Singapore is one of the gems of Asia in more ways than one. Not only is Singapore a beautiful place, but it is also continually ranked as one of the most popular sites in the world for business. That means that Singapore attracts a lot of business people and has an equal amount of business opportunities.
That is why people open holding companies in Singapore all the time. If you are one of those people, you’ve found the right guide. This article will explore everything there is to know about opening a holding company in Singapore.
Why You Should Set up a Holding Company in Singapore
A holding company holds shares of other companies and controls them. Holding companies can own other businesses, intellectual property, or stocks. Whichever the case may be, they usually deal with a lot of taxes. They are usually registered as private limited companies, meaning they have limited liability for their shareholders.
Singapore is one of the few tax havens in the Asian region. Since it has a wide selection of businesses and business opportunities, it is an ideal place to start your holding company. It isn’t an oil-rich country – its economy is prospering solely due to its many businesses.
The gem of Southeast Asia is also known for its many benefits and incentives for holding companies, all of which we’ll discuss below. Singapore is also well known for its financial experts, so setting up a financial holding company there would be more than a worthwhile investment.
Singapore itself is a fantastic place for holding companies, as legislations and regulations are far less cutthroat than in other places – which is one reason why it attracts a lot of businesspeople.
Many companies are moving to Singapore due to its tax haven status, and a lot of them require proper incorporation. Piloto Asia offers Incorporation services for Singapore and covers many more business outsource needs.
What are the benefits of starting a holding company in Singapore?
There are a lot of benefits to opening and registering your company in Singapore, such as:
- Plenty of different business structures
- Affordable taxes
- Simple management from anywhere in the world
- Appealing laws and regulations
- Fantastic flexibility and scalability
- Easy registration and compliance
- Multiple incentives
- Loss insulation
- Asset protection and transaction
What are the incentives for starting a holding company in Singapore?
Singapore isn’t only a fantastic place to do business due to its tax haven status – but due to its many incentives for companies.
There are many programs and incentives out there, but the two most important holding companies are the headquarters incentive and the global tender program.
Below, we’ll explore both in-depth so you can get a better perspective on Singapore’s unique business prospects.
1. Headquarters incentive
The headquarters incentive is one of the more exciting incentives that Singapore has. Companies that have their regional or global headquarters in Singapore can enjoy tax benefits.
Alternatively, companies with their HQ in Singapore can get a five-year-long 15 percent concessionary tax rate on incremental qualifying income from outside of Singapore.
A corporation that promises to exceed the minimum qualifying conditions of the headquarters initiative has some leverage, meaning that the Economic Development Board of Singapore is willing to negotiate for additional tax cuts.
2. GTP incentive
The GTP (Global Tender Program) incentive is another fantastic reason you should open a Singapore holding company.
Companies that participate in this program can benefit from a 10 percent concessionary tax rate on offshore trading remuneration. This program lasts for three years, which aren’t renewable, after which companies can apply for a renewable five-year extension.
As stated above, there are many more incentives, benefits, and programs you can qualify for. To view the full list of these incentives and their respective qualifications, click here.
The Prerequisites of Starting a Holding Company in Singapore
While starting a holding company in Singapore is very easy and straightforward, it will require you to fill some prerequisites before you attempt registration.
To help you get a hold of what you need to do beforehand, we’ve compiled a list of the requirements for starting such a company in Singapore.
1. Initial paid-up capital
If you want to start a holding company in Singapore, you’ll need an initial paid-up capital. This capital can be as low as one Singapore dollar or as high as you like. Since the initial paid-up capital is so low, it is a fantastic place to start a business of any size.
ACRA requires your business to have at least one shareholder. This shareholder doesn’t even have to be a person, as they could be another company as well. Shareholders can be virtually anyone within the company or outside of it.
3. Director and secretary
Any company that started in Singapore, including holding companies, will need a director and a registered secretary based in Singapore. You can hire a nominee director or a secretary service for this if you are a foreigner.
4. A valid local registered address
Every business in Singapore requires a valid and registered company address in Singapore – so make sure to find a suitable location for your company. Aside from this, every business needs to have a mailing address for billing and other purposes, so a physical location is mandatory.
5. A company bank account
Aside from a location, your company will need a corporate bank account. This bank account doesn’t have to be issued by a local bank in Singapore, as multiple international banks will do just fine.
These are all the regulations put in place by ACRA (Accounting and Corporate Regulatory Authority), the central corporate regulatory authority in Singapore. Every company will have to fulfill these requirements if they want to get approved.
Singapore Holding Companies Cheat Sheet
Singapore is a tax haven, and it has many appealing incentives and reasons for you to start your holding company. It has a lot of ways to bend the requirements for your gain.
Not only does the country have low taxes, but it also has DTAAs (Double Taxation Avoidance Agreements) with over 75 countries.
While you need a director and secretary that are Singapore residents, you can always hire a company to get them for you. These are known as nominee directors and secretaries, and they can serve the function until you find someone for the position.
Hiring a nominee director isn’t illegal, and it is a fantastic way to adhere to the Companies Act put in place by ACRA.
Local participation, much like everything else in Singapore, is subject to automation by many companies that deal with integration, such as PilotoAsia.
Singapore also has seamless operations closely tied to ASEAN, a vast market that goes relatively unnoticed by many global megacorporations. If you’re planning on doing any business in the Southeast Asia region with your company, Singapore is by far the best place to root your operations.
The Registration Process
If you want to register a company in Singapore, you’ll have to go to ACRA. ACRA requires you to have a unique company name, so you’ll have to come up with one.
Luckily, your operating name doesn’t have to be the same as your legal name, so you can pick anything you like – you still have free range to choose any name you want for your company.
Registering the company is as simple as possible, and it could be done over the internet. All you need to do is register the company with ACRA – which shouldn’t take more than a couple of hours.
After inputting all of your information in Bizfile, their official web portal for these things, it shouldn’t take more than a couple of days to get approved.
If you are running a larger scale business and have many assets, your application might be reviewed by higher authorities, which will take some more time, which doesn’t usually exceed 60 days. If it does exceed the two-month period, you should contact the authorities, as there might be a mistake in your application.
Well, that is pretty much it. This short guide provided you with all the info you need to go through this process. As you can see, with a healthy dose of diligence and the right information in your hands, you can set up a holding company in Singapore with as few problems as possible.
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Emma Gill is a passionate writer and guest blogger. Writing helps her to improve her knowledge, skills, and understanding of the specific industry. She loves writing and sharing her knowledge mostly in the health industry. She believes health is the real wealth & wants to spread her belief across the world. Apart from writing, she loves traveling and cooking.