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Holding Companies in Singapore

Holding Companies in Singapore

Why set up a holding company in Singapore?

The average incorporation period for setting up a company in Singapore is approximately three days and the requirements are minimal which is why many foreign investors are attracted by the business opportunities the city-state offers.

Holding companies are usually incorporated as private limited companies or subsidiaries. However, the legal services of a Singapore law firm must be requested when opening any type of business in the city.

What are the requirements for setting up a holding company in Singapore?

Foreign individuals or companies wanting to establish a holding company in Singapore must know there are few requirements to be fulfilled. A Singapore holding company must have at least one shareholder and no more than 50.

The shareholder can be a foreign company, as 100% foreign ownership is permitted in Singapore. At least one the directors of the holding company must be a resident or must have a Singapore employment pass. The immigration process in Singapore can contain other requirements in this case. 

The procedure for immigration to Singaporewill vary based on the purpose of arrival. A foreigner who will arrive here for the purpose of investments must respect the requirements for the Singapore Economic Development Board

This is necessary if the person will arrive here under the Global Investor Program, which grants permanent residency to successful applicants. 

Investors who will choose this immigration program can rely on the professional services of our immigration lawyers in Singapore. Our team can present the procedures imposed when participating in this program. 

Please mind that the program covers several types of industries, such as aerospace, medical technology, electronics, logistics, precision engineering, energy, consumer businesses, etc. 

The Singapore holding company must also have a resident secretary that will be nominated within six months from registration. The minimum share capital for company registration in Singapore is $S1 and it can be increased any time after the incorporation.

The holding company in Singapore must also have a registered office that has been approved by the Urban Redevelopment Authority.

What types of holdings can be set up in Singapore?  

The corporate law in Singapore provides for 2 main types of holding companies, as follows: 

  1. the finance holding company;
  2. the investment holding company

The 1st category is set up for the purpose of operating in fields such as banking, insurance and finance, while the 2nd can be used for all other sectors. Please know that there aren’t any specific differences when it comes to the taxation of the 2 categories of holdings

If you are interested in immigration to Singapore for the purpose of starting a business, please know that you must also verify the rules regarding the taxation of individuals. A foreigner will become a tax resident of this country if he or she has his or her residency in Singapore

What are the tax advantages for a holding company in Singapore?  

All companies types benefit from certain tax advantages, created to sustain the development of the respective industry in which they work. The holding also benefits from certain tax advantages. Please know that the registration of the company will impose certain fees. 

In the list below, our lawyers in Singapore have prepared few important matters concerning taxation and fees: 

  • the holding is required to pay corporate income tax, which can be charged at a rate of 0% to maximum 17%;
  • provided that the company is founded by maximum 20 members, certain tax benefits can be obtained;
  • thus, in the above-mentioned case, the members can obtain a tax exemption for the first S$100,000 that they earned;
  • the foreign sourced earnings can be charged with a 0% tax; 
  • the capital gains are also charged with 0%. 

During the incorporation steps, the company must be registered with the Accounting and Corporate Regulatory Authority (ACRA), an institution which handle the registration of all companies founded in Singapore

All persons applying for registration must pay processing fees, which are charged at fixed rates varying from $S50 to $S1,200. 

What are the requirements for company’s directors? 

As stated above, the holding company must have at least 1 director who has his or her residency in Singapore. This is a mandatory requirement. According to the law, residency in this case can be defined as either one of the following situations: 

  1. the director is a Singaporean citizen;
  2. the person has been issued with a permanent residence permit in Singapore;
  3. the person is the holder of one of the 3 types of permits – the Entrepass, the Employment Pass or the Dependent Pass. 

Our immigration lawyers in Singapore can help you obtain more details concerning the requirements for the above-mentioned types of permits. 

Please mind that a shareholder can also be appointed as the director of a holding company. Other than this, the director must comply with the following rules: 

  1. he or she must have an age of minimum 18 years old;
  2. he or she should have a clean criminal record. 

However, we mention that if the company is set up only by 1 shareholder, then the shareholder can’t be director of the company. This rule applies regardless of the residency/nationality of the person. 

If you are a foreign investor, you can address our lawyers for more details on the procedures involving immigration to Singapore

You will receive the full assistance of our immigration lawyers in Singapore for any matter concerning your relocation. You can rely on us if you want to obtain a residence permit in Singapore, become a permanent resident or a citizen of this country. 

Once you relocated here, our law firm in Singapore can represent you in the process of starting a business and running a business. 

You can rely on us for accounting services as well (the company is required to prepare annual returns, submit financial statements and complete audit procedures).  

What documents are required to register a holding company in Singapore?

The first step when applying for the incorporation of a holding company in Singapore is the business name reservation. After the name has been approved it will have 60-day validity.

Together with the approved business name the following documents must be submitted with ACRA (Accounting and Corporate Regulatory Authority):

  • the SignPass;
  • the company type;
  • the shareholders, directors and secretary’s details;
  • the registered office of the holding company;
  • the share capital details;
  • the company’s Memorandum and Articles of Association.

Once the registration procedure is complete, the Companies Register will notify the owners about the successful incorporation and will also provide them with the company registration number.

holding company may begin its business operations in Singapore once it has obtained the registration number, opened the corporate bank account and obtained the Unique Entity Number (UEN). Foreigners who want to open a holding company can address to our lawyers for obtaining the Singapore PR

For detailed information about setting up a company you can contact our lawyers in Singapore. Our team can help you open a branch in Singapore.