- Osome Blog SG
- A Guide to Setting Up a Holding Company
A Guide to Setting Up a Holding Company in Singapore
- Modified: 20 January 2026
- 5 min read
- Company Registration
Heather Cameron
Author
From expert guidance and helpful accounting tips to insights on the latest trends in fintech, Heather is here to empower entrepreneurs and small business owners in Singapore with great content. With a background in digital marketing spanning eight years, she has experience writing for various industries and audiences. As Osome’s copywriter, she’s here to inform and inspire our readers with great storytelling.
Nisah Rahim
Reviewer
Nisah Rahim is our go-to expert reviewer for all things Corporate Secretary-related in Singapore. As the Corporate Secretary Team Lead and content reviewer, Nisah meticulously examines our blog posts to ensure we provide comprehensive information on Corporate Secretary services such as local regulatory compliance, managing board meetings, maintaining company records, and providing expert advice on corporate governance matters.
Imran Marican
Reviewer
Imran Marican, ATA SCTP member, is our Corporate Tax Assistant Manager based in Singapore, with almost a decade of experience in Singapore corporate tax. With in-depth knowledge of Singapore corporate tax law and regulations, he can help with corporate tax compliance that matters to every company. While our business writers transform complicated tax jargon into easy-to-understand concepts, as a reviewer for the Osome blog, Imran ensures our content is accurate and relevant, helping our readers boost their businesses with helpful tips and insights.
A holding company is an ‘umbrella’ or ‘parent’ company which does not provide products or services like a normal company. That’s what makes it relatively easier to set up a holding company from virtually anywhere in the world. If you are considering starting a holding company, we will go in-depth on what it is, what you need and how to register your own holding company in Singapore.
Key Takeaways
- Singapore offers a straightforward process for establishing a holding company structure, with minimal requirements like a resident director, a company secretary, and a local address.
- Singapore’s attractive tax system includes exemptions on foreign-sourced dividends for tax-resident companies, no tax on capital gains where the gains are not considered trading in nature, and a low corporate tax rate that can be further reduced through various schemes.
- Holding companies provide liability protection, ensuring that if a subsidiary company fails, the holding company isn’t held legally accountable for its losses.
What Is a Holding Company?
A holding company is an entity that owns stock, shares, or assets in other companies, unlike a normal company that earns from its sales of goods and services. In other words, your holding company, acting as a parent company, will be investing in other companies, and that is where your revenue will come from. A holding company structure exists to control other companies and have a say in their management decisions as a parent company.
A holding company can be a:
- limited liability company
- limited partnership
- trust or foundation
It can also have complete ownership of a business but does not participate in that business’s daily operations. Alternatively, a holding company will only be overlooking that business’s management decisions. If your holding company fully owns another business, the second business will be referred to as a wholly-owned subsidiary.
Why should you even consider starting a holding company instead of a typical company, then? Well, Singapore holding companies enjoy the benefits of protection from losses even if there is a crisis in the subsidiary company.
Example
Let’s say Forgively Group is the holding company and Hapyy Pte Ltd is its subsidiary. If Hapyy Pte Ltd goes bankrupt, Forgively Group may experience a capital loss and a decline in net worth. However, the Hapyy Pte Ltd’s creditors cannot legally pursue the holding company for remuneration. Nonetheless, if the subsidiary company performs well, the holding company benefits as well.
Comprehensive company incorporation
Incorporate your company and get an Osome corporate secretary to ensure you comply with laws and regulations from the get-go.
Main Characteristics of a Holding Company
A holding company in Singapore is primarily established to own and manage shares or assets in other companies, acting as a parent entity that oversees its subsidiaries. Unlike operating companies, its main focus is on ownership and control rather than direct business activities. This structure allows the holding company to influence its subsidiaries’ strategic decisions effectively.
Key benefits of setting up a holding company in Singapore include:
- Limited liability protection for shareholders, safeguarding personal assets from business liabilities.
- Tax benefits, such as no tax on capital gains where the gains are not considered trading in nature, and a low corporate tax rate.
- Eligibility for specific incentives, including exemptions on foreign-sourced dividends for tax-resident companies and gains from the sale of shares under the Participation Exemption.
The primary source of revenue for a holding company typically comes from dividends or capital gains generated by its investments. A parent company may hold multiple subsidiaries across different industries, creating a diversified portfolio.
As with all Singapore companies, a holding company must comply with statutory requirements, including filing annual returns, appointing a company secretary, and maintaining good corporate governance.
Types of Holding Companies in Singapore
Singapore holding companies can be broadly described based on their primary function. The main types are Investment Holding Companies (IHCs) and Operating Holding Companies. A separate category, Financial Holding Companies (FHCs), applies only to regulated financial groups.
Investment Holding Company (IHC)
An Investment Holding Company (IHC) is set up primarily to own and manage investments such as shares, bonds, real estate, and other financial assets. Instead of actively engaging in business operations, its role is to generate income through dividends, interest, or capital gains.
Key characteristics:
- Primarily holds investments rather than carrying out trading or offering services.
- Benefits from Singapore’s tax regime, including no capital gains tax.
- Must comply with statutory obligations, such as filing annual returns and appointing a company secretary.
All investment income of an Investment Holding Company (IHC) in Singapore is assessed on a financial year basis. To estimate the income subject to tax, IRAS provides worked examples (PDF, 412KB) and templates that can serve as a guide:
- Basic Format of Tax Computation for an IHC (PDF, 579KB)
Operating Holding Company (OHC)
An Operating Holding Company owns subsidiaries that carry out active business operations. It often provides centralised management, strategic guidance, or shared services to its subsidiaries.
Key characteristics:
- Owns controlling stakes in operating subsidiaries.
- Engages in some level of business activity or administrative functions.
- Supports group-level management, coordination, and consolidation of financial reporting.
- Subject to the same regulatory requirements as all Singapore companies, including annual returns and statutory audits if thresholds are met.
OHCs are useful when managing multiple subsidiaries, but remember that any active business carried out may trigger additional compliance requirements, such as annual audits if revenue thresholds are exceeded.
Financial Holding Company (FHC)
A Financial Holding Company is a MAS-regulated entity that holds shares in financial institutions, such as banks, insurance companies, or capital market firms.
Key characteristics:
- Exists within the framework of the Monetary Authority of Singapore (MAS) regulations.
- Must comply with capital adequacy, reporting, and prudential requirements set by MAS.
- Typically not used for ordinary corporate groups; the term is specific to regulated financial entities.
Expert company secretarial services
Let our experienced team handle your company secretarial tasks with precision and professionalism. From annual filings to corporate governance, we'll keep your company compliant and running smoothly.
Examples of Holding Companies in Singapore
Singapore is a hotspot for holding companies. Therefore, it is no surprise that some of your popular brands have holding companies and subsidiaries in Singapore. Remember, holding companies may also own property such as real estate, stocks and other assets.
Examples of well-known brands with a holding company in Singapore:
- DBS Group
- Singtel
Examples of brands with one or more subsidiaries in Singapore:
- Alphabet
- Volkswagen
- Johnson & Johnson
- Citigroup
One example of a very well-known holding company is Berkshire Hathaway, which you probably would be familiar with if you’ve heard of Warren Buffet. Berkshire Hathaway owns assets in over one hundred public and private companies and holds them as investments. These companies include Duracell, Dairy Queen, The Coca-Cola Company, Apple, IBM, American Express and more.
Advantages for a Holding Company in Singapore
1 Relatively easy to set up
Setting up a holding company structure in Singapore is notably straightforward and efficient. The entire registration and incorporation process can be completed online, making it accessible for both locals and foreigners. This user-friendly approach to holding company formation means that anyone interested in establishing a business in Singapore can navigate the necessary steps with relative ease. The streamlined procedures are designed to facilitate entrepreneurship, enabling individuals to focus on their business operations rather than getting bogged down by complex bureaucratic requirements.
To make your life simpler, here at Osome, we can help you to incorporate your company just by following a few simple steps and providing all the necessary information.
2 Save on corporate taxes in Singapore
One of the most significant advantages of establishing a holding company structure in Singapore (whether it is a limited liability company or a private limited company) is the potential to save on corporate taxes compared to other countries that implement a worldwide taxation system. In Singapore, a holding company can operate without the constant concern of double taxation, provided it meets specific conditions, such as earning foreign-sourced income that is not remitted into Singapore. This favourable tax environment allows businesses to focus on their day-to-day operations while retaining more of their earnings, facilitating growth and reinvestment opportunities.
3 Double Taxation Agreements (DTAs)
Singapore has a signed agreement with over 80 countries. What this means for you as an entrepreneur with a Singapore resident holding company is that dividends, interests and royalties paid from subsidiary companies can enjoy reduced tax rates or even be exempt from tax obligations.
Things to note
- Your subsidiary company should be located in the treaty counties.
- Your holding company must be considered a tax resident in Singapore.
A holding company is generally regarded as a Singapore tax resident if its control and management are exercised in Singapore, meaning that strategic decisions on the company’s policies and direction are made there.
Corporate Tax Assistant Manager
4 Single-tier corporate tax system
It means that:
- You will only be taxed once for corporate profits.
- There will be no tax liability on the dividends you earn from your subsidiary companies, assuming that the subsidiary company is a resident company or that your Singapore holding company meets the conditions for exemption due to foreign sources of income.
- No withholding tax on dividends issued to residents or non-residents.
- No withholding tax on interests earned from subsidiary companies or parent companies.
Keep in mind that royalties and certain service fees paid to foreign companies may still be subjected to 10% and 17% tax if the tax rate is not reduced under a tax treaty. Therefore, you must ensure your companies are properly set up to make use of the tax benefits.
5 No tax on foreign-sourced income
A Singapore tax-resident holding company benefits from no taxation on foreign-sourced income, including dividends from subsidiaries, provided the subsidiaries are taxed at least 15% in their country of incorporation. If this threshold isn’t met, dividends may incur a tax liability when distributed to the holding company. Additionally, undistributed income from foreign subsidiaries typically remains untaxed, enhancing the holding company’s financial positioning as a parent company and allowing for smoother day-to-day operations.
6 No tax on capital gains
Another attractive feature of Singapore holding companies is the absence of capital gains tax. Profits from the sale of shares are not subject to tax if they are deemed capital in nature rather than trading income, allowing business owners to reinvest or distribute profits without additional tax burdens. This characteristic contributes significantly to the overall financial efficiency of the business structure, enabling parent companies to maximise their resources and foster growth.
7 Attractive tax rate
Singapore is renowned for having one of the most competitive corporate tax rates globally, currently set at a marginal rate of 17%. Additionally, various incentives and tax schemes can effectively reduce this rate further, making it highly appealing for businesses looking to establish a presence in the region. This favourable tax environment attracts both local and international investors, positioning Singapore as a prime location for setting up holding companies and promoting economic growth.
8 Asset protection
Establishing a holding company structure offers significant asset protection against many liabilities incurred by subsidiary companies, though tax liabilities may still present risks under certain circumstances. While financial statements may still reflect losses, the holding company itself is not generally legally responsible for these losses, providing a layer of security for your investments. Singapore’s legal framework supports this asset protection structure, ensuring that most risks associated with subsidiary operations do not adversely impact the holding company. However, it is essential to remain aware of potential exceptions, such as cases involving fraud, negligence, or unpaid tax liabilities, which could affect the level of protection offered.
Get our free pre-incorporation checklist
A step-by-step checklist to get organised before incorporating your new business
Requirements for Registering a Holding Company in Singapore
It is easy and straightforward to register a Singapore holding company. Most entrepreneurs would choose to use a private limited company or a limited liability company.
Here are the requirements for registering your Singapore holding company:
- At least one shareholder (this can be an individual or a company)
- At least one local director (must be a resident of Singapore and be over 18 years of age)
- At least one resident company secretary
- Minimum initial paid-up capital of S$ 1
- A local registered physical address for official communication
- A corporate bank account
By the way, if managing your finances feels overwhelming, we offer comprehensive accounting services to keep your business running smoothly. We also assist with securing a company secretary, your office address, and a corporate bank account, so you can focus on growing your business without the administrative burden.
How to Set Up a Singapore Holding Company
Registering a holding company in Singapore is a streamlined process that involves several key steps overseen by the Accounting and Corporate Regulatory Authority (ACRA), the official company registrar in the country.
1 Choose your company name
The first step in establishing your holding company is to select a unique name that reflects your brand and business vision. This name must be submitted for approval to the Accounting and Corporate Regulatory Authority (ACRA). It’s essential to ensure that your chosen name is not identical or too similar to existing company names to avoid potential conflicts and confusion. Additionally, the name of your holding company must comply with local naming regulations, which prohibit the use of certain words or phrases that may mislead the public or are deemed inappropriate. Once your chosen name is approved, it will be reserved for a specified period, usually 60 days, during which you must complete your registration process.
2 Formal registration
After securing your company name, the next step is to formally register your holding company structure with ACRA. This process involves filling out the necessary application forms and providing essential information about your company’s structure. You will need to include details regarding your shareholders, directors, and the appointed company secretary. It’s important to ensure that all information about your holding company is accurate and complete, as any discrepancies could lead to delays or complications in the registration process.
3 Online submission via BizFile+
The entire registration process can be conveniently completed online through the BizFile+ web portal, which is operated by ACRA. This user-friendly platform allows you to submit your application electronically, upload the required documents, and pay the registration fees for your holding company through secure online payment methods. To facilitate a smooth application process, it is crucial to ensure that all documents are complete, properly filled out, and compliant with regulatory requirements.
4 Processing time
If all your documents are in order, the registration process of a holding company typically takes between one to three days for approval. However, it’s important to note that delays can occur if there are any issues with your application or if any required information is missing. To mitigate the risk of complications and ensure a more efficient registration experience, it may be beneficial to consult with or hire a professional service. This is especially advisable for those who are new to the registration process or unfamiliar with the regulatory landscape in Singapore.
5 Why choose Singapore?
If you are considering starting a holding company, Singapore stands out as one of the most attractive jurisdictions globally. The country’s favourable tax policies, which include no capital gains tax and a single-tier corporate tax system, provide significant financial benefits for businesses. Furthermore, Singapore boasts a robust legal framework and a supportive regulatory environment that fosters entrepreneurial growth and offers asset protection for business owners. The business-friendly atmosphere, combined with a strategic location in Southeast Asia, enhances opportunities for expansion and success. As a result, Singapore is increasingly recognised as a prime location for establishing holding companies.
By following these steps and taking advantage of the resources available, you can efficiently navigate the registration process for your holding company in Singapore and embark on your entrepreneurial journey with confidence.
Get our free pre-incorporation checklist
A step-by-step checklist to get organised before incorporating your new business
Remember, if it’s your first time handling company registrations, it is always beneficial to engage the help of professionals to ensure a smooth incorporation process. A holding company is also subject to corporate governance in Singapore. If compliance is a troublesome process for you, why not entrust it to experienced corporate secretarial services?
What Are the Main Challenges of a Holding Company in Singapore?
Holding companies in Singapore face several challenges despite the favourable business environment. One of the main difficulties for a holding company is ensuring compliance with Singapore’s regulatory requirements. This includes timely filing of annual returns, maintaining proper corporate records, and adhering to the Companies Act. Failing to meet these obligations can result in penalties and legal complications.
Another challenge is tax planning, especially for holding companies with global subsidiaries. While Singapore offers attractive tax incentives, navigating international tax laws, transfer pricing rules, and double taxation agreements can be complex. Holding companies must carefully structure their investments to avoid tax inefficiencies, particularly when dealing with dividends, interest income, or gains from foreign sources.
Additionally, managing subsidiaries across different industries or regions can create operational complexity. Each subsidiary may have its own regulatory landscape, market conditions, and business risks, requiring careful oversight from the holding company.
Lastly, holding companies must also manage financial risks, such as currency fluctuations, interest rate changes, and market volatility, as their revenue often depends on investments. The challenge lies in ensuring stable returns while safeguarding the value of their assets over the long term.
Summary
In conclusion, establishing a holding company in Singapore offers numerous advantages, including a favourable tax environment, robust legal protections, and a straightforward registration process. These benefits make Singapore an ideal location for entrepreneurs looking to maximise their investments and minimise their tax liabilities. By following the outlined steps and considering professional assistance, you can successfully navigate the registration process and set your holding company up for long-term success.
From expert guidance and helpful accounting tips to insights on the latest trends in fintech, Heather is here to empower entrepreneurs and small business owners in Singapore with great content. With a background in digital marketing spanning eight years, she has experience writing for various industries and audiences. As Osome’s copywriter, she’s here to inform and inspire our readers with great storytelling.
