What is a holding company?
A holding company is a business corporation or limited liability company (LLC) that is created to buy and own the assets of other companies that it controls. A famous example will be Alphabet, a holding company that owns Nest, Youtube and Google. Holding companies usually do not run any actual business, instead, it owns a portion of interest from the company that it owns. In addition, a holding company can also own other assets such as stocks, properties and trademarks.
Why set up a holding company in Singapore?
To begin with, Singapore is known for its growing economy. With an influx of foreign investments flowing through the economy, there will be benefits towards the local companies such as lower tax rates and steer clear of double taxation. When setting up a holding company in Singapore, it will help contribute to the country’s economic growth so as to keep the economy stable in the long run.
Next, setting up a holding company in Singapore is somewhat simple. This is because once all the fulfilments and criterias are met, the business can be registered immediately. Additionally, finding a workspace in Singapore is also easy because there are numerous business buildings such as EnterpriseOne that are for rent.
Lastly, Singapore has access to a skilled workforce. According to the Global Competitive Index report, Singapore consists of a large population of skilled workers. Thus, this gives an advantage to holding companies that are set in Singapore because they are able to have more opportunities to hire skilled workers.
How to set up a holding company in Singapore?
- To start with, the requirements to set up a holding company are as follows:
- Minimum capital of SGD1
- Minimum of one shareholder that can either be an individual or company
- At least one director that is Singaporean
- At least one company secretary that is Singaporean
- A official registered proof of address for communication
- A bank account of the company
- Companies will have to register or apply to Accounting and Corporate Regulatory Authority (ACRA) which requires approval of the company’s name and register the company with ACRA
- When applying to ACRA, it is done online through its web portal
- This process will take 1-3 working days unless the application is being reviewed by a higher authority. Then, this can take up to two months
Written By: Treshia Siotama Tan