Before you hire any employees, you need to learn how to set up a subsidiary in Singapore. The process to establish a subsidiary is based on complex Singapore subsidiary laws.
How to set up a Singapore subsidiary
The subsidiary setup process in Singapore is as follows:
- Obtain approval for your company name and then reserve it.
- Find a registered office with a location in Singapore.
- More than one member, director, auditor, and secretary may be required.
- Hold a company seal. Stamp duties are levied on written documents (as well as electronic instruments) relating to immovable properties, leases, and stocks.
- Open a corporate bank account in Singapore with an institution that has full bank status.
- Sign up to contribute to the Central Provident Fund (CPF) at an insurance agency in Singapore before you hire employees. You will make CPF contributions each month on behalf of your workers.
Singapore subsidiary laws
As a subsidiary, the law requires you to apply online to set up your CPF contribution details. You’ll need your representative’s SingPass and your subsidiary’s Unique Entity Number (UEN). Approval will take around 2 to 3 working days to obtain your CPF contribution details.
Once you get approved, you’ll receive an email and welcome letter containing:
- A CPF Submission Number (CSN)
- Payment Advice Through Form CPF91
- An Application for Interbank GIRO Form
The CSN is particularly important. You are required by Singapore subsidiary laws to quote the CSN during any transactions with the CPF Board when paying your CPF contributions or corresponding with the Board.
As of 2018, all local entities with a UEN must register for a Singapore Corporate Access (CorpPass) to access any of Singapore’s Government-to-Business (G2B) digital services. Subsidiaries with a UEN will continue to use a SingPass, or the Singapore Personal Access gateway, but any new local entities will use CorpPass.
Benefits of setting up a subsidiary in Singapore
Setting up a Singapore subsidiary comes with numerous benefits. You can grow and operate your company beyond your original location while avoiding liability in Singapore.
Your company will control the subsidiary in Singapore. Therefore, the Singapore location decreases its liability by placing it on the parent company. The subsidiary can also operate under a greater degree of independence from the parent company by developing its own values and company policies that align with Singapore’s corporate culture.
Other important considerations
Any time you decide to set up a subsidiary, you should prepare to invest time and money. You’ll need to learn every Singapore subsidiary law, make sure your company representatives feel well-versed on both the nation’s regulations and culture, and travel to Singapore frequently.
While much of the process takes place online, you must find talent, talk to a local payroll company, fill out all government forms, and establish a designated location within the country.
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