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Singapore Subsidiary Office
Singapore provides new businesses with one of the most corporate tax rates in the world along with the necessary incentives to succeed. With a business-centric environment, companies are encouraged to grow and prosper in Singapore.
The Subsidiary Company is an option for foreign businesses that wish to expand their presence globally. This comes with benefits such as tax savings and asset protection. It is similar to the Private Limited Company business form, however, the main difference is that the parent company is the shareholder of the Subsidiary Company’s formation
What is a Subsidiary Company?
A Subsidiary Company carries the same legal nature to that of a Private Limited Company: A standalone legal entity that protects the personal assets of the parent company’s founding members from losses that are associated with the business. The Subsidiary business form is well suited for established foreign companies that are planning to acquire the major part of the Subsidiary shares. This form of business also acts as a launchpad for foreign businesses that wish to expand their reach into the Asia-Pacific market.
- Separate legal entity: The company is considered a legal entity on its own and business owners will not be touched for their assets, personal possessions in the event the company faces a lawsuit or debt. This applies to the directors and shareholder’s as well. The company is limited with the funds they contributed to the company’s paid-up capital in the beginning.
- Shareholder Expansion: The parent company holds 1 share amongst the 50 members. The other 49 are reserved for people who are interested in investing to expand the company.
- Shareholder Characteristics: Up to 50 members are allowed to hold shares in the company (including corporate ones); the minimum is 1 (the parent company). The Subsidiary’s operation or existence is not defined key shareholders; if key shareholders decide to sell their shares, resign, face bankruptcy or death, the Subsidiary functions as per normal within the frame of its shares.
- Transfer of ownership: Subsidiary Companies enjoy flexibility and vitality because of the ease of transfer of ownership. Ownership can be transferred either partially or wholly without disrupting operations or the need for complicated legal documentation and procedures. This is achieved through the selling of shares or part thereof to another individual.
- Augmentation of paid-up capital: New shares can be issued to change the amount of paid-up capital.
- Trusted image and branding: Using an incorporated business form allows your business to be branded in a credible image compared to a sole proprietorship or partnership business. This inadvertently creates a sense of trust amongst potential investors who might give them the push to invest into your business. In addition, banks are also more inclined to process loans if needed due to the limited liability characteristic
- Registration: Any person (or foreign company) is allowed to register for a Subsidiary, but he/she is required to submit a document called the Memorandum and Articles of Association which clarifies facts such as the Subsidiary’s name, its share capital and how the company is going to limit their members’ liabilities.
- Clarification: Before opening your subsidiary, please clarify if your area of business requires any specific regulatory documentation under the governmental Companies Act with our immigration specialist.
- Distinct legal entity: Subsidiaries are considered distinct legal entities and are responsible for its acts within the scope of its share capital. Basically, subsidiaries are responsible for the actions carried out by shareholder members.
- Wound up procedures: In the event of a closure, Subsidiaries are to be wound up according to certain legal procedures.