For foreign companies looking to shift their base in Singapore, setting up a subsidiary company is one of the most sought-after options. Setting up an office in Singapore can be a tedious process. This article will explain the process.
Over the years, clients have started opting for subsidiary companies. For those who are unaware, a subsidiary company is an extension of its parent company. The best part about forming a subsidiary company is that it can work as a separate entity.?
Another advantage of the set-up process is its cost-effectiveness, which helps clients reap the benefits of the growing Singapore economy. Interestingly, a subsidiary company in Singapore limits one’s legal obligations and liability. It also helps in diversifying their risk and reduces hiring or the localization cost. It also allows organizations to take advantage of the existing taxation system in Singapore.?
What should you know before starting a subsidiary in Singapore??
Before you embark on this journey, understanding the requirements for establishing a subsidiary company in Singapore is critical.
Here are the main requirements:
1. A minimum paid capital of SGD 1 is required to set up a subsidiary in Singapore.
2. The company should have at least a director who is a citizen or permanent resident of Singapore and has no criminal records, except directors who are also shareholders.
3. You also need to register your company with the Accounting and Corporate Regulatory Authority (ACRA).
4. Similarly, you need a registered office address and an accepted residential address.
5. Within the first three months, all newly created companies must register their accounts with tax authorities. During this period, an auditor must be nominated. The process is called audit registration, in which you are supposed to submit all audited statements to the tax authorities every year.
Documents needed for application:
Before you start the process, make sure you have the following documents:
- Parent company’s Certificate of Incorporation?
- An extract from the Registrar of Companies shows the current registered address and highlights the parent company’s directors.?
- A corporate resolution authorizing an individual to sign subsidiary documents on behalf of the parent company is essential.
- You also need signed consent to act as a director.
- Address details of the registered subsidiary company in Singapore.
- You may also require articles of association and a memorandum for a subsidiary company.?
The parent company can own 100% of the shareholding of the Singapore subsidiary. A Singaporean subsidiary company must appoint at least one Director who is ordinarily a resident in Singapore. The Director appointed should be at least 18 years old and must not be convicted for any malpractices. They can be citizens, Employment Pass holders or Permanent Singaporean residents.?
Foreign companies planning to relocate their staff from head office to the region can apply for employment passes for them after subsidiary registration. As mentioned earlier, the paid-up capital for setting up a subsidiary company in Singapore is S$1. What sets it apart is the fact that the parent company can be a 100% shareholder.
A Singapore subsidiary should have a registered office in the region. The registered address can be both a commercial and a home address. It would be best if you had a registered office to keep the statutory records of the subsidiary company. Once the incorporation is complete, the directors must appoint someone ordinarily a Singapore resident as a company secretary.
You should appoint an auditor within three months from the registration date of the Singapore subsidiary company. A Singapore subsidiary must annually file audited accounts with Singapore income tax authorities.
The documents submitted during the application process should be in English. You may have to avail of translation services for documents that are not in English.
Singapore has a proven track record of been a robust economy. Setting up a subsidiary company in Singapore can be time-consuming for organizations. However, with the proper guidelines and advice, you can get the procedure done faster than you think, and this is where we step in. We at Healy Consultants can help you set up a subsidiary company in Singapore.?
For more information, you can watch how we incorporated a subsidiary company for a client.