A subsidiary is a separate entity or business. If a foreign business registers a Singapore subsidiary, it will be separate from the foreign business. This means that it will not be liable for things that the foreign business does. For example, there may be legal action taken against the parent company.
As a separate entity the subsidiary is entitled to the generous tax benefits for new business. It may receive low rates and some amounts will be tax exempt for three years. Even after the three years, there are many other tax advantages.
Assets of the parent company are also separate from the subsidiary. This means that the parent company may be forced to pay fines or restitution for things. If so, the subsidiary will not share the responsibility.
There is a big difference between a branch office and a subsidiary. A branch office is essentially an extension of the parent company. If that parent company is foreign, the branch office is subject to the same tax rates as the parent company in another country. A branch office is not separate from the parent company so there are no "new business incentives" available, either.
You might think of a subsidiary as being born from the parent. However, it is now grown and on its own. When it moves to a foreign country, it becomes a foreign business, in essence.
A branch office may be considered like a child of the parent company. It is not grown and the parent is totally responsible for whatever it does.
Things to Remember
When you make a subsidiary registration in Singapore, you will need to remember a few things. The parent company is free to own one hundred percent of the subsidiary. A subsidiary may have as many as 50 shareholders. Also, a subsidiary is required to have one director that is local. However, the director may be someone with permanent residence or a visa.
A new company will need to appoint a secretary that is local. It is also necessary to appoint an auditor within three months of startup. Do not forget that any employees from a foreign parent company must have work visas. It is the responsibility of the company to see to this. A subsidiary will need a certificate of incorporation from its parent company, also.
There are many good reasons to register a Singapore subsidiary company. It is a separate business entity from the parent company. A branch office is not. As a separate business, it enjoys all of the benefits of a new business starting up in Singapore. A branch office does not qualify for these benefits. The parent company may own one hundred percent of the subsidiary. There are other qualifications, to consider also.
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