Singapore Subsidiary Company: An Ideal Business Model For Foreign Entrepreneurs
With Singapores strategic location, world-class infrastructure
, highly diverse workforce, good governance, and viable immigration and corporate laws, it has been considered by the international community as one of the best business hubs in the Asia Pacific region.With the countrys eminent reputation, many foreign businessmen, investors, and companies have setup a Singapore company by adopting one of the three business models: representative office, branch office, or subsidiary company.
When it comes to tax benefits and greater freedom to conduct business activities, most experts agree that a subsidiary company is the most ideal structure for foreign companies wanting to engage in a full-blown operation.
These are the advantages of registering a Singapore subsidiary office:
Foreign companies enjoy limited liability
Foreign companies are not legally liable for any losses, liabilities, and debts incurred by their Singapore subsidiary company since the latter is treated as a separate legal entity.
More Business freedom
A subsidiary company can engage in any business activity even if this is not performed by its main headquarter. With this greater business freedom, this structure can maximize its revenue-generating activities.
Several tax benefits and exemptions
Since a subsidiary company is incorporated in Singapore, it enjoys local resident business status and is eligible for local tax benefits and exemptions from its first S$100,000 chargeable income as long as it will meet these qualifying conditions:
Its management and control is exercised in Singapore.
It should have at least one shareholder who has at least 10 percent of a companys issued share or it has no more than 20 shareholders with all of them holding their shares under their names.
It is allowed to be 100 percent owned by foreign companies or businessmen
This business structure allows 100 percent foreign ownership and still enjoys tax exemptions and benefits provided to local businesses.
(Note: The maximum number of shareholders for a subsidiary is 50. Meanwhile, there is no requirement on the percentage of ownership between foreign and local shareholders.)
Better management structure
Since a subsidiary company is legally required to have its management and control performed in Singapore, the board of directors will enjoy greater control and decision-making rights that can have a significant impact to the success of their business.
Meanwhile, it is important to note that it is a requirement to appoint at least one local resident director who may be a Singaporean citizen, or holder of Permanent Residence Status, Employment Pass, or EntrePass.
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