A subsidiary is considered as a separate entity and is eligible for the following tax benefits:
- Income tax exemption on foreign-source dividends
- Income tax exemption on foreign-source service income
- Income tax exemption for new start-ups (if your company satisfies the conditions)
- Benefits under the Double Taxation Agreements
A subsidiary company is a better option for the small and midsize foreign companies, since it offers many benefits and fewer liabilities than a branch office. The following reasons are why most of the foreign companies choose to register a subsidiary:
- A subsidiary is eligible for various tax incentives.
- The liabilities of a subsidiary company do not extend to the parent company.
- A subsidiary does not need to file the parent company’s financial accounts.
- A subsidiary is a separate entity from its parent company, and thus is not restricted to the business activities of the parent company.
Because the entire process is computerized, the actual incorporation of your subsidiary can be done in a few hours. However, there are some considerations which may stretch the timeline to a day or several days. These considerations are:
- Approval of name: The name should be approved beforehand. If there are no objections, you can reserve the name of your under an hour. However, if there is a conflict with an existing name, or if there is need for a review from other authorities, the process can be delayed for a few days or weeks.
- Signing of registration documents: This is a quick and easy process if you are in Singapore, but if you are located overseas, the process can take few days to complete.
- Client due diligence process: From July 2015, the regulations of the Corporate Service Providers in Singapore require that all firms must undergo the process of Know Your Customer (KYC). The time it takes depends upon the complexity of your company’s structure.
Yes, at least one local resident director and one resident company secretary are required for a subsidiary. A resident can be either one of the following:
- A Singapore citizen,
- A Singapore permanent resident, or
- An employee holding an Employment Pass.
If you have trouble finding a resident director, you can use the nominee director services.
No, you don’t need to be in Singapore to register your subsidiary. We can work with you via couriers and emails.
However, if you need to open a bank account, we recommend that you visit Singapore, since majority of the banks here requires an interview with the stakeholders. If you cannot visit Singapore, the interview can be held over phone.
The minimum amount of paid-up capital is $1, and yes, you can increase the amount later anytime.