Most individuals want to set up a subsidiary for strategic purposes; maybe they want to venture into new markets, start selling new products, or pursue a new brand name to see how it can draw in new forms of consumers. Whatever the reason, let us help you determine if it is the right choice for you to set up a subsidiary company. With the support from a professional company incorporation service provider in Singapore, you’ll be able to set up your subsidiary in no time and without too much trouble or paperwork.

Why Set Up a Subsidiary?

A subsidiary is a legal body and is independent of the parent corporation. It further suggests that the holding corporation, or its subsidiary, is not directly responsible for its debts. Therefore, if the subsidiary becomes insolvent, the obligations and risks of the parent entities may be restricted to the subsidiary’s properties, and creditors may be prohibited from seeking directly from them.

Since their administration takes place centrally, subsidiary company incorporation is also called state tax-residents. This ensures that, by forming branches in Singapore, international firms would take advantage of Singapore’s competitive corporate tax regime.

What is a Subsidiary Company?

A subsidiary is company-owned or operated by a company. The parent corporation would usually hold over 50 percent of the subsidiary company. This brings the subsidiary’s majority stake to the parent company. It is precisely by being the largest shareholder that power can be gained in certain cases. It is regarded as a wholly-owned subsidiary where a parent corporation holds all its common shares.

What To Do After Setting Up A Subsidiary?

The new division would operate as a separate legal body from its parent company until incorporation. It is also proposed that a new corporate bank account be opened for proper financial accounting under the subsidiary’s name. It will be appropriate for the new subsidiary to apply for some industry licenses to work in some sectors, such as the Food and Beverage industry. The subsidiary must, under its name, apply for the license itself.

Foreign parent companies can also, under the new subsidiary, apply for good job passes or permits to move foreign workers to work in Singapore.

Registration Requirements

• A subsidiary company must have at least $1 minimum paid-up capital.
• Singapore company incorporation must have a Singapore registered office address.
• The company must have at least one director who usually resides in Singapore. The director of the company must be a citizen of Singapore or an employee of the subsidiary company.
• The company shall name a Company Director Within six months of its incorporation.

Then the papers you will be expected to send after the formation of the subsidiary company include:

• Parent’s certificate of incorporation 
• Constitution of the parent company, 
• A signed declaration of each director consenting to serve as director of the subsidiary
• Copies of identity documentation of the named directors
• Proof of residential addresses of the named directors
• Proof of physical address of the affiliate
• The confidential information of the director of the firm
• A shareholder contract

Subsidiary companies are the chosen type of corporate arrangement for international companies seeking to develop a foothold in Singapore. Such a corporate arrangement not only provides the company incorporation in Singapore with liability insurance. It also helps the entity benefit from tax cuts and other assistance programs supported by Singapore’s government.