An Investment Holding Company is a company which generates its income through ownership of real estate or shares of other companies. The income could be through the sale and purchase of these assets, the rental income or the dividends received. The Accounting and Corporate Regulatory Authority (ACRA) defines this type of income as non-trade income. ACRA recognises Investment Holding Companies and such companies are accorded an SSIC Code. SSIC or Singapore Standard Industrial Classification is the national standard for classifying economic activities undertaken by economic units.
An Investment Holding Company is basically a company and has a structure that is similar to most other companies. One of the main reasons why individuals may want to set up an Investment Holding Company is to consolidate wealth into one company and also to limit tax liabilities. There are many Singaporeans and foreigners who set up Investment Holding Companies in Singapore. Holding assets in a company may also be a simpler way to leave wealth to the beneficiaries of a person as he or she can consolidate all his wealth into one company and employ legal and tax professionals to manage the assets of the company. He or she can will the shares of that company to his or her beneficiaries. To many, an Investment Holding Company is a scaled down version of a family office.
Due to Singapore’s favourable tax structure as well as the fact that Singapore does not have capital gains tax, Singapore is seen as a safe haven for individuals to set up investment holding companies. Furthermore, setting up of such companies is not complex and can be done rather swiftly by an ACRA Registered Filing Agent.
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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