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A subsidiary company in Singapore is owned by a corporate entity. It is a form of a private limited company that is incorporated in Singapore with any other corporate entity. It can be owned by a foreign or local corporate entity.
As mentioned above, it is a private limited company that is incorporated in Singapore. The major shareholders of a subsidiary company are foreign or local companies. It has its legal entity that is distinct from its parent company’s legal entity.
A subsidiary company that is properly structured is a tax-efficient corporate body. It is the most common form of business entity registered by foreign companies in Singapore.
It is considered as the most preferred choice for foreign companies because Singapore allows 100% foreign shareholding. The liability of the shareholder is limited to have the value of the shares it subscribes to. Singapore doesn’t impose any restrictions on the repatriation of any profit of a Singapore subsidiary.
To incorporate a Subsidiary Company in Singapore, the company has to register itself under the Companies Act with Accounting and Corporate Regulatory Authority. A subsidiary company in Singapore is also considered as a resident company for tax purposes.
This article will provide you with a detailed analysis of the procedure to register a Subsidiary Company in Singapore.
The name of the company in Singapore must be approved by ACRA before its incorporation. The ACRA can reject the name of the company on the following basis.
The company must have at least one corporate shareholder. The person can be the director and shareholder of the company. The company can have 100% local or foreign corporate shareholding.
The Singapore Companies Act allows a minimum of 1 and a maximum of 50 shareholders in the Company. Details of the shareholders will appear on public records.
A Private Limited Company in Singapore must have at least one director. The director must be a citizen of Singapore or a Singapore permanent resident. The person who holds an Employment Pass or a Dependent’s Pass with a residential address in Singapore can also be the director of the company.
A Private Limited Company can have as many additional local or foreign directors as a company wants. The directors must be at least the age of 18 years and must not be bankrupt or have any criminal record in the past. Information of the directors must also appear on public records.
Every Singapore Private Limited Company must have a competent Company Secretary. The secretary must be a resident of Singapore. According to the Singapore Companies Act, the companies should appoint a company secretary within six months of incorporation.
To register a Singapore company the minimum paid-up capital is S$1, or its equivalent value in any other currency. The parent company can own 100% shares of the company. The Subsidiary Company doesn’t have any concept of authorized capital in Singapore.
Every company is required to have a registered office address in Singapore. The registered company’s address must be a physical address. P.O. Box address has no
value for the registration process. The companies can also use their residential address for certain types of businesses.
The company’s constitutional documents and provisions of the Companies Act governed the governance structure of the company and the interrelationship between the company and its shareholders.
The articles of association and the memorandum are now merged and renamed as a single document, called “Constitution”. All the existing companies that are incorporated before this law are not required to merge the document and can continue with their memorandum and articles of association.
If your Representative Office plans to import and export samples of goods in and out of Singapore, you will be required to register with Singapore Customs and get a CR Number that is commonly known as Custom Registration.
The Memorandum and Articles of Association of the company must be lodged with ACRA. The Memorandum generally has an overview of activities in which the company is involved. The Articles of Association shows the rules that govern the internal management of the company.
The company must appoint an auditor within three months of Singapore Subsidiary registration.
A Subsidiary Company in Singapore must file an audited account annually. However, the dormant companies can file an unaudited financial report.
The Audit Exemption Criteria for Singapore Subsidiary Company
The subsidiary companies in Singapore are required to file an audit report until the company meets the new Audit Exemption Criteria for a small group. To complete the requirement of a small group, the subsidiary company must meet at least 2 or 3 criteria:
1. The aggregate turnover of the company must be the maximum of SGD 10million.
2. The aggregate balance sheet total should be less than SGD 10million at the end of the financial reporting period
3. The employees of the company should be less than 50.
The tax incentives for a Subsidiary Company
A subsidiary company operating in Singapore can get benefit from the republic’s extensive network of Free Trade Agreements (FTA) and Avoidance of Double Tax Agreements (DTAs).
The company that has an individual shareholder holding a minimum of 10% shares of the subsidiary company then the firm qualifies to Zero Tax on its first S$100,000 for the first consecutive year.
The Timeline and Procedure for registering Singapore Subsidiary company
The registration process of a Subsidiary Company in Singapore is an online process. The foreign companies need a professional services firm to start up their business in Singapore. The registration process can take a few hours if all the provided documents are complete and in accordance.
Foreign companies that don’t want to relocate to Singapore to run the company personally must appoint a Singapore resident director following the Singapore Companies Act.
If you are intended to relocate your management and key employees to Singapore to run your new setup then you have to submit an application
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