6 reasons why Singapore

subsidiary company
incorporation works best for
foreigners
As a foreign entity plans to incorporate company
in Singapore, getting confused about which
option to choose for a best long-term business in
Singapore is very much possible. Amongst 3
major options of company incorporation that
exists for foreign companies, Singapore
subsidiary company registration is the best
option for most companies, irrespective of their
size such as small, medium or large or
multinational.

here are 6 key reasons why subsidiary company

in Singapore is best option to choose.
 1.100%foreignshareholdingis
allowed
According to Singapore companies act, 100%
foreign share holding is allowed for a Singapore
subsidiary company. While there is a mandatory
requirement of at least one local Singapore
resident director while incorporation, directors
are not necessarily required to be the share
holders and the share holders and directors of a
Singapore subsidiary company can be different
entities. This flexibility allows foreign companies
to run their business in Singapore.
 2.Assetsofparentforeign
companyaretreatedseparately
While incorporating company as a foreign
entity, one fear that occurs is the liability,
especially a case of debt if arises. Fortunately,
in Singapore, the liabilities of a Singapore
company are based on share capital and not
the assets of the parent company I.E. the
foreign company that has incorporated the
Singapore subsidiary company. Parent foreign
company is not required to declare its assets
and thus are not held liable in any case.
 3.Localtaxbenefitscanbe
enjoyed

Singapore is often cited as a leading example

of countries that continue to have a lower
corporate income tax rates in order to attract
foreign businesses to invest in the Country.
Singapores low tax rate is, in fact, one of the
major reasons that inspire foreigners to
incorporate company in Singapore. Under
Start-up Tax Exemption Scheme (SUTE),
tax exemption is given on normal chargeable income of
up to S$300,000 for each of the first three consecutive
years of operation. In fact, for the first S$100,000, after
100% exemption, the exempt amount is S$100,000.
Then for the next S$200,000, after 50% exemption, the
exempt amount is S$100,000.
Hence the total exempt amount for income up to
S$300,000 is S$200,000.

Subsidiary company in Singapore is usually treated as

resident and is hence can be entitled to enjoying all the
tax benefits that are available to Singapore private
limited companies, including a low corporate tax rate
of 17% as well as the income tax based on the single-
tier system.
 4.ExemptionandGovernment
grantscanbeenjoyed

Since Singapore subsidiary company is given

the status of a local/resident company, its also
entitled for receiving various tax exemptions as
well as government grants that are given by
Singapore government to local (private limited)
companies. This includes different types of
grants offered to companies such as Capability
Development Grant and Enhanced Isprint
Grant.
 5.Minimumpaidupcapitalis
Sgd1
Many countries around the world including Europe
have legal requirements for minimum authorized,
subscribed and paid-up capital that is quite high for
domestic companies. Sometimes their amount is
tens of thousands of Euros.

Fortunately, a Singapore company can be registered

with a minimum paid-up capital of S$1 (Or its
equivalent in any currency). This is a big attraction
for many companies, knowing that they can start
businesses in Singapore easily without having to
invest a huge amount of capital on the onset.
 6.TaxReliefs/exemptionsfor
Singaporesubsidiarycompanies

If the subsidiary company meets the

requirements of tax residency, they can
qualify for certain tax benefits. The
companies can benefit from the tax
exemptions provided under the Avoidance
of Double Taxation Agreements (DTAs).
Singapore has signed with other countries
and tax exemption for new start-up
companies.
Lastly, under section 13 (8) of the Income Tax
Act, a subsidiary company that has tax
residency, can also enjoy tax exemption on
foreign-sourced service income and foreign-
sourced dividends. Government and tax
authorities keep on bringing extra benefits
and advantages for foreign companies time-
to-time which can be applied on Singapore
subsidiary companies.
 Conclusion

While there are at least 3 major company

incorporation options in Singapore, those who
choose subsidiary company registration as the
type of their incorporation receive maximum
benefits as described above. Enjoying these
benefits, however, is only possible if the
respective company files timely annual
financial statements, complies with Singapore
laws and operates a fair business in
accordance with Singapores policies.
The companys management team is required
to be watchful, aware and interested in
grabbing every possible opportunity so that
the maximum funds and advantages can be
availed in the favour of the company.
Precursor has years of proven expertise in not
only highest quality, quick and fully compliant
company incorporation in Singapore, but also
a full range of corporate services after
incorporation such as working end-to-end in
assisting The clients in the various tax
exemptions, government grants and benefits
of other schemes that are applicable.
For More information visit this link:

http://precursor.com.sg/6-reasons-singapore-
subsidiary-company-incorporation-best-
foreigners/
 ContactUs
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