The Pros and Cons : Shareholding in Personal Name Vs Corporate Shareholding

If an existing company takes the shareholding of the proposed company, then the parent company’s compliance requirements would apply in this case as well. This means that your existing company will become the owner of your proposed company. The proposed company’s results, which are the profit and loss account, will then need to be consolidated and reported to the parent company. Undoubtedly, these would add extra work to your accountant. The structure in this case appears as indicated below.

• There exists a Singapore company owned by a parent company, which can be either located in Singapore or in a foreign country.
• If your parent company is subjected to an audit, then your Singapore company will be also subjected to an audit, and an audit will be definitely costly.
• If a parent company is, for example, in India, then the consolidated profits of both companies must be reported to the tax authorities of India. You also have to pay taxes for the consolidated profits.
• If Singapore has a double taxation avoidance (DTA) agreement with your country, then you will definitely gain some benefits. However, the amount of tax rebates that you can acquire depends on the DTA provisions. Additionally, when a corporate company takes the shareholding of a Singapore company, it will no longer become an exempt private limited company.