Set Up a Subsidiary in Singapore
Updated on Tuesday 02nd February 2021
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The subsidiary is one of the ways in which a foreign company can establish its presence on the market. When business owners set up a subsidiary in Singapore, the parent company has already reached a certain level of development that will require expansion. In practice, the foreign company will own shares in the subsidiary and thus have an important level of control.
Investors who wish to set up a subsidiary in Singapore can set up a private limited company in Singapore. The LLC is the preferred business form in this case as it offers a number of advantages, including fast and easy incorporation.
In this article, we describe the main characteristics of the Singapore subsidiary as well as the incorporation process. Foreign entrepreneurs can always reach out to our team who specializes in setting up a company in Singapore in order to receive more information on how they should proceed.
The key characteristics of the subsidiary
The subsidiary is often chosen as the manner in which a foreign company may establish its operations in Singapore. As opposed to the branch, it does not deem the foreign legal entity liable for its actions and it is much more independent from it. Below, our agents who specialize in setting up a private limited company in Singapore describe the characteristics of the subsidiary that is incorporated as this business form:
- Ownership and control: the foreign company can own 100% of its Singapore subsidiary, allowing it to control part of its activities.
- Registered address: the subsidiary will need to have a registered office in Singapore; it cannot be a home office.
- Management: the subsidiary will have at least one director and there is a requirement for the director to be a Singapore resident.
- Capital: the minimum paid-up capital for the subsidiary set up as a Pte Ltd Singapore is only one SGD.
- Others: among the other requirements we can mention the need to appoint a secretary and follow the general rules for accounting and auditing.
The subsidiary is treated just like any other private limited company in Singapore and it is subject to the same low taxation regime. Because it is treated as a resident company, it will be subject to taxation on its worldwide profits.
As far as the director residency is concerned, the individual appointed as the company director can be a permanent resident, a Singaporean citizen or an individual who has an employment pass. One of our agents can provide you with more details about this particular requirement and can also help you in the process of setting up a company in Singapore.
How to set up a subsidiary in Singapore
Investors need to follow a number of steps in order to open a subsidiary in Singapore. Understandably, when setting up a private limited company in Singapore, the requirements will overlap. Below, we present a short guide for the steps required when opening a subsidiary under this business form:
- reserve the name: the first step when starting a LLC is to reserve the name; this is an easy process, especially when the name is not rejected by the authorities.
- prepare the documents: the incorporation documents for the subsidiary include the Articles of Association and the Memorandum.
- provide foreign company documents: the foreign company will need to provide its certificate of registration along with a set of other documents.
- submission: one of our agents can help investors submit all of the required documents with the Singapore authorities in order to complete the registration process.
In some cases, a special business permit or license will be required. For example, a foreign company that starts a travel agency in Singapore in the form of a subsidiary will need to function as per the requirements set forth by the Singapore Tourism Board. One of our agents who specialize in setting up a private limited company in Singapore can provide more details.
Singapore is an attractive city to foreign investors, as highlighted by the following statistics:
- 1,567,974.0 million SGD: the data for the 2017 foreign direct investment in Singapore, a 15,7% change on a year-on-year basis.
- 157,260.5 million SGD: the overall investment amount from Asia.
- 71,041.2 million SGD: the total investment amount in 2017 from European countries.
As far as the origin of foreign direct investments in Singapore, we can mention Hong Kong (1,101.3 million SGD in 2017), Japan (8,279.5 million SGD in 2017), Taiwan (2,209.3 million SGD in 2017) or The Netherlands (29,795.9 million SGD in 2017), the United Kingdom (7,553.4 million SGD in 2017).
Contact our experts in setting up companies in Singapore for more information on how to open a subsidiary in the form of a Singapore limited company.