How to set up a holding company in Singapore?
“Not every company produces.
Not every company lists down services.
Then, how do they earn?”
You must have come across companies that don’t have a particular set of operations, products or services.
But they own shares or assets of a particular company.
Ideally, these companies are defined as an “umbrella” company, and in business terms, these are known as Holding Companies.
Singapore, an ideal business destination, houses plenty of such world-renowned holding companies. And if you are looking forward to setting up a holding company in Singapore, this is the perfect guide.
But first, let’s start with the basics.
How to set up a holding company in Singapore?
What is a Holding Company?
As stated above, holding companies are those which own shares and assets in a company and don’t particularly indulge in providing products or services of their own. These are companies in which they have invested.
Their revenue is generated from the investment made in such companies. They don’t participate in the companies’ daily operations but have a say in their management decisions.
Holding companies can be structured as a Limited Liability Company, Limited Partnership, or a Trust or Foundation. The most popular type is a Limited Liability Company.
The companies in which a holding company invests is known as a Subsidiary Company. If a holding company has complete ownership over a company, it is referred to as a fully-owned subsidiary.
Biggest Advantage of a Holding Company:
The biggest advantage of holding companies is that they get immunity against the subsidiary company’s losses.
The holding company or the parent company can allocate the resources according to the subsidiary’s operations. They make a profit if the company performs well but don’t bear the losses, more than the invested amount, if otherwise.
Some well known holding companies in Singapore:
Being a prime business destination, world-renowned holding companies have set shop in Singapore.
If you looking for some of the best holding companies in Singapore, then here is the list:
- Alphabet Inc
- Goldman Sachs
- HSBC
- Johnson & Johnson
- Berkshire Hathaway
- DBS Group
- Volkswagen
Looking at these names might make you diligently follow your ambition of setting up a holding company in Singapore.
Let’s take a look at why you should set up one.
Advantages for a Holding Company in Singapore:
- Flexible Structure:
Holding companies in Singapore enjoy a flexible structure as they don’t have to adhere to any of the domicile limitations. They can be based out of anywhere to carry out operations in the country.
- Easy Set-up:
Setting up a company in Singapore is the easiest task. Starting from registration to incorporation, each process can be done online. The flexibility of setting up a company is given to people belonging to all kinds of nationalities, whether Singapore residents or foreign nationals.
Just follow a few steps, and you are done.
- Tax Optimization:
Companies registered in Singapore don’t have to worry about double taxations as the company has signed double taxation avoidance agreements with over 80 countries.
As an owner of a holding company, your dividends and interests earned from subsidiary companies can be taxed less or can be exempted from it.
Holding companies in Singapore enjoy a single-tier corporate tax system wherein they will be taxed only once, as per the corporate profits.
Dividends from the subsidiary companies won’t be taxed if the subsidiary company is a resident company or the holding company meets the necessary exemptions. Also, interests earned from a subsidiary company are non-taxable.
You must ensure that your company is structured properly for tax optimization. Companies can still be levied 10% to 17% tax if they don’t fall under the tax treaty.
Furthermore, there is no tax on capital gains, sale of shares, undistributed income and many other parameters.
Exciting advantages, right?
Let’s get your journey started towards setting up a holding company in one of the most business-friendly countries in the world.
What do I need to set up a holding company in Singapore?
Setting up a holding company in Singapore is the easiest and most flexible thing to do.
Following are the requirements to do it:
- One shareholder, either in the form of a company or an individual
- One resident director
- One resident company secretary
- Minimum initial paid-up capital of S$1
- Local Registered Address
- Corporate Bank Account
Albeit the requirements are the same as that of setting up a private limited company in Singapore.
Now that you know the requirements for a holding company in Singapore. Let’s take a look at how you can register your company in Singapore.
How do I register a holding company in Singapore?
If you fulfil the above-mentioned requirements, you can apply with the Accounting and Corporate Regulatory Authority (ACRA) to register your holding company.
You will need to:
- Get your Company Name approved.
- Decide on the Company Structure
- Get a registered address
- Open a Corporate Bank Account
- Register your company with ACRA
The mentioned process can seem like a tough task, but you can do it easily with ScaleX Business.
ScaleX Business shall handle all the necessary paperwork and help you meet the requirements for the registration process.
Just decide on your company’s further business plan and let ScaleX Business handle all the important backend work to help you open a holding company in Singapore.
Best of Luck!
