Setting Up a Holding Company in Singapore – 2025 Guide

Singapore has established itself as one of the most business-friendly countries in the world. It has a reputation for a strong legal system, low corporate tax rates, and an ideal location in Asia, which continues to attract entrepreneurs and multinational corporations looking for a safe and efficient jurisdiction to manage their assets.

One of the most sought-after business structures used by investors is a Singapore holding company. A holding company is a parent corporation that owns and controls other corporations without taking part in direct operations. This structure is ideal for managing multiple subsidiaries, attaining tax optimization, and ensuring asset protection.

In this complete guide, we will discuss how to set up a holding company in Singapore, the regulatory compliances, licensing requirements, costs, and the step-by-step process to get started in 2025.

What is a Holding Company?

A holding company is a firm that exists primarily to hold shares, assets, or intellectual property of other firms rather than to operate independently. A holding company manages investments and the financial and strategic direction of its subsidiaries rather than selling products or services.

Holding companies can be classified by their function:

• Investment Holding Company: Focuses on asset ownership in the form of property, bonds, and stocks without participating in business activities.
• Financial Holding Company: Takes over and acquires control of financial service companies such as banks or insurance companies.
• Pure Holding Company: Solely established for the purpose of owning other companies' shares and does not engage in any trade or commerce.

rational Holding Company: Owns subsidiaries alongside conducting some level of business activities.

Some multinational corporations, family offices, and investors use a Singapore holding company to efficiently manage their investments and reap tax advantages. 

Also Read : Holding Company Setup in Dubai

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Advantages of Setting Up a Holding Company in Singapore

Tax-Friendly Regime

One of the most important advantages of a Singapore holding company is its pro-business tax regime. While the corporate tax rate can be as much as 17%, there are various tax exemptions and incentives that lower the effective tax burden on companies considerably.

On top of that, Singapore has signed over 90 Double Taxation Avoidance Agreements (DTAs) so that businesses are not double taxed on the same income when they conduct business in multiple countries. This makes Singapore more attractive to locate holding companies to manage foreign investments.

Asset Protection & Risk Mitigation

A Singapore holding company can help in the separation of business assets and liabilities. If any of the subsidiaries within the holding company face financial problems, the other companies under the structure do not get impacted. The legal separation of assets under such a structure ensures minimum risks and financial stability.

Business Expansion & Market Entry

With the inclusion of a holding company in Singapore, companies gain access to Southeast Asia's fast-growing markets. Singapore serves as a gateway to the ASEAN trade bloc, facilitating easier market entry for companies looking to grow in the region. The country's stable economy and strong trade agreements make it an ideal headquarters for firms with global aspirations.

Strong Regulatory Environment & Investor Confidence

Singapore's strict corporate governance standards and open regulatory framework have rendered it a most trusted jurisdiction to do business. Investors prefer to have holding companies in Singapore due to its history of legal certainty, efficient financial services, and corruption-free status.

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Legal & Regulatory Framework

Laws Governing Holding Companies

The holding company activities in Singapore are governed by some key regulations, including:

• Companies Act: Regulates the incorporation and functioning of all Singapore companies. 
• Financial Holding Companies Act: Regulates those companies that have financial service subsidiaries. 
• Monetary Authority of Singapore (MAS) Regulations: Offers compliance to financial and investment holding companies. 

Holding Company License in Singapore

A Singapore holding company is not required to have a special license if it does not carry on regulated activities such as financial services, investment management, or insurance. Otherwise, companies are required to obtain approval from MAS or other relevant authorities before they can operate.

Compliance & Reporting Obligations

All Singapore holding companies must comply with some regulatory obligations, such as:

• Annual Filings: Filing of financial statements with the Accounting and Corporate Regulatory Authority (ACRA).
• Tax Reporting: Filing of corporate tax returns with the Inland Revenue Authority of Singapore (IRAS).
• Accounting & Auditing: Companies above a specific revenue level are required to comply with Singapore Financial Reporting Standards (SFRS).

Step-by-Step Process to Set Up a Holding Company in Singapore

1. Pre-Application Requirements

Prior to the incorporation of a holding company in Singapore, businesses have to:

• Reserve a company name with ACRA.
• Appoint at least one local director who is a resident of Singapore.
• Appoint a company secretary within six months of incorporation.

2. Establish the Holding Company

Businesses need to submit an application to ACRA via BizFile+, with information including:

• Shareholders and directors' information
• Description of business activity
• Official office address

On approval, ACRA issues a Certificate of Incorporation, which officially incorporates the company.

3. Opening a Corporate Bank Account

After incorporation, firms must open a corporate bank account with a bank such as DBS, OCBC, or UOB. Banks require documents such as:

• Certificate of Incorporation
• Business Profile
• Board resolution to open the account

4. Tax File & Compliance

Firms must file for corporate tax with IRAS and GST (where appropriate). GST filing is mandatory if annual revenue exceeds SGD 1 million.

Holding Company Cost in Singapore

The cost of setting up a holding company in Singapore varies in terms of application fees, compliance costs, and operational fees.

Application Fees

Company Name Reservation: Starts from SGD 15

Incorporation Fee: Starts from SGD 315

Compliance & License Fees

Accounting & Auditing Fees: Starts from SGD 3,000 per annum

Holding Company License in Singapore: Required for regulated financial services

Operational Fees

Virtual Office Fees: Starts from SGD 50 per month

Bank Account Fees: Varies with bank

Challenges & Considerations

Legal & Regulatory Compliance

Singapore has a strict regulatory environment, and failure to comply with tax filings and financial reporting can be penalized. Companies must ensure that they are in compliance with all statutory requirements to avoid legal issues.

Economic Substance Requirements

To benefit from Singapore's tax agreements, holding companies must demonstrate economic substance, i.e., a local office, employees, and business activities in Singapore. 

Banking & Financial Management

It may be challenging for certain foreign-owned companies to open a bank account due to strict anti-money laundering (AML) policies. It can be made simpler by working with a corporate service provider.

Setting up a Singapore holding company is an excellent investment plan for multinational companies and investors who wish to gain optimum tax benefits, protect assets, and expand to overseas markets. The key considerations to remember include choosing the right business structure, complying with tax and legal obligations, opening a corporate bank account, filing for tax incentives and exemptions, and maintaining proper financial records

By aligning with corporate service providers, businesses can enjoy a smooth and hitch-free incorporation while focusing on long-term development and financial success. Seek our professional on-the-ground guidance, contact us via mail at info@radiantbiz.com or WhatsApp & call us at  +971 55 234 7124!

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