For most corporate titans in the business world subsidiaries have become a profitable extension of themselves while at the same time limiting their liability towards the subsidiary in case it does not perform to as expected. The parent company itself can expand on the variety of business activities it performs and also reach a wider customer base.

Documentation fora Subsidiary Start-Up inSingapore

Certain criteria have to be met within the legal framework of the country for a foreign company to start-up a subsidiary and plenty of paperwork will always be a part of this. Not knowing the documentation needed can slow down the start-up process and cost the parent company unnecessary time and money. There are also further legal requirements such as having one local director (Singapore national) for the company. A foreign company cannot register themselves either due to certain acts passed out by the government so you would require the assistance of a third party professional firm for administration and legal help. You could get a more in-depth view on the services you can make use of on sources such as setting up a subsidiary in Singapore Through proper researchyou could decide on what areas of business you need consultancy in.

Getand What It Means For Your Company

If you know your company would be able to generate an annual income of more than 1 million then you must be aware that Singapore’s own version of VAT tax will applicable to you, so when looking to set up a high-income earning subsidiary take into account the GST deductions from your income so you know exactly where your subsidiary would stand financially from your viewpoint as the parent company. From a customer’s point of view you would end up paying a 7% GST tax for the services you use from such a subsidiary. Hammering down your customers with additional taxes linked to your services can have an adverse impact on your business as they would brand your subsidiary as expensive which in turn would brand the parent company as “expensive” as well. Ensure you know if it is mandatory or not to register to this tax because this can be a decisive factor in your budget. So yeah, seeking advice on this wouldn’t hurt.

Know That Your Capital Is Safe

As a parent company when establishing a subsidiary you need to ensure you very clearly separate yourself as legal entities and separate your assets and stock. Stock from a subsidiary can be offered without putting any of the stock of the parent company in jeopardy. You can afford to take a few more risks in investments with the backing of a subsidiary. In Singapore a subsidiary would need a minimum of just SGD 1.00 of paid up capital to establish itself legally which doesn’t amount to much, though of course a subsidiary should have a substantial amount of initial paid-up capital to be successful. From the limited liability in debts to the comparatively easy registration process for subsidiaries in Singapore this would be a very intelligent and effective business approach for a foreign corporate to invest in provided they get the right people to help them.

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