Singapore, known for its robust economy and pro-business policies, positioned itself as a major international commercial hub. For entrepreneurs and investors looking to expand their operations in Asia, the decision to start a subsidiary company in Singapore can be a strategic and profitable one. With a straightforward process and supportive regulatory framework, opening a subsidiary company in Singapore is an attractive option for many businesses.
What Does It Mean to Start a Subsidiary Company in Singapore?
A subsidiary company in Singapore is a type of private limited company that is essentially a ‘child’ entity of a foreign ‘parent’ company. It operates as a separate legal entity from its parent company, meaning it can engage in contracts, acquire assets, and is responsible for its own liabilities. This arrangement often serves the strategic interests of international businesses looking to establish a presence in Singapore while minimizing risks to the parent company.
Requirements to Open a Subsidiary Company in Singapore
To set up a subsidiary in Singapore, there are several requirements that must be fulfilled:
- Company Name: The subsidiary’s name must be approved before registration.
- Shareholders: A minimum of one shareholder is necessary, which can be the parent company.
- Directors: A minimum of one local resident director is mandatory.
- Company Secretary: Within six months of its creation, the subsidiary is required to designate a competent company secretary.
- Share Capital: When the company is incorporated, at least one share must be issued.
- Registered Address: The company must have a local registered address in Singapore.
How to Start a Subsidiary Company in Singapore?
Starting a subsidiary company in Singapore involves several steps. A thorough guide to assist you in successfully navigating this process may be found below.
1. Research and Planning
Thoroughly investigate Singapore’s market, industry, and competitors before beginning the incorporation procedure. Create a thorough company plan that includes financial forecasts, growth strategies, and a market study.
2. Select Your Company’s Structure
Choosing the appropriate business structure is essential. In Singapore, you can register your subsidiary as a private limited company, a branch office, or a representative office. A private limited company is the most widely used due to its separate legal entity status and limited liability for shareholders.
3. Register Your Company Name
For your subsidiary business, come up with a distinctive and catchy name. Ensure it complies with Singapore’s business name regulations and is not offensive or reserved. You can see if your preferred name is available on the Accounting and Corporate Regulatory Authority (ACRA) website.
4. Appoint Directors and Shareholders
There needs to be a minimum of one Singaporean local director in your subsidiary firm. Additionally, you can appoint foreign or local shareholders. It’s essential to note that foreign person or entity may hold 100% of the shares.
5. Registered Office Address
Your subsidiary should have a registered office address in Singapore. This is where official documents and notices will be sent. You can use your business address, the address of a professional service provider, or a residential address.
6. Register with ACRA
You’ll need to submit an application to ACRA for the registration of your subsidiary company. This includes providing your company’s constitution, directors’ and shareholders’ details, and your registered office address. The process is straightforward and can typically be completed within a few hours.
7. Obtain the Required Licenses and Permits
To operate lawfully, you might need to get certain licenses or permits, depending on your industry. As needed, make sure to look into and apply for these licenses.
Post-Registration Requirements & Compliance
Once your subsidiary company is registered, you must adhere to certain post-registration requirements and ongoing compliance.
These include:
- Tax Compliance: Ensure you understand Singapore’s tax regulations and fulfill your tax obligations, including Goods and Services Tax (GST) and corporate income tax.
- Annual Filing: Your subsidiary business needs to submit financial statements and yearly reports to ACRA. Maintaining good standing requires adherence to these reporting obligations.
- Employment Laws: Singapore has strict employment laws, and you must comply with regulations regarding hiring and employment of staff.
- Corporate Governance: Follow corporate governance best practices and maintain accurate records of your company’s operations and financial transactions.
Advantages of Starting a Subsidiary Company in Singapore
Starting a subsidiary company in Singapore comes with a plethora of advantages:
- Tax Benefits: Singapore offers attractive tax exemptions and incentives for newly incorporated companies.
- Ease of Doing Business: Ranked highly for ease of doing business, Singapore’s regulatory environment is favorable for corporate entities.
- Strategic Location: Located in the center of Southeast Asia, Singapore is a gateway for business expansion across the region.
- Protection of Assets: A subsidiary, being a separate entity, ensures that the assets of the parent company are insulated from liabilities.
- Global Reputation: Singapore’s reputation as a global financial center adds prestige to businesses established there.
Conclusion
To start a subsidiary company in Singapore is to take a step towards global expansion and success. The ease of incorporation, coupled with a conducive business environment, makes Singapore a top choice for international companies seeking to strengthen their global presence. By meeting the requirements and following the straightforward process, you can leverage the myriad benefits that this vibrant economy has to offer.
At OnDemand International, we understand the intricacies and opportunities that come with setting up a subsidiary company in Singapore. Our seasoned experts stand ready to guide you through the myriad phases of business registration, ensuring a seamless and strategic entry into one of the world’s most vibrant economic landscapes. Contact our business experts today.
FAQ’s
Yes, foreign individuals or entities can own 100% of the shares of a subsidiary company in Singapore.
A subsidiary company in Singapore must have at least one local director who is a resident of Singapore.
The registration process can typically be completed within a few hours once all the necessary documents are submitted to ACRA.
Yes, Singapore offers various tax incentives to attract businesses, including exemptions, deductions, and reduced tax rates.
The requirement for permits and licenses depends on the nature of your business. It’s essential to research and identify the specific licenses needed for your industry.