Incorporation

Singapore Subsidiary Company

A subsidiary company is a private limited company incorporated in Singapore that is partly or completely owned by the parent company, which usually holds a controlling interest (more than 50%) in the subsidiary company. A subsidiary structure is also a common form of incorporation in Singapore.

001 Singapore Subsidiary Company

Characteristics

The subsidiary-parent company structure is a popular choice for foreign companies foraying into Singapore because subsidiaries are separate legal entities, which limit the liability and legal risk of the parent company. A subsidiary is partly or wholly owned by a parent company, which can either be a local or foreign company. In Singapore, 100% foreign ownership in a subsidiary company is permitted.

A subsidiary company is treated as a local tax-resident here, thereby allowing it to enjoy certain tax benefits and incentives offered by the authorities. It has limited liability, which means it can sue or be sued, and own property in its name. It also has its own corporate bank accounts and operating capital.

A Singapore subsidiary company is suitable for local or foreign companies that wish to expand their operations in Singapore.

Compliance Requirements

For more information, please visit our Singapore Statutory Compliance Requirements page and Incorporation Details page. Once the subsidiary company is incorporated, annual filings to ACRA and IRAS is required. Please visit our Annual Filings page for more information.

Pros and Cons of Singapore Subsidiary Company

  • A subsidiary company with one or more shareholders with at least 10% shares is entitled to prevailing tax benefits. Newly set-up companies in Singapore do not have to pay any tax on the first SGD100,000 of chargeable income for the first three consecutive years.
  • It has a separate legal entity, thus protecting the parent company from liabilities and legal risks.
  • It allows the parent company to raise additional capital by offering stocks pertaining to the subsidiary company.
  • As a subsidiary, the company is able to expand the brand identity of its parent company in Singapore.
  • The paid-up capital of the subsidiary can be in the same currency as its parent company, thus simplifying accounting procedures.
  • Singapore allows free repatriation of entire profits and capital of the subsidiary company.
  • The parent company may not have control of the subsidiary's cash flow, unless it is fully owned by the parent company.
  • The parent company may have to pay for the subsidiary's debts and liabilities even if it has no legal obligation to do so to protect its name and reputation.
  • Control and decision-making may be complicated if a subsidiary is partially owned by another company.

 

002 Singapore Subsidiary Company

Note

VOPlus can advise you on the most suitable type of business entity for your business and help you set up a Subsidiary Company in Singapore promptly. Contact us today for a consultation!