Registering a Singapore Subsidiary Company: Facts You Need To Know

What is Singapore Subsidiary Registration? If you look up the meaning of "subsidiary", some related words you will come up with will be "secondary", "subordinate", and "supplemental". In applying these related words to the concept of a business, we could understand that a subsidiary company is essentially a company that is being owned, managed or controlled by another company commonly known as the "parent company".



There are various ways to describe the relationship between a parent company and a subsidiary company. One way is when a parent company is the holding company. This means that the primary function of the parent company is to control other businesses instead of concentrating at its own business. In this case, the majority of the shares of the subsidiary company is owned by the parent company. In instances where all of the stocks of the subsidiary company is being owned solely by the parent company, this subsidiary company is called a "wholly-owned" subsidiary.



A subsidiary company has unique features and characteristics. These unique traits attracts many investors and entrepreneurs in putting up a subsidiary company when it comes to business expansions overseas.



One unique trait of a subsidiary company is that it is not necessary to that both the parent company and subsidiary company operate in the same nature of business. Also, it is not necessary that both of them should hold business in the same area or location. If in the event they operate in the same area, they may become competitors but still remain connected with each other. In either way, both companies can benefit from this competition.



Another uniqueness of a subsidiary company is that it has a separate and distinct identity from its parent company. Thus, in case one of them gets involved in a legal action such as bankruptcy, tax delinquency, investigation, or indictment, the other company does not necessarily have to be involved.



How can a business become a subsidiary company? There are two ways: it can be established as such from its inception or it can become a subsidiary by acquisition or purchase. It is possible to gain control over a company’s stocks through purchase of these stocks or through an exchange of stocks with the parent company. A subsidiary company may be constituted by a parent company by forming a new company. In this way, the parent company can still preserve all or part of its stock.

In Singapore, a subsidiary company is known as a private limited company. It has its own corporate shareholders and possesses a legal and separate entity. The parent company for this private limited company may be a shareholder and it may own 100% of the subsidiary’s shares. It may also be a foreign company.



Singapore’s economic health is fast progressing. A strong economic growth is being seen according to the Monetary Authority of Singapore (MAS). A growth of 15% in the economy has been expected by the end of the year. Thus, it is expected that different sectors from trade, industry and business can see an advancing economic progress in Singapore.



The country has also earned the reputation of being the easiest place to do business as its corporate tax rates are relatively lower than most developed countries. Because of Singapore’s positive economic progress and reputation, entrepreneurs can consider setting up and registering a company or a subsidiary company. Singapore gives attractive tax incentives and exemptions to companies, foreign and local. For instance, subsidiary companies can enjoy a tax exemption from its first S$100,000 taxable annual income for the first 3 years from registration. Also, dividends and capital are not taxed. A 9% tax rate is given to a taxable annual income of up to S$300,000.



A separate and independent company can assist a Singapore subsidiary company by providing registration services such as incorporating a company or registering a subsidiary.It can also provide services like processing of working visas for foreign investors.

Having a subsidiary company registered in Singapore is a rewarding investment and brings every aspiring entrepreneur one step closer towards achieving financial success.



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