How to Set Up a Holding Company in Singapore

What is a Holding Company?

A holding company, often referred to as a parent company or umbrella company, is an entity primarily designed to own and control other subsidiary companies. While it typically does not engage in active business operations itself, it holds significant ownership stakes in various subsidiaries, allowing for centralised management and strategic decision-making.

Why Choose Singapore for Your Holding Company?

Singapore has emerged as a preferred destination for setting up holding companies, thanks to several compelling advantages:

• Tax Efficiency: Singapore boasts a favourable tax environment, with attractive tax rates on capital gains and foreign-sourced dividends. Companies in Singapore are subject to a flat corporate tax rate of 17% on all taxable income.
• Asset Protection: Holding your assets and investments under a separate legal entity can provide an added layer of protection and risk mitigation.
• Global Treaties: Singapore’s extensive network of Double Taxation Agreements (DTAs) and Free Trade Agreements (FTAs) makes it an ideal hub for businesses engaged in international transactions.
• Streamlined Operations: The holding company structure simplifies ownership and resource allocation among subsidiaries, enhancing overall efficiency.

Can a holding company be 100% foreign-owned?

A holding company can be 100% foreign-owned. However, if you’re a foreigner establishing a holding company in Singapore, there are specific considerations:

• • Your company must have a registered physical office address in Singapore.
  • At least one of the directors of the company must be a local resident in Singapore.
  • Your company must possess a minimum of SGD 1 in issued share capital.
  • As the entire application process is completed on BizFile+ with SingPass, you will need to engage the services of a registered filing agent to submit the application on your behalf.

Can a holding company operate under a different business name from its subsidiary companies?

A holding company can choose to operate under a different business name than its subsidiary companies. However, it’s essential to obtain approval from ACRA for the chosen business name for your holding company. ACRA may reject the application if the name is already in use by another business.

Setting up a Holding Company in Singapore

1. Company Registration Process

To establish a holding company in Singapore, you must follow these key steps:

• Business Structure Selection: Choose the most suitable business structure for your holding company, often a private limited company.
• Company Name Reservation: Ensure that your chosen company name is unique and available for registration.
• Register with ACRA: Submit the necessary documents and information to the Accounting and Corporate Regulatory Authority (ACRA) for company registration.
• Compliance with Regulations: Comply with Singapore’s corporate regulations and meet the criteria for a holding company.

2. Tax Planning and Strategy

Implement tax-efficient strategies for your holding company, such as leveraging Singapore’s tax treaties, optimising capital gains, and managing dividends effectively. Like all Singapore-incorporated companies, holding companies may also be eligible for certain tax benefits and exemption schemes. 

3. Subsidiary Operations

Once your holding company is established, you can set up subsidiary companies both in Singapore and abroad, streamlining business operations and ownership. It’s useful to note that a subsidiary may engage in different business activities from the holding company.

This would actually be one of the strengths of setting up a holding company – being able to consolidate and manage different subsidiaries engaging in different business activities under one corporate structure.

4. Ongoing Compliance

Ensure ongoing compliance with Singapore’s corporate laws, financial reporting, and taxation requirements to maintain the benefits of your holding company structure.

Summary

Setting up a holding company in Singapore can provide your business with a competitive edge, asset protection, and tax advantages. By grasping the fundamentals and following the prescribed procedures, you can navigate the dynamic local business landscape with confidence.

Establish your holding company in Singapore and unlock new opportunities for growth and expansion. Speak to us directly on our chatbot, email us at [email protected], or contact us using this form.

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