Holding companies are defined them as entities which are set up with the purpose of obtaining incomes generated through ownership of real estate property, rentals or shares in other companies. Accounting and Coperate Regulatory Authority, ACRA defines this type of income as “non-trade earnings”, which is why holding companies in Singapore are granted a special status and benefit from many tax and expenses deductions.

Holding companies are usually registered as subsidiaries and mainly known as private limited companies. This type of structure is employed by small and medium-size foreign enterprises. Foreign investors are always strongly advised to request the services of experts in company registration in Singapore and ask about the taxation system and incentives they can benefit from the company. Foreign businessmen must know that the registration procedure of a holding company must be done through the services provided by a professional firm.

In places like Hong Kong, the biggest advantage of of incoperating a holding company is that hong kong does not apply the value added tax sysyem. Companies pay 16.5% tax rates and there are no withholding tax rates on dividends and interests.