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6 reasons Singapore subsidiary company incorporation is best .pdf



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6 reasons why Singapore
subsidiary company
incorporation works best for
foreigners

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.

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.

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.

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. Singapore’s 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),

tax exemption is given on normal chargeable
income of up to S$300,000 for each of the first
three consecutive years of operation. In fact,
for the first S$100,000, after 100% exemption,
the exempt amount is S$100,000. Then for the
next S$200,000, after 50% exemption, the
exempt amount is S$100,000.
Hence the total exempt amount for income up
to S$300,000 is S$200,000.
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.

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.

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
S$1 (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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