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Setting Up a Subsidiary in Singapore

Setting Up a Subsidiary in Singapore

Foreign companies wanting to settle in Singapore can opt to register a subsidiary, a branch office, or a representative office. Subsidiaries can be registered in Singapore as private limited liability companies whose majority shareholder is another corporation. The parent company can be local or foreign. Our company incorporation experts can assist businessmen who are interested in setting up a private limited company in Singapore with corporate shareholding structures.

Quick Facts
Applicable legislation

Singapore

Best Used For

Trading, commercial, online commerce, manufacturing, etc.

Minimum share capital (YES/NO)

No
Time frame for the incorporation (approx.) Approx. one week

Documents to be filed by parent company – the subsidiary's incorporation documents;
– the parent company's Certificate of Registration;
– resolution for the appointment of directors;
– proof of Singapore legal address;
– copy of company representatives in Singapore;
– copy of subsidiary director's passport/ID and proof of residential address of the director.
Legal representative required (YES/NO)

yes

Local bank account (YES/NO) yes
Independence from the parent company Independent business form
Liability of the parent company No liability for the subsidiary's debts and obligations
Corporate tax rate 17%
Annual accounts filing requirements Estimated Chargeable Income (ECI) statement must be filed 3 months before the end of the financial year, annual tax return must also be filed one month after the shareholders' annual general meeting.
Possibility of hiring local staff (YES/NO) Yes
Travel requirements for incorporating branch/subsidiary (YES/NO) No
Double tax treaty access (YES/NO) Yes, to approx. 90 double tax treaties
Special requirements related to the trading name (YES/NO) No, the subsidiary can bear any name, as long as it is unique.

Activities permitted

It can undertake both the activities of the parent company, as well as others.

Restrictions (if any)

No

Special licensing requirements (if any) For certain activities, specific licenses may be required.
Local address required (YES/NO)

Yes, this is a mandatory condition for setting up a company in Singapore, including a subsidiary.

Authority to be registered with

Accounting and Corporate Regulatory Authority (ACRA)

Employment registration requirement (YES/NO)

Yes

Option to transfer employees from the headquarters (YES/NO)

Yes, employee transfers are available for this business form.

Legal forms that can be used for registration

– private limited liability company,

– public company.

Audit requirements (if any) Audits are required for subsidiaries not meeting the small company criteria.
Possibility to use a virtual office for registration (YES/NO)

Yes, the virtual office is an option for registration but not in a long term.

Applicability of the corporate tax

A subsidiary will pay the corporate tax on its global income.

Access to tax benefits (YES/NO)

Yes, subsidiaries can access all tax benefits available to domestic enterprises.

Advantages

– quick incorporation,

– access to multiple grants,

– tax deductions and other governmental benefits,

– access to numerous markets.

Incorporation services availability (YES/NO) Yes, we can assist with the creation of a subsidiary in Singapore.

Considering the fact that companies to be registered must appeal to the services of a professional firm, our specialists in company formation in Singapore can draft the Articles of Association of the company and perform all the legal requirements for company registration. We are highly experienced in the entire procedure of registering a subsidiary in Singapore.

The main characteristics of subsidiaries in Singapore

Most of the time, foreign companies seek to set up branch offices or subsidiaries, as these are the two main business forms recommended for expansion. Even if both types of structures have their advantages, the subsidiary is more flexible when it comes to the activities it can undertake.

Here are the main features of a subsidiary in Singapore:

  1. it can take the form of a private or public limited liability company and will be treated like a domestic business;
  2. it will operate as an independent entity and the management in the Singapore subsidiary will make decisions on its behalf;
  3. it can undertake the same activities as the parent company, however, it has the freedom to complete additional undertakings;
  4. from a taxation point of view, the subsidiary is treated like a Singapore-tax resident company;
  5. it can own assets in the form of real estate in Singapore and have its own corporate bank account;
  6. it will be registered under the regulations of the Company Law in Singapore and will need to meet the incorporation requisites imposed in the city-state.

Many times foreign companies choose to set up subsidiary companies in Singapore thanks to the favorable taxation system imposed on local companies. In most cases, the subsidiary will take the form of a private limited liability company in Singapore.

When choosing to open a subsidiary it is important to note that the parent company can own the entire stock or all the shares in the Singapore company, which is one of the greatest advantages of the city-state over other countries in which this is not possible. Other requirements for creating a subsidiary in Singapore refer to the local business having a registered address in the city-state, as well as a resident secretary. Reserving a trade name with the Accounting and Corporate Regulatory Authority is the first step in setting up a company in Singapore. Our experts advise foreign investors to choose three different names and submit them for Trade Register clearance in order to prevent any issues. This procedure follows the same steps as those for creating any other kind of legal entity recognized by Singapore’s Company Law.

If you want to open a company in Singapore and need advice on choosing a business entity, our local agents can guide you. We can also assist with various nominee services for your subsidiary, among which nominee director and secretary in order to ease your operations in this state.

Requirements for setting up a subsidiary in Singapore in 2024

Throughout 2024, the procedure of opening a Singaporean subsidiary remains the same as it was in previous years. The process can be completed online and is available online with ACRA.

Foreign companies are allowed to fully own subsidiaries in Singapore, but at least one of the directors of the subsidiary must be a citizen, and have permanent residency or an employment license in Singapore. The directors of a Singapore subsidiary must have clean criminal records. The minimum share capital required to set up a subsidiary in Singapore is 1 S$, as according to the Company Law there is no required authorized capital when establishing a subsidiary. Singapore subsidiaries are required to have registered offices and a secretary who must be a resident. Within the first three months from the subsidiary registration, an auditor must be nominated because audited accounts must be submitted to the tax authorities each year (unless the SG subsidiary is audit-exempt – please see conditions for this below).

We are also at the service of clients seeking to wind up companies in Singapore.

Business form available for subsidiary company formation in Singapore

When registering a subsidiary in Singapore, the Company Law provides for several types of legal entities that can be employed, as the subsidiary will be treated like a domestic company, therefore it will use a business form acknowledged in the city-state. Among these, foreign companies can use private and public limited liability companies, and exempt companies. Thanks to the easy registration requirements, the private limited liability company remains the choice of most foreign companies setting up operations in Singapore.

Trading name reservation for a Singapore subsidiary

One of the particularities of opening a subsidiary in Singapore is that it is not required to bear the same name as its parent company. From this point of view, the representative registering the subsidiary must submit a reservation application for a trading name. The selected name must be unique and must comply with the legal requirements imposed in the city-state.

We can handle the trading name reservation as part of the company formation procedure in Singapore. Businessmen interested in investing in other jurisdiction can receive help from our partners. For example, if you need company incorporation services in Switzerland, our local partners are at your disposal.

What are the documents required for setting up a subsidiary in Singapore?

The following documents must be submitted to the Singapore Trade Register:

  • the certificate of incorporation of the parent company,
  • a statement containing the registered address and directors of the parent company,
  • the decision of appointing the subsidiary’s representative in Singapore,
  • copies after the passports and proof of residential addresses of the subsidiary’s directors,
  • the parent company’s resolution appointing the directors,
  • the registered address of the subsidiary in Singapore,
  • the Articles of Association of the Singapore subsidiaries.

Foreign companies seeking to open subsidiaries in Singapore in 2024 are not required to comply with difficult procedures, however, they can rely on the services of our specialists for quick company formation solutions.

If you’re interested in setting up a company in Singapore, we can also help. For services that are personalized for you, get in touch with one of our agents. You can rely on our regional experts to select an appropriate legal form all the way through the incorporation procedure. Contact us to see how we can assist you in starting your business.

The main particularities of a subsidiary in Singapore are described in this scheme created by our Singapore company formation team:

Independence from the parent company

One of the main features of the subsidiary company is that it is a fully independent legal structure from the parent company. The main aspect to consider is that the parent company will be connected to the subsidiary in Singapore through ownership. It is useful to note that Singapore companies can also set up subsidiaries, however, they will usually employ the branch office they can have control over.

When it comes to foreign companies setting up subsidiaries in Singapore, these will usually ensure the independence of the latter by appointing a management team and by filing separate financial returns at the end of the year.

If you want to open a company in Singapore and need more information on the requirements for creating a subsidiary, our local advisors can guide you.

Various legal conditions must be met in order to set up a company in Singapore. Typically, it takes four to five weeks to get the business up and running. To explore your needs and how we might assist you in establishing any form of business here, get in touch with us at any time.

Sister companies as subsidiaries in Singapore

The subsidiary company can take various forms when created by local or foreign companies in Singapore. A parent company can register several companies known as sister companies. In this case, the parent company will be considered a holding company while the subsidiaries will be treated like sister companies. The important aspect to consider is that the subsidiaries of the Singapore holding company may undertake completely different activities, the only connection between them being the parent company.

Singapore is one of the most reputable business centers in Southeast Asia and thanks to its favorable taxation system, the city-state is used by foreign companies in Europe seeking to establish presences in Asia by creating subsidiaries. Moreover, Singapore provides for the Regional Headquarter Scheme under which companies using Singapore as their legal seats for regional operations in Asia can obtain substantial benefits.

The subsidiary company will be treated like a tax resident company in Singapore, while the parent company will have limited liability in terms of the debts and obligation of its subsidiary.

Among the specific particularities of setting up a subsidiary in Singapore, we mention the following:

  • it is possible for the subsidiary to use the same currency for the paid-up capital as the parent company, this way, the accounting requirements will be simplified for both entities;
  • the subsidiary and its parent company will be able to establish their financial years independently, thus streamlining their operations;
  • the name of a subsidiary company can be different from that of the foreign entity;
  • the subsidiary can repatriate all its profits to the subsidiary freely.

If you need more information on the taxation of subsidiaries or the treatment applied to holding companies in the city-state, our company registration consultants in Singapore can answer your questions.

If you want to open a company in Singapore in 2024 under the form of a subsidiary, you must also consider appointing a resident director for whom you must obtain a residence permit. You can contact us if you need assistance in immigration matters.

Hiring employees in a subsidiary in Singapore

There are no restrictions to the number and nationality of employees a Singapore subsidiary can have, however, when it comes to employing foreign citizens, work visas are required. This is also a mandatory requirement for the foreign directors in the company.

An important aspect to consider when hiring foreign employees in Singapore is that there are several types of work permits available, and it is important to choose the correct ones depending on the level of expertise and qualifications of the workers. In the case of company directors and managers, the Employment Pass for experienced professionals is required.

Our agents in Singapore can explain the employment requirements when hiring personnel for companies in the city-state.

Taxation of subsidiaries in Singapore

A Singapore subsidiary will be subject to the same tax regulations applied to all companies registered in the city-state. The corporate tax rate is 17% in Singapore. However, there are companies that can use subsidiaries for tax efficiency strategies. This is the case of holding companies that can establish subsidiaries in Singapore with the purpose of owning shares on which they will be not levied withholding taxes. It is best to ask for accounting services related to the taxation of subsidiary companies in Singapore.

Subsidiary companies can obtain EORI numbers in Singapore and trade in the EU on behalf of the parent company.

Yearly filing requirements for Singapore subsidiaries

As an independent company, a subsidiary must respect the same annual filing requisites as local companies. According to the Company Law, all companies must file an estimated chargeable income (ECI) form three month before of the end of the financial year. The company must also hold an annual general meeting of the shareholders in which the financial status of the business. One month after the annual meeting, the company must also file an annual return with the Inland Revenue Services in the city-state. Please note that there are different requirements for the annual general meeting which depend on the time of registration of the Singapore subsidiary. Also, for certain subsidiaries, audit requirements will be in place.

Please note that will also offer virtual CFO services for your subsidiary in Singapore.

Tax benefits for subsidiaries in Singapore

It is good to note that a subsidiary can benefit from various tax advantages, as well as audit exemptions. The criteria to meet in order to qualify for the audit exemption imply the subsidiary to be part of a small group, as it follows:

  • the aggregate turnover of the group cannot exceed 10 million SGD in a tax year;
  • the aggregate balance sheet of the group cannot exceed 10 million SGD at the end of a financial year;
  • the group has no more than 50 employees at the end of each financial year;
  • at least two of these criteria must be met in order to qualify for the audit exemption;
  • as a tax advantage, a subsidiary can obtain a 0% corporate on the first 100,000 SGD for 3 years, if the parent company owns at least 10% of the voting shares.

An important tax advantage offered by the subsidiary to the parent company is that the dividends and profits are exempt from taxation in home country of the latter provided that corporate tax in the respective state is at least 15% and if the corporate tax had been paid in Singapore.

For this purpose, tax minimization solutions for the Singapore subsidiary can be set in place with the help of our local specialists.

The subsidiary is a very appealing way of doing business in Singapore in 2024 and if you need assistance in setting one up, our agents are at your disposal with complete company registration services.

Other requirements for subsidiaries in Singapore

Once the subsidiary is incorporated, it must comply with additional requirements, among which applying for various licenses and permits. It is important to note that a subsidiary can operate in most of the industries in Singapore and many times, such a company will undertake trading activities, case in which it must register and set up a special account with the Singapore Customs.

The subsidiary must ensure it has a registered office which stays open at least 3 hours per day during business days. It must also have a seal, while the business registration number issued by ACRA must be printed on all official documents issued by the subsidiary.

Our Singapore company formation consultants can offer detailed information on all the requirements to be met after incorporating a subsidiary at the level of 2024.

You can also watch the video below for more information on how to open a company in Singapore as a subsidiary:

The procedure for subsidiary registration presented by our Singapore company formation agents

The registration process of a Singapore subsidiary is quick and easy once all the documentation has been properly prepared. The first step will be to submit an application for the approval of the subsidiary’s name and the second step will be the company incorporation. The process usually takes about two days. The Singapore subsidiary must also open a bank account with a local bank. In case you are thinking of opening a branch office in Singapore instead, you can rely on our help.

Why set up a subsidiary in Singapore in 2024?

The creation of a Singapore subsidiary company in 2024 represents one of the best solutions for business owners who want to expand their operations in Southeast Asia. Apart from the fact that it will enable them to continue their activities both in the home country and in Singapore, it will also be possible for the company created here to complete other operations that suit the year 2024 and the market of the city-state.

According to forecasts made by the Monetary Authority of Singapore (MAS), the city-state’s economy will grow faster, and the rate of inflation will significantly decline by 2024. Given the Federal Reserve’s decision to stabilize interest rates and the anticipated increase in Singapore’s exports, the upcoming year could mark a significant turning point in the country’s financial development. It is anticipated that industries including manufacturing, trade, food and beverage, and tourism would all contribute to the expansion. A few key points are highlighted by Singapore’s economic outlook for 2024: according to current projections, GDP growth will average 2.3%, with a potential maximum of 4%. Forecasts also indicate that inflation would average 3.4%.

If you are wondering about opening a subsidiary in Singapore in 2024, our specialists in company formation can explain all the details.

Please contact our local representatives who can provide you with all the information about the process of opening a company in Singapore.