Setting up a holding company in Singapore also comes with a number of tax benefits:
Combined with a pro-business economy and business-friendly environment, Singapore provides a level of certainty for business owners. The political landscape is also relatively stable, guaranteeing a conducive environment for doing business. Taken together, these factors make Singapore an attractive choice for businesses to set up a holding company. In fact, one of the benefits of establishing a holding company in Singapore is the ease with which it can be done. The process is relatively straightforward and can be completed in a relatively short period of time.
To set up a holding company in Singapore, you will need to incorporate it as a limited liability company (LLC), limited partnership, trust or foundation with the Accounting and Corporate Regulatory Authority (ACRA). Do note that you should have the following ready before proceeding with the registration procedure:
With your SingPass and identification number, you can log in to the BizFile+ website and begin the incorporation process. The BizFile+ website will guide you through the necessary steps and provide you with all the forms and documents that you need to complete the incorporation. This will require:
Once you have submitted all the required information and paid the registration fee of $315, you will receive confirmation that your company has been successfully incorporated. You will be issued with a Certificate of Incorporation and a Business Profile. These documents are necessary to open a corporate bank account and manage your holding company in Singapore.
Should you not have a SingPass, you can also engage a registered filing agent under ACRA like Chartsworth to assist with preparing all important documents.
After you have set up your holding company, there are certain compliance requirements that you will need to adhere to. These include keeping accurate records that list all transactions made by the company, filing annual returns with ACRA, and paying corporate tax.
Bear in mind that any income earned by the holding company during the financial year, including dividends and interest, will be subjected to tax. However, if you are an investment holding company, you will be able to enjoy tax deductions for expenses incurred in relation to investments that are not for trading purposes. Expenses are categorised into Direct Expenses, Statutory and Regulatory Expenses as well as Other Allowable Expenses. You can deduct the expenses from the investment income if it falls under:
As an investment holding company, keep in mind that capital allowances cannot be claimed as you are not carrying on a trade or business. Instead, you are allowed to claim for fixed assets purchased to replace existing assets under deductible expenses. It is also important to note that unutilised losses cannot be carried forward to set-off the income of future Years of Assessment (YAs).
Furthermore, you will need to hold an Annual General Meeting (AGM) every year. An AGM is a formal meeting of a company’s shareholders whereby they review the company’s financial statements over the past year and run through other business transactions. As required by Section 201(5) of the Companies Act, the directors of a holding company must also prepare the following 2 reports for the AGM:
When your holding company is registered, you will need to appoint a professional company secretary within six months of incorporation – moving forward. Overall, setting up a holding company can offer many benefits, including enhanced asset protection, tax efficiency, and greater control over the group’s overall business operations. If you are looking to incorporate a new holding company in Singapore, Chartsworth can help to streamline the process for you.
From the preparation of registration forms to the provision of a qualified corporate secretary or nominee director, our company incorporation services can save you time and take care of the paperwork associated with setting up your holding company. Tap into a team of expert professionals who can manage the incorporation process efficiently and effectively. Moving forward, you can also reach out to us for accounting, tax and corporate secretarial services. Get in touch with us today for more information.