Registration of a Singapore Subsidiary Company
A Singapore subsidiary is a private limited company incorporated in Singapore in which the majority shareholder is a foreign or a local company. It has a legal identity distinct from the parent company’s.
This page provides a detailed overview of a Singapore subsidiary company registration. A properly structured subsidiary company is a very tax efficient corporate body; hence, this form is the most common type of entity registered in Singapore by foreign companies.
A Singapore subsidiary is the most preferred choice for foreign companies to establish their presence in Singapore. Singapore allows 100% foreign shareholding. The shareholder’s liability is limited to the value of the shares it subscribes to. Singapore does not restrict the repatriation of any profit or capital of a Singapore subsidiary.
Incorporation of a Singapore Subsidiary Company comes into existence upon registration under the Companies Act (Cap 50) with Accounting and Corporate Regulatory Authority (ACRA). A Singapore subsidiary company is also considered a resident company for tax purposes.
Singapore Subsidiary Registration Requirements
Proposed Name of Subsidiary: The company name must be approved by ACRA before the Singapore Company can be incorporated. ACRA will reject a proposed company name for the purpose of incorporation if the name is identical to another existing company name; or undesirable or identical to names reserved by the Minister in its register.
Shareholders: A minimum of at least one corporate shareholder is required. A director and shareholder can be the same or different person(s). 100% local or foreign corporate shareholding is allowed. The Singapore Companies Act allows a minimum of one and a maximum of 50 shareholders for a Singapore Private Limited Company. Details of shareholders will appear on public records.
Resident Directors: A Singapore Private Limited Company must have at least one director who must be an “ordinary” resident in Singapore, i.e. a Singapore citizen, a Singapore permanent resident or a person who holds an Employment Pass/EntrePass or a Dependant Pass with a residential address in Singapore.
There is no limitation on the number of additional local or foreign directors a Singapore Private Limited Company can appoint. The director must be at least 18 years of age, and must not be bankrupt or convicted of any criminal malpractice in the past. Information of the directors will appear on public records. Directors can also be shareholders or vice versa.
Company Secretary: The company secretary must be a natural person who is an “ordinary” resident in Singapore. The Singapore Companies Act requires each company to appoint a company secretary within six month of incorporation.
Share Capital/Paid-up Capital:The minimum paid-up capital for the registration of a Singapore company is S$1 or its equivalent in any other currency. The parent company may own 100% of the company’s shares. There is no concept of authorized capital in Singapore.
Registered Address: Every company registered in Singapore is required to have a registered office address. The registered address must be a physical address and cannot be a PO Box. The use of residential address is allowed for certain types of business.
Governance Structure: The governance structure of a company and the interrelationship between the company and its shareholders is governed by the company’s constitutional documents (the Memorandum of Association and the Articles of Association) as well as by the provisions of the Companies Act. It is also not uncommon to find the members of companies (usually in joint venture arrangements) entering into ‘shareholder agreements’ as among themselves to capture some of their key rights and obligations in relation to how the company is to be structured and managed.
Memorandum and Articles of Association: The Memorandum and Articles of Association of a company must be lodged with ACRA. The Memorandum specifies the activities in which the company may engage in whereas the Articles of Association specifies the rules governing the internal management of the company.
Auditor: An auditor must be appointed within 3 months of the Singapore subsidiary registration.
Audited Accounts: A Singapore subsidiary must file audited accounts annually. However, dormant companies may file unaudited financial reports.
Audit Exemption Criteria
All subsidiary companies must file audit report unless it meets the new Audit Exemption criteria for a “small group”. For a group to be a “small group”, the parent and the subsidiary company must meet at least 2 of the 3 quantitative criteria on a consolidated basis:
- aggregate turnover must be not more than SGD $10 million
- the aggregate balance sheet total must be not more than SGD $10 million at the end of the financial reporting period
- the aggregate average number of employees must be not more than 50 at the end of the financial reporting period
Tax incentives for Subsidiary Company
Subsidiary companies incorporated in Singapore can take advantage of the republic’s extensive network of Free Trade Agreements (FTA) and Avoidance of Double Tax Agreements (DTAs). If the company has at least one individual shareholder holding with at least 10% shares of the subsidiary company, the firm is entitled to Zero Tax on the first S$100,000 of chargeable income for the first 3 consecutive years.
Procedure and Timeline for Singapore Subsidiary Registration
The registration of a Singapore subsidiary company is a dynamic process that is conducted online. Foreign companies are required to appoint a professional services firm to setup an entity in Singapore. The registration can be completed in just a few hours, provided that all documents are in order. Registration procedure for Singapore subsidiary is as follows
|1||Complete our full detail online form to expedite the Subsidiary incorporation process||Client||10 minutes|
|The following documents/information are/is required for the registration of a Singapore Subsidiary:
Note: All documents must be in English and any non-English documents must be translated into English.
|Client||Depends on you|
|Upon completion of the above, we will|
|1||Reserve Subsidiary company name||Rikvin||10 minutes|
|2||Prepare necessary incorporation documents||Rikvin||30 minutes|
|3||Sign and return incorporation documents||Client||Depends on you|
|Upon completion of the above, we will|
|1||Incorporate the company with Accounting & Corporate Regulatory Authority of Singapore||Rikvin||20 minutes|
|2||Prepare company documents for bank account opening and handover to the client||Rikvin||15 minutes|
Singapore Work Visas for Subsidiary Company
- If you plan to relocate your management and key employees to Singapore to run their newly setup Singapore subsidiary, we can help you with your EP application.
- Foreign corporations that do not intend to relocate to Singapore to operate the company must appoint a Singapore resident director in accordance with the Singapore Companies Act.
Opening a Singapore Corporate Bank Account
Once the subsidiary company has been incorporated, you may open a corporate bank account with any of the local or international banks based in Singapore.
If you are unable to come to Singapore, you may choose a bank that allows opening of a corporate bank account without your physical presence subject to bank “KYC” ( know your client) due diligence polices.
Post Registration and Compliance
Licenses and Permits: Some business activities in Singapore are subject to regulation by government authorities. Even if your business firm has been registered you cannot begin operation unless you have the necessary approval or license from the relevant government authorities.
Private schools, video companies, travel agencies, liquor distributors, moneylenders, banks, Financial advisers, childcare centres and importers, wholesales and retailers of liquor licenses are some examples of businesses that need permits to operate.
Registered Office Hours: You must have a registered office address and the office must be open to public for minimum of three hours per day during normal business hours on weekdays.
Registration Number: Business registration number issued by ACRA must be on all letterheads, invoices, billings or other documents used for official business communications.
Custom Registration: If your business activities involve import, export and transhipment in and out of Singapore, you will need to register your company with the Singapore Customs and obtain a CR Number or commonly known as Custom Registration. The central registration number is mandatory for Singapore companies or organizations engaged in trading activities.
Singapore Goods and Services Tax Registration: Goods and Services Tax (GST) is a tax on the supply of goods and services in Singapore and on the import of goods into Singapore. Goods exported from Singapore and international services provided from Singapore are exempt from GST. The current rate is 7%.
All Singapore businesses must register for GST if their annual taxable revenue is more than S$1 million, or currently making taxable supplies and the annual taxable revenue is expected to be more than S$1 million. The business is expected to register for GST within thirty days from the time it is deemed liable.
You may also choose to register for GST voluntarily. Approval for voluntary registration is at the discretion of the Comptroller in IRAS. Once approval is given, you must remain registered for at least two years.
Registration of Singapore Central Provident Fund (CPF): The Central Provident Fund or CPF is a compulsory pension fund scheme in which the employer and employee contribute a percentage of the monthly salary to the fund. CPF contribution by the employer is mandatory for all local employees who are Singapore citizens or permanent residents earning more than S$50 a month. The maximum CPF contribution rate for employer and employee is 16% and 20% respectively and can be lower depending on certain factors such as employee age, permanent resident status, etc. CPF contribution for foreign employees is not required.
All work passes employees need not contribute to the CPF.
Ongoing Singapore Company Compliance Considerations
Once your Singapore Subsidiary Company is incorporated, you must comply with the statutory requirements set by Accounting and Corporate Regulatory Authority (ACRA) and Inland Revenue Authority of Singapore (IRAS).