How to Set Up a Dual Entity Structure in India and Singapore
📌 Introduction
A dual-entity structure—where a company is set up in both India and Singapore—is becoming increasingly popular among startups, tech firms, service providers, and investors. The objective is simple: leverage the best of both jurisdictions—India’s operational scale and talent pool, and Singapore’s international business environment and tax advantages.
This article walks you through the why, the how, and the what-to-watch-out-for when setting up such a structure. It covers legal frameworks, registration procedures, tax strategies, and real-world structuring examples—all in a clean, icon-rich format for clarity and engagement.
🎯 1. Why Go for a Dual Entity Structure?
🇮🇳 India: Market, Manpower & Manufacturing
India is a booming economy with:
A huge consumer base
A young, skilled workforce
Low operating costs
Robust R&D and development ecosystems
However, challenges such as bureaucratic hurdles, complex tax laws, and regulatory red tape still make India a less friendly jurisdiction for raising international capital or managing global IP.
🇸🇬 Singapore: Gateway to Global Capital
Singapore, on the other hand, is known for:
A flat 17% corporate tax rate
No capital gains tax
Startup-friendly ecosystem
Strong IP protection laws
High ease of doing business
Double Tax Avoidance Agreements (DTAAs) with multiple countries including India
🧭 2. Step-by-Step: Setting Up in Singapore
📝 2.1 Legal Requirements
Setting up a Private Limited Company in Singapore involves:
✅ At least one local resident director
✅ At least one shareholder (can be individual or corporate)
✅ Company Secretary (must be a resident, appointed within 6 months)
✅ Registered local address
✅ Minimum S$1 paid-up capital
✅ Name approval from ACRA (Singapore’s business registry)
✅ Constitution (formerly Memorandum & Articles of Association)
📂 2.2 Required Documents
Identity proofs and address proofs of all directors/shareholders
Business description
Company constitution
Name reservation confirmation
⏱️ 2.3 Timeline
Company registration can be completed within 1–3 business days, assuming documentation is complete and accurate.
💳 2.4 Banking
Once incorporated:
Open a corporate bank account in Singapore
Some banks may require physical presence for KYC
📊 2.5 Ongoing Compliance
Annual return filing
Estimated Chargeable Income (ECI) within 3 months of financial year-end
Corporate tax return to IRAS
GST registration if revenue exceeds S$1 million
🛠️ 3. Setting Up in India
🏛️ 3.1 Legal Structures Available
For foreign or Singapore-based investors, the most commonly chosen structure is a Private Limited Company, though other forms like LLPs, Branch Offices, or Wholly Owned Subsidiaries (WOS) are also possible.
👥 3.2 Requirements for Pvt Ltd Co.
Minimum 2 directors (1 must be a resident Indian)
Minimum 2 shareholders (can be individuals or corporates)
Registered office address in India
Digital Signature Certificate (DSC) for each director
Director Identification Number (DIN)
📄 3.3 Incorporation Process
Obtain DSC & DIN
Apply for name reservation using the SPICe+ form
Draft MoA (Memorandum of Association) and AoA (Articles of Association)
Register with Ministry of Corporate Affairs (MCA)
PAN and TAN are automatically issued
Bank account setup follows incorporation
📌 3.4 Taxation & Compliance
Corporate tax ranges from 22%–30% (excluding surcharge/cess)
GST registration mandatory if turnover exceeds threshold (₹20L for services, ₹40L for goods)
Annual filings: AOC-4, MGT-7, Audit if turnover or capital crosses specified limits
🔄 4. Structuring the Two Entities Together
🧩 4.1 Strategic Roles
A typical dual-entity setup divides functions:
India Entity: Manages operations, sales, workforce, and product development
Singapore Entity: Handles IP ownership, foreign investments, global sales, or holding company functions
🔗 4.2 Cross-Border Relationships
Establish formal agreements between entities:
📄 Service Agreements: For outsourcing or management services
💡 IP Licensing: India pays royalties to Singapore for using patents, code, etc.
💵 Funding Agreements: Singapore entity invests or loans funds to Indian unit
These arrangements must comply with transfer pricing rules and arms-length principles.
💸 5. Taxation & DTAA Planning
🌐 5.1 India-Singapore DTAA Benefits
Avoid double taxation on income
Lower withholding tax rates on dividends, interest, and royalties
Credit mechanism or tax exemption for eligible income streams
🧾 5.2 Tax Planning Mechanisms
Royalties and management fees from Indian entity to Singapore are tax-deductible in India
Dividends received in Singapore are tax-free
Capital gains in Singapore are not taxed
Use Singapore as an investment vehicle to raise global capital
⚠️ 5.3 Compliance & Risk Management
Singapore now requires economic substance—real business activities
India may challenge aggressive tax structuring
Regularly review transfer pricing documentation and intercompany contracts
🚀 6. Advantages of the Dual Structure
💼 6.1 Business Benefits
🏁 Easier access to global investors via Singapore
📉 Lower overall tax liability
🌍 Better IP protection
🔁 Operational cost-efficiency in India
⚙️ Ability to structure business units independently
🌱 6.2 Startup Incentives in Singapore
Startup SG and other grants
Up to S$125,000 in tax exemptions
Potential for permanent residency under Global Investor Program
🛣️ 7. Roadmap: Setting It All Up
📌 Phase 1: Planning
Decide strategic functions of each entity
Plan ownership structure—does Singapore own India, or vice versa?
Outline financial flows, compliance paths, and risks
🧾 Phase 2: Incorporation
Incorporate Singapore entity with nominee director, if necessary
Incorporate India entity with Indian resident director
Open bank accounts, register for taxes
🤝 Phase 3: Structuring Cross-Border Agreements
Draft service agreements, royalty/license deals, and loan documents
Ensure proper transfer pricing documentation
Verify all contracts comply with DTAA
📈 Phase 4: Operational Execution
Begin operations in both jurisdictions
Conduct cross-border services as outlined in agreements
Keep books and documentation in both countries
📆 Phase 5: Annual Compliance
File all required tax returns in both countries
Maintain statutory registers and board resolutions
Conduct audits as per local laws
Update transfer pricing and DTAA claims annually
📌 8. Key Tips for a Smooth Setup
✔️ Use a professional firm to handle registrations and legalities
✔️ Ensure local directors are reliable and aware of responsibilities
✔️ Keep substance in Singapore—real staff, office, or board meetings
✔️ Avoid routing all revenue through Singapore without justification
✔️ Regularly review both countries’ tax laws—regulations evolve
💼 9. Real-Life Example: Flipkart
Many Indian startups, like Flipkart, originally registered in Singapore to:
Raise capital from foreign VCs
Leverage favorable exit structures
Protect IP
However, as IPO prospects in India grew stronger, Flipkart announced plans to re-domicile to India. This shift shows how businesses evolve their corporate structures based on fundraising and regulatory strategies.
🔚 Conclusion
A dual entity structure in India and Singapore enables businesses to scale faster, raise globally, and optimize taxes, but it demands careful planning, strict compliance, and clear structuring. While India offers growth, Singapore provides a global base that is investor- and tax-friendly.
Whether you're a founder, CFO, or investor, setting up both entities can create international leverage while managing local efficiencies—a winning formula in a globalized economy.
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