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
 1. 100% foreign share
holding is 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. Assets of parent foreign
company are treated separately

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
 3. Local tax benefits
can be 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. Exemption and Government
grants can be enjoyed

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 Grantand
Enhanced Isprint Grant.
 5. Minimum paid up
capital is Sgd 1
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. Tax Reliefs/exemptions for
Singapore subsidiary companies

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
The companys management team
isrequired 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,
For More information visit this link:

http://precursor.com.sg/6-reasons-
singapore-subsidiary-company-
incorporation-best-foreigners/
 Contact Us
Address:60 Albert Street
#14-04 OG Albert Complex
Singapore

Zip Code: 189 969

Phone No: (65)6336 5500