA allows the subsidiary company to hold paid-up capital in the currency of the parent company, which allows for easier bookkeeping.
  • Profit repatriation: As per Singapore’s business laws, corporate capital and profits from a subsidiary company can be freely transferred (or repatriated) to the home country of the parent business. Not every country allows this due to concerns about capital drain.
  • Identity: The subsidiary can have a different name than that of the parent business, which allows overseas companies the freedom to choose which business activities they want to make public.

The procedure of registering a subsidiary office in Singapore is not very different from that of setting up a local private limited company. To navigate the process in an easy and hassle-free manner, foreign companies and investors often hire local incorporation firms specializing in subsidiary company registration.

Leave A Reply