Singapore Company Incorporation

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22.02.2019 Friday Singapore Company Incorporation: A Handy Digest for Foreigners

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Singapore has managed to establish itself as one of the most attractive business destinations in Southeast Asia only in a just few decades. A plethora of attributes such as strategic location pro- business policies forward-looking government robust economy Aspirants from all parts of the globe flock to Singapore in the pursuit of building their entrepreneurial career and established businesses wish to make their presence felt in this globally acclaimed entrepreneurial hub by setting up their bases over there. Every year Singapore witnessed a massive influx of foreign entrepreneurs who intend to build their businesses in the soils of the city-state. The government of the Republic also encourages the young and experienced talents to come and contribute to their economy. As a result authority of Singapore ACRA Accounting Corporate Regulatory Authority who regulates the process of company incorporation Singapore has introduced three registration options for foreigners. 1. Subsidiary Company 2. Branch Office 3. Representative Office 1 Subsidiary Company: A Singapore subsidiary is a locally incorporated private limited company whose major shareholder is a foreign company. It is the most preferred option for company incorporation for mainly the foreign small and medium business who wishes to expand their business beyond their native country. It is a separate legal entity that is distinct from its shareholders. It can own assets and property in its name and can sue or be sued in its name. A subsidiary has perpetual succession. It is considered to be a local tax resident of Singapore and can enjoy all tax incentives available for local companies. Limited liability is the best thing about Singapore subsidiary. The parent company is not entirely liable for the loss and debts incurred by its subsidiary. Liability of the parent company is limited to the amount invested in buying the

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shares. Similarly the name of the subsidiary can be different than that of the parent company. A subsidiary of a foreign company has to be registered with ACRA before commencing its operation. A Few Things to Consider During Company Incorporation in Singapore Subsidiary: 1. Company name approval has to be done before filing the registration application. 2. The percentage of shares held by parent company can be 100. Having one major corporate shareholder is a must. 3. A subsidiary must appoint a local director who is an ordinarily resident in Singapore that is citizen PR Permanent Resident or holder of Employment Pass. 4. A local registered office location has to be present. 5. The minimum paid up value required to set up a subsidiary is SGD1. 6. The Memorandum and Articles of Association of the parent company has to be submitted during company incorporation Singapore. 7. A company secretary has to be appointed within six months from of the incorporation. 2 Branch Office: Despite the popularity and advantages of the subsidiary many foreign corporations financial institutions like bank and insurance companies often prefer to open a branch office. It is an extension of the foreign company and is not separate from its parent company. The name of the branch office has to be same as its parent companys name. The liability of the parent company is unlimited and has to bear all loss and debts incurred by its branch. Unlike subsidiary a branch office in Singapore is not considered as local tax resident and thus cannot enjoy the tax benefits available for local companies. 3 Representative Office: Representative Office is an interim entity that is used for conducting market research activities feasibility studies and liaison work on behalf of the parent company. A representative office in Singapore is not allowed to perform any direct or indirect profit-generating activities. Now that you know that each of the company incorporation Singapore options available for foreigners you can easily figure out the best-suited company structure for your company. Be sure to know your business needs and requirement before taking the final decision. It helps you ensure a successful journey in the city-state.

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