Subsidiary Company Registration in Singapore

Easy access to Asian markets, low tax rates, an efficient legal system and business-friendly policies make Singapore one of the most sought after places for foreign companies to expand their business. Foreign companies have three options to register their business in Singapore: a representative office, a branch office or a subsidiary company.

This article will discuss the key requirements, and the incorporation procedure of the most popular incorporation option for foreign companies— a subsidiary company.

For foreign companies that want to expand to the Singapore or establish a base of operation in Asia, a subsidiary company provides one of the best business structures to thrive. This article discusses the concept of a subsidiary company, its key requirements, and the incorporation procedure.

What is a Subsidiary Company?

A Singapore subsidiary company is a locally incorporated limited liability company where the majority of the shares are held either by a local or a foreign company.

Unlike a Singapore branch office, a subsidiary company is a separate legal entity from its parent company. If the parent company owns 100% of the shareholding of the subsidiary company, it is often called a “wholly-owned subsidiary company”.

KEY CHARACTERISTICS OF SINGAPORE SUBSIDIARY COMPANY

1. A subsidiary company in Singapore is incorporated as a limited liability company.

2. The subsidiary company has a separate legal identity from its parent company.

3. The parent company’s liability is limited to the capital it invests in purchasing shares in the subsidiary company. The liabilities of the subsidiary company do not extend to the parent company.

4. The business activities of the subsidiary can be the same or different from those of the parent company.

5. A foreign parent company can hold 100% of the Singapore subsidiary company’s shares.

6. Being a local Singapore company, the subsidiary benefits from Singapore’s low tax rates, tax incentives, and bilateral tax treaties, among other assistance schemes.

7. A Singapore subsidiary company is exempt from the annual audit of its accounts if it qualifies as a “small company”. This exemption reduces the company’s compliance costs and its overall regulatory burden thus making it simple and cost-effective to operate it.

Registration Requirements

The key statutory requirements for registering a Singapore subsidiary are as follows:

1. Paid-up capital: A subsidiary company must have a minimum paid-up capital of at least S$ 1.

2. Registered office: A Singapore subsidiary company must have a registered office address in Singapore.

3. Director: The company must have at least one director who is ordinarily resident in Singapore. The director must either be a Singapore citizen, a permanent resident of Singapore, or an Employment Pass holder (an employee of the subsidiary company).

4. Company Secretary: The company must appoint a Company Secretary within 6 months of its incorporation.

Foreign companies must go through a Singapore-based corporate services firm to register. The following information and documents are required during the registration process:

1. A certificate of incorporation from the parent company.

2. An approval from the parent company giving authority to an individual to sign incorporation documents on behalf of the parent company

3. The registered office address for Singapore subsidiary company.

4. The signed consent to act as a director by each of the proposed directors.

5. The passport details and residential information of the subsidiary company’s directors

6. The Constitution of the Singapore subsidiary company.

Registration Procedure

STEP 1: NAME APPROVAL

The Singapore Company Registrar must first approve of the proposed name. A parent company that chooses to establish a subsidiary to expand into Singapore can use a different name.

However, the company name must be unique and not similar to a company name already registered in Singapore. Keep in mind, the Registrar will reject any name that does not follow the naming rules and procedures.

If the proposed company name does not conflict with any of the existing company names, the approval of the name takes around 10-15 minutes.

STEP 2: COMPANY REGISTRATION

After the company name is approved, the foreign company must complete an application form and submit it to the Registrar. The entire registration process is computerized and usually takes 1-2 days.

Once registered, the Registrar sends an email confirming the registration of the subsidiary company and provides the company’s unique registration number.

The Registrar charges a fee (currently set at S$315) for registering a new company in Singapore. The current fee includes a name approval fee of S$15 and registration fee of S$300. This fee does not include fees charged by the corporate services firm that you must hire to assist you with the registration.

On-Going Compliance

A Singapore subsidiary company is required to comply with annual filing requirements that are applicable to Singapore companies. Among the key requirements are:

1. Annual Return filing with Singapore Company Registrar.

2. Annual Tax filing with Singapore Revenue Authorities.

3. Keeping company information (shareholders, directors, registered office address, etc.) up to date with the Company Registrar.

4. Registration for Goods & Services Tax (GST), if applicable.

5. Compliance with applicable laws such as Employment Law, Personal Data Protection Law, etc.

Conclusion

Subsidiary companies are the preferred form of business structures for foreign companies who wish to set up their business presence in Singapore. Such a business structure not only offers liability protection to the parent company, it also enables the entity to benefit from tax breaks and other assistance schemes offered by the Singapore government.