6 reasons why Singapore subsidiary company incorporation is best for foreigners

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6 reasons why Singapore subsidiary company
incorporation works best for foreigners
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• 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 choose.

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 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.

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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 in any case.

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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),

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• tax exemption is given on normal chargeable
  income of up to S300,000 for each of the first
  three consecutive years of operation. In fact,
  for the first S100,000, after 100 exemption,
  the exempt amount is S100,000. Then for the next
  S200,000, after 50 exemption, the exempt amount
  is S100,000.
• Hence the total exempt amount for income up to
  S300,000 is S200,000. 
• 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.

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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 Grant and Enhanced Isprint Grant.

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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 S1
  (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.

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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. 

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• 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.

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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 policies.

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• The companys management team is required 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, government grants and benefits of
  other schemes that are applicable.

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• For More information visit this link
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• http//precursor.com.sg/6-reasons-singapore-subsid
  iary-company-incorporation-best-foreigners/

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Contact Us
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