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Top Reasons To Consider Intermediary Subsidiary Singapore Company Set Up

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By Author: A1 Corp
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The beauty of company formation in Singapore is that both local and foreign entrepreneurs get to decide what kind of business structure they want to register in the country. If you’re a foreign entrepreneur looking for more opportunities in the region of South-east Asia, there are plenty of choices for you to consider that can certainly help you maintain a thriving business in the long run after your incorporation.

One such option is to consider an intermediary subsidiary singapore company set up as part of your plans. Here are some of the top reasons as to why you can consider using companies in singapore as intermediary holding companies:

1. Double Taxation Agreement Benefits
When you examine the current state of events, you’ll notice that some countries do not have tax treaties (double taxation agreements) with other countries. This usually spells trouble for company owners who are looking to handle cross-border transactions since there’s a likelihood they’ll be taxed twice (once in their local country and once in the international country of their choice).

Now if you complete singapore company set up as an intermediary holding company, you’ll be able to get the benefits that come with the multiple tax treaties Singapore actually has concluded with other countries. All you need to do to be considered a tax resident locally is to make sure that the management/control of your company is exercised within local waters through the holding of meetings (for Board of Directors).

2. Taxability (Dividends)
In usual practices, profits are usually distributed to parent companies by subsidiaries through the form of dividends. As a result, there can be certain taxes that are imposed on the receiving of dividends and it is up to the business owner to keep careful track of that. When you set up a company in Singapore to act as an intermediary subsidiary, your foreign dividends can be considered exempt from tax, provided that they can meet certain conditions.

3. Group Relief and Fundraising
More often than not, companies who are planning to develop different sectors for business activities incorporate separate entities for each activity. They then group all of these entities under what is known as an intermediary holding company so that their financial results can just be grouped under this level alone.

When you undergo company formation in Singapore with that in mind, you’ll notice that all the Singapore companies that are tied to your particular group in Singapore can all collectively benefit from the Group relief scheme. This is where you’ll be able to reduce expenditure from trade losses, donations or unutilised capital allowance and such.

These are just some factors to consider when you’re thinking about before you go ahead with company set up in Singapore. Ultimately, choosing to open up a Singapore Intermediary company allows you to have more control over the amount of risks you’re undertaking while saving up valuable capital for other important projects.

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