How To Set Up A Property Investment Company

Looking for a perfect identify to prepare up an investment holding company?

Ok, we know that this can exist an overwhelmingly hard decision to make. Plus, we bet the stakes are high considering the hereafter of your business substantially depends on the route you'll choose to follow.

And then, how near nosotros assistance yous out? And, in instance you're wondering, the reply is no- we are certainly not the type to aggressively sell y'all a destination. Instead, we make suggestions based on real facts and figures.

Accept, for instance, UNCTAD's Earth Investment Report 2022. A quick skim-through reveals that despite its comparatively small size, Singapore is among the World'due south 5 largest recipients of foreign direct investments. Investors from all over the globe are loving information technology here, and we'll tell you why right subsequently we explain the core benefits and features that come with investment belongings companies in Singapore.

But, earlier we become into that, permit's address the elephant in the room- what the heck is an investment visitor in the first identify?

What is an Investment Holding Company?

Co-ordinate to the Singapore Companies Human action, an investment belongings company or an IHC is a special type of corporate entity that allows investors to generate income directly through real estate belongings or shares in other companies. That means that in add-on to ownership, selling, and renting backdrop, you get to own and run other companies afterward acquiring equity through their shares.

It's worth noting, though, that an IHC in Singapore deals with non-trade activities just. You can't directly use it for any business venture. The almost you can do here is use its subsidiary companies as conduits for establishing and controlling various businesses.

All that comes after registering the IHC with the Accounting and Corporate Regulatory Authority (ACRA), which is Singapore'due south overall statutory say-so when it comes to corporate compliance. Thankfully, information technology allows both foreigners and local residents to set upward an investment belongings company in Singapore, also equally manage information technology for the long haul.

But, that'southward non all. It turns out there are several outstanding benefits fastened to this specific company blazon.

What are the Benefits and Features of Singaporean Investment Property Companies?

Express Liability: A Singaporean investment entity is officially recognized as a distinct entity, complete with its own set up of limited liabilities. Your personal liability here doesn't stretch beyond the amount you lot contribute towards the company's paid-up capital. Consequently, all your personal assets should be safe from whatsoever grade of legal implications that straight arise from the company's liabilities.
Shares: Equity in an IHC is commonly managed in the form of shares. This allows you lot to bring in other parties into the visitor equally shareholders.
Unlimited Overseas Investment Potential: As a foreign investor, you can freely employ the IHC to invest in a wide range of businesses inside Singapore.
Protection From Concern Risks: Since subsidiary companies are treated as limited liability entities in Singapore, an IHC can venture into multiple risky businesses at the same time, and still remain protected from the subsequent risks. Each company's liabilities cannot spread to other subsidiaries or the parent property company.
Tax Incentives: In add-on to its standard depression corporate tax rates, Singapore offers investment belongings companies a range of tax incentives. As a shareholder, for case, your dividends will be exempted from whatever form of tax. Plus, you can wait zip tax rates on all the upper-case letter gains.
Property Buying: Although an IHC cannot straight engage in business organization activities, ACRA allows it to freely acquire, own, and sell existent estate property.
Corporate Structure Flexibility: An IHC tin can be set up upward nether any limited liability corporate structure. However, all things considered, yous might want to register yours as a private limited corporation. This is the structure that offers the best business benefits.
Low Share capital letter: ACRA allows y'all to ready an IHC in Singapore with a minimum share upper-case letter of S$one.

Now, despite all these outstanding factors, it just so happens that Singapore is not the only territory allowing foreigners to register and operate investment holding companies. And then, why exactly should you consider information technology above other potential business destinations?

Why Should You Set Your IHC in Singapore?

Turns out nosotros recently covered this topic in full in our article on Why You lot Should Contain Your Company In Singapore. You can cheque it out for in-depth insights into all the pleasant surprises that await your business in Singapore.

For the sake of clarity though, here's a cursory breakup the principal highlights that yous might want to prioritize as you consider Singapore for your IHC:

Ease of Doing Business: Singapore isn't just friendly to businesses, it'south recognized as the best in the world. This urban center-state has topped the World Bank's Ease of Doing Business Index for more than than 10 years direct.
Solid Legal Framework: Apart from the Companies Human action, Singapore has implemented a wide array of legislations to protect the interests of businesses. If yous always demand to file a patent, for instance, the Intellectual Property Office of Singapore (IPOS) volition facilitate you accordingly.
Bonny Corporate Taxation Rates: It's no undercover that Singapore is widely recognized as a tax haven for businesses. Both strange and domestic companies pay a corporate taxation rate of non more than than 17%, which happens to be one of the lowest in the world.
Tax Exemptions: Singapore doesn't finish at the corporate tax rate. Turns out you'll exist eligible for several tax exemptions in one case y'all gear up up an investment property visitor. You won't, for case, pay any taxes on the company'southward uppercase gains and the accompanying dividends.
Double Taxation Agreements: To save foreign investors from possible echo taxation beyond dissimilar territories, Singapore has signed Double Revenue enhancement Agreements (DTAs) and tax treaties with dozens of countries.
Schemes for Holding Companies: The government of Singapore offers foreign corporations- including investment holding companies- a range of favorable schemes to promote concern growth. The International (IHQ) and Regional Headquarter (RHQ) programs, for example, offer diverse tax incentives to foreigners who choose to move their visitor's headquarters to Singapore.
Stable Political Environment: Historically, Singapore has never gone to war or experienced whatever form of political turmoil. You should be able to run your businesses peaceful without any unforeseen external threats.

Things You Should Consider When Setting Upwardly an IHC in Singapore

Although an IHC in Singapore is registered under the standard corporate structures, it comes with its fair share of unique conditions. You should especially take into account the following:

While an investment holding company has a say in the administrative decisions of its subsidiary companies, it cannot manage their day-to-solar day activities.
A Singaporean IHC tin be set upwardly under civil law structures.
In the event its subsidiary companies dissolve or happen to meet bug, an IHC is protected from all the accompanying liabilities.

What Are The Requirements Of Setting Up An IHC in Singapore?

When it comes to the bodily registration procedure, ACRA will only proceed with the process if your application meets the post-obit minimum requirements. Each investment holding company should have:

At to the lowest degree one resident manager, who should be based in Singapore.
A pre-canonical concern name.
At to the lowest degree one shareholder, who can go alee and double up as the visitor'due south director.
A registered part address that has been reviewed and approved by the Urban Redevelopment Authority.

Additionally, you'll be expected to adhere to requirements that come with your selected corporate structure. For example- if you lot cull to have your IHC equally a private express corporation, your application should be accompanied by an explicit company constitution.

What's Next After Setting Up an IHC in Singapore?

Hats off to yous if you happen to make information technology this far. Admittedly, successful company incorporation in Singapore is certainly worth a toast.

But, don't get carried away. You're simply halfway done. You can merely fully establish the visitor in Singapore later on post-obit up the registration process with:

Corporate bank business relationship registration.
Date of a resident company secretary inside 6 months of incorporation.
Applications for relevant regime business schemes and programs.
Almanac compliance tax filing.

And then on and so forth. The specifics here differ from one instance to another.

Where Should Yous Start?

Since ACRA requires each foreigner to submit their application through a reputable service provider, you can start past getting in touch on with WealthBridge. Our broadly experienced professionals volition guide yous through everything, downward to the last item.