Investors and entrepreneurs have been successfully incorporating Singapore subsidiary companies for years, due to Singapore’s simple, transparent and efficient business and tax laws.
A Singapore subsidiary company can be set up in just one day, and is immediately able to benefit from Singapore’s low-tax schemes and robust economy. A subsidiary company setup can be structured in various forms, however, it is essentially a Private Limited Company (Pte Ltd) and so is its own separate legal entity, with a local or foreign corporate entity acting as majority shareholder.
Singapore subsidiary company incorporation allows 100% ownership of the business by the foreign parent company and enjoys the low-tax incentives of a Singapore resident company. There are no restrictions on the repatriation of profits and in order to set up the company, a minimum paid-up capital of only S$1 is required.
One government incentive that attracts many international companies to set up a Singapore subsidiary company is the tax law for startups. To help startups preserve their cash flow and profits, the first S$100,000 of income is fully tax-exempt for the three years following incorporation. A further 50% tax exemption is given on the next S$200,000 of taxable income, for the same three years, to further inspire profit holdings.
These exemptions are applicable to any Singapore private limited company, under the conditions that the company be:
i. A Singapore tax resident company;
ii. Incorporated in Singapore;
iii. Owned by no more than 20 shareholders during the first three consecutive years, and the shareholders must be individuals beneficially holding the shares in their own names.
Not only do investors benefit from Singapore’s easy setup structure but also from Singapore’s world-renowned business reputation. Singapore’s economy is one of the top 3 most open economies for international trade and investment and is among the top 3 most competitive countries in the world when it comes to business.
Setting up a Singapore Branch Office, or a Singapore Representative Office, are other options for foreign companies. Key differences between these and the subsidiary company are:
i) A Branch Office is not its own legal entity and so the parent company is responsible for liabilities. It is essentially an extension of that parent company
ii) A Representative Office is not allowed to undertake operations that generate revenue. It can be used by the parent company to assess opportunities in the market.
Incorporating a Singapore subsidiary company is quick, with the two basic stages of company name approval and company registration, able to be completed within 1-2 working days. The requirement of having to use a professional services firm to complete the registration process is an advantage as an experienced consultant will ensure the process goes smoothly and they can also provide guidance on the most suitable strategies to meet business objectives. Having a subsidiary company incorporated in Singapore serves as a gateway to the world and is ideal for small to medium enterprise in western markets looking for an opportunity to expand into Asia.
Healy Consultants is a leading corporate services firm that assists entrepreneurs and investors with Singapore company registration. The firm provides a range of corporate services to assist entrepreneurs including setting up a Singapore corporate bank account, offshore company formation and international tax planning.