Expanding your business internationally can be a game-changer, and Singapore is one of the most strategic locations to consider. With its pro-business environment, low corporate taxes, and strong regulatory framework, Singapore has become a global hub for companies seeking to establish a presence in Southeast Asia.
Setting up a subsidiary in Singapore offers companies the ability to operate as a locally incorporated entity while retaining full foreign ownership. Whether you’re a growing startup or an established international enterprise, understanding the process and requirements is essential to ensuring a smooth expansion.
In this guide, we’ll walk you through everything you need to know—from legal requirements to step-by-step procedures—to establish a subsidiary in Singapore successfully.
What is a Subsidiary in Singapore?
A subsidiary in Singapore is a private limited company incorporated under the Singapore Companies Act, where the parent company—local or foreign—holds the majority or 100% of the shares. This structure allows the subsidiary to operate as a separate legal entity from its parent company, giving it more flexibility in business operations, liability protection, and tax advantages.
Unlike a branch office, which is considered an extension of its parent company, a subsidiary enjoys autonomy and is responsible for its own debts and liabilities. This makes it an ideal structure for companies looking to minimize risk while establishing a strong presence in Singapore.
Many international firms prefer subsidiaries over branch or representative offices because subsidiaries can conduct all types of business activities permitted in Singapore. They can also benefit from tax exemptions and incentives provided by the Singapore government.
For businesses unfamiliar with the incorporation process, professional company registration services in Singapore can be invaluable. These services help streamline the registration, ensure legal compliance, and handle administrative requirements on behalf of foreign businesses.
Also Read: Setting Up a Singapore Offshore Company
Benefits of Setting Up a Subsidiary in Singapore
Establishing a subsidiary in Singapore offers a wide range of benefits for foreign companies looking to expand into Asia. Singapore’s business-friendly ecosystem, strategic location, and strong regulatory framework make it a highly attractive destination for foreign investment.
1. 100% Foreign Ownership Allowed
Foreign companies can own 100% of the shares in a Singapore subsidiary, providing full control without the need for a local shareholder.
2. Separate Legal Entity
A subsidiary is a distinct legal entity from its parent company. This means the liabilities and obligations of the subsidiary do not extend to the parent, reducing legal and financial risk.
3. Attractive Tax Regime
Singapore offers one of the lowest corporate tax rates in the region, capped at 17%. New startups and subsidiaries may qualify for partial tax exemptions and other tax incentives.
4. Access to a Pro-Business Environment
Singapore is consistently ranked among the easiest places in the world to do business, thanks to its transparent legal system, efficient bureaucracy, and strong IP protection.
5. Gateway to Southeast Asia
With its central location, Singapore serves as a launchpad to the ASEAN market, offering access to over 650 million consumers.
6. Easy Repatriation of Profits
There are no exchange controls in Singapore, which allows for the free flow and repatriation of capital and profits.
7. Government Grants and Incentives
Depending on the industry and business activity, subsidiaries in Singapore may be eligible for grants and incentive programs from government agencies like Enterprise Singapore or EDB.
Also Read: Singapore Companies Act Update 2024
Requirements for Setting Up a Subsidiary in Singapore
Before registering your subsidiary in Singapore, it’s essential to understand the key legal and compliance requirements. These ensure that your entity is properly structured and adheres to Singapore’s regulatory framework.
1. Shareholding Structure
Your subsidiary must have at least one shareholder. This can be an individual or a corporate entity, and 100% foreign ownership is allowed.
2. Local Resident Director
At least one director must be a Singapore resident—a citizen, permanent resident, and possess a local residential address within Singapore. A director must be at least 18 years old, of sound mind, and not disqualified from serving as a director.
3. Company Secretary
Under the Singapore Companies Act, all private limited companies must appoint a qualified corporate secretary within 6 months of incorporation. The company secretary must be a resident of Singapore and is responsible for ensuring compliance with statutory requirements, maintaining records, and filing necessary returns.
Most businesses opt to outsource this role to a professional corporate secretary service in Singapore, especially when they do not have a physical presence or administrative team in the country. These services ensure your company remains compliant with ACRA and avoids penalties.
4. Registered Office Address
Your subsidiary must have a local registered office in Singapore. This must be a physical address (not a P.O. box) where official documents can be served.
5. Minimum Paid-Up Capital
The minimum paid-up capital to register a company is SGD 1, though you may choose to increase this based on business needs or licensing requirements.
6. Company Constitution
Formerly known as the Memorandum and Articles of Association, this document outlines the rules for the governance and operation of your subsidiary.
Also Read: Offshore Company Formation
Step-by-Step Process to Register a Subsidiary in Singapore
Setting up a subsidiary in Singapore is a straightforward process, especially if you’re working with professional consultants or company registration providers. Here’s a step-by-step breakdown of what’s involved:
Reserve Company Name
Start by selecting and reserving a unique name for your subsidiary through ACRA’s BizFile+ portal. The name must not be identical to existing businesses and should not contain prohibited or vulgar words.
- Tip: Use a name that reflects your brand or business activity.
- Timeframe: Usually approved within a few hours unless it requires referral to another government authority.
Prepare Incorporation Documents
You’ll need to prepare and submit several documents, including:
- Details of shareholders and directors
- Registered office address
- Description of business activities (using SSIC codes)
- Company Constitution
- Identification documents (e.g., passport copies for foreign directors)
Working with professional company registration services in Singapore can simplify this process, ensuring all forms and legal documents are correctly prepared.
File with ACRA
Submit your application to the Accounting and Corporate Regulatory Authority (ACRA) online via BizFile+. Once approved, you’ll receive:
- Unique Entity Number (UEN)
- Business Profile
- Timeframe: Incorporation is typically completed within 1–2 business days if documents are in order.
Open a Corporate Bank Account
After incorporation, open a corporate bank account in Singapore. Most banks require:
- Certificate of Incorporation
- Company Business Profile
- Board resolution authorizing account opening
- Copies of passports and proof of address for all directors and signatories
Some banks may require the physical presence of directors or signatories for verification.
Register for Taxes and Licenses
Depending on your business activity, you may need to:
- Register for Goods and Services Tax (GST) if your annual turnover exceeds SGD 1 million.
- Apply for specific business licenses or permits (e.g., for finance, education, food services).
- Enroll employees with the Central Provident Fund (CPF) if hiring local staff.
Also Read: Types of Companies You Can Register in Singapore
Setting Up a Subsidiary in Singapore
The cost of setting up a subsidiary in Singapore can vary depending on the services you use, the complexity of your corporate structure, and any additional licensing or compliance requirements. Here’s a breakdown of the typical costs involved:
The government fees for setting up a subsidiary in Singapore are standardized and include:
- Company name reservation: S$15
- Company incorporation with ACRA (Accounting and Corporate Regulatory Authority): S$300
Beyond the government fees, several other components are involved in the subsidiary setup process:
- Professional incorporation services
- Registered office address
- Company secretary services
- Nominee director services
- Corporate bank account opening assistance
- Legal documentation and filing
- Compliance and regulatory guidance
Pricing for these additional services varies depending on your specific business requirements, corporate structure complexity, and service provider. We recommend discussing your particular business setup needs with us to provide you with a tailored quote and ensure all regulatory requirements are properly addressed for your Singapore subsidiary.
Also Read: How Do You Declare Dividends?
FAQs
1. How long does it take to set up a subsidiary in Singapore?
Typically, it takes 1 to 3 business days to incorporate a subsidiary once all documents are prepared. If name approval or document verification is delayed, it might take longer.
2. Can a foreign company own 100% of a Singapore subsidiary?
Yes, Singapore allows 100% foreign ownership of subsidiaries, making it an attractive location for international companies expanding into Asia.
3. What taxes does a Singapore subsidiary need to pay?
Subsidiaries are subject to corporate income tax (17%) and, if applicable, Goods and Services Tax (GST). There may be tax exemptions and startup rebates for qualifying entities.
4. Do I need to appoint a local director?
Yes, at least one resident director is required by law. This can be a Singaporean citizen, permanent resident, or someone with an eligible pass.
5. What is a corporate secretary service, and why do I need it?
A corporate secretary service handles legal compliance tasks such as filing annual returns, maintaining statutory registers, and ensuring adherence to the Companies Act. Every company must appoint a corporate secretary within six months of incorporation.
6. Can I register a Singapore subsidiary without visiting the country?
Yes, with the help of professional company registration services in Singapore, you can register remotely. Some banks, however, may require in-person verification for opening a corporate account.
