A Guide to Singapore Subsidiary Company Registration

A Guide to Singapore Subsidiary Company Registration

Establishing a subsidiary company is one of the recommended options for foreign companies looking to establish their presence in Singapore. A Singapore subsidiary may be registered as a private limited liability company whose majority shareholder is a corporate entity. It is the most preferred form of business registration for small to medium-sized foreign companies planning to settle in the country.

This article provides a detailed overview that helps you understand the requirements, procedures, and timeline for setting up a Singapore subsidiary company.  Given the fact that companies to be registered must use the services of a professional firm, our specialists can help you with legal requirements for registering a subsidiary company in Singapore.

 

Benefits of Registering a Subsidiary Company in Singapore

Here are some key benefits that come with subsidiary company registration in Singapore:

  • Foreign companies are allowed to have fully-owned subsidiaries in Singapore. Thus, even after having 100% ownership in a Singapore incorporated subsidiary, the same legal status is granted separate from the parent company.
  • The minimum paid-up capital for a Singapore subsidiary is S$1. The parent company can be 100% shareholder. There is no concept of authorized capital in Singapore.
  • Subsidiaries established in Singapore can benefit from the republic’s extensive network of Free Trade Agreements (FTA) and Double Taxation Avoidance (DTA). 
  • Suppose the company has at least one individual shareholder who owns at least 10% of the subsidiary’s shares. In that case, the company is entitled to Zero Tax on the first S$100,000 taxable income for the first three consecutive years.
  • Subsidiaries can match their fiscal year with their parents to streamline operations.
  • The name of subsidiary companies may be different from the name of their parent companies.
  • Free repatriation of all subsidiary profits and capital is permitted in Singapore.
  • Often, many business activities are not suitable for public disclosure and disclosure requirements. By registering a subsidiary in Singapore, the parent company has the advantage of deciding what business activities should be made public and what should remain private.
  • Singapore subsidiaries can be exempt from auditing if they meet the new Audit Exemption criteria for a “small group.” For a group to be a “small group,” both parent and subsidiary companies must meet at least two of the three quantitative criteria on a consolidated basis:

1) aggregate turnover should not be more than $10 million;

2) aggregate balance sheet totals should not exceed $10 million at the end of the financial reporting period; 

3) the number of employees at the end of each financial year does not exceed 50.

 

Requirements for Setting Up a Subsidiary Company in Singapore

The following documents/information are generally required for the registration of a Singapore subsidiary:

Documents required

  • Parent company establishment certificate;
  • A quote from the Registrar of Companies showing the current registered address and directors of the parent company;
  • Corporate resolution authorizing certain individuals to sign the required subsidiary documents on behalf of the parent company;
  • Passport and residential address details of individuals who will act as directors of Singapore subsidiaries;
  • Signed Consent to Act as Director by each proposed director;
  • Details of the registered address of the Singapore subsidiary; and
  • Memorandum & Articles of Association for the Singapore subsidiary.

Note:

All documents must be in English, and non-English documents must be translated into English. Any professional corporate service provider you engage may require additional documents as applicable.

 

Proposed name of your subsidiary

Before registering your subsidiary in Singapore, ACRA must approve your company name. If the proposed company name is similar to another existing company name,  or unacceptable, or identical to the name proposed by the Minister on its list, ACRA will refuse it for incorporation. 

 

Shareholders

Your subsidiary company must have at least one shareholder of the company who can also serve as a director. According to the Singapore Companies Act, a Singapore Private Limited (Pte Ltd) company can have up to 50 shareholders.

 

Resident directors

Your subsidiary Pte Ltd must have at least one director who is a “regular” resident in Singapore, i.e., a Singapore citizen, permanent resident (PR), or a person holding an Employment Pass/EntrePass or Dependent Pass with a residence address in Singapore.

There is no limit to the number of additional local or foreign directors a Singapore Pte Ltd company can appoint. Directors must be at least 18 years of age and must not be insolvent or convicted of criminal malpractice in the past. The director’s information will appear in public records. Directors can also be shareholders or vice versa. For additional information about the role and responsibilities of a resident director, refer to:

Roles and Duties of Singapore Company Directors

Corporate secretary

A corporate secretary must be a natural person who is an “ordinary” resident of Singapore. The Singapore Companies Act requires every company to appoint a secretary within six months of incorporation. If you don’t know yet, we provide complete corporate secretarial services that will help ensure your company’s regulatory compliance. 

 

Registered Address

Your subsidiary company must also have a registered office address. The registered address must be a physical address and cannot be a PO Box. The use of residential addresses is allowed for certain types of businesses.

 

Procedure and Timeline for Singapore Subsidiary Registration

The Singapore subsidiary registration procedure can be done online, and the process is relatively fast. Foreign companies must appoint a professional corporate services company to establish an entity in Singapore. There are two distinct steps involved in the Singapore subsidiary registration procedure: a) Name Approval and; b) Company Establishment. Both steps can be completed within 1-2 days, assuming all documents are ready and there are no delays in the name approval process.

 

Post-Incorporation Statutory Requirements

Once your subsidiary company has been incorporated, there is a list of statutory tasks to do. Some of them are:

 

Bank account opening

Bank accounts can be opened with any of the local or international banks located in Singapore. If you are unable to come to Singapore, you can choose a bank that allows opening a corporate bank account without your physical presence subject to the bank’s “KYC” (know your client) due diligence policy. For details on bank account opening requirements, procedure, and timeline, refer to:

A Complete Guide to Opening a Corporate Bank Account in Singapore

 

Licenses & permits

Some business activities in Singapore are subject to regulation by government authorities. Even if your business enterprise is registered, you can’t start operations unless you have the necessary approvals or licenses from the relevant government authorities.

 

Annual filing 

As an independent company, your subsidiary must respect the same annual filing requirements as local companies. Under the Companies Act, all companies must file an estimated chargeable income (ECI) form three months before the end of the financial year. The company must also hold an annual general meeting of shareholders. 

One month after the annual meeting, the company must also file an annual return with the IRAS. Please note that there are different requirements for the annual general meeting depending on the registration time of the subsidiary. Also, for certain subsidiaries, audit requirements will apply. For more details, see A Guide to Singapore Company’s Annual Filing Requirements.

For complete information about post-incorporation regulatory requirements, you may refer to:

A Post-Incorporation Guide for Singapore Startups (Part 1)

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