Holding Your Investment Properties Under An Investment Holding Company

Holding Your Investment Properties Under An Investment Holding Company

In today’s business setting, buying property through an investment holding company is an acceptable norm. Acquiring property in Singapore through an investment holding company has advantages. These advantages like ease of transfer and inheritance, resell benefits through ACDB Stamps and ease of investment make it a lucrative venture for business owners. These advantages are what you will be finding out today, along with a few disadvantages that you should also be aware of.

An Investment Holding Company Eases Wealth Transfer

Inheritance Woes

One of the problems of prominent families with millions in assets is wealth distribution. A holding company will be able to make the transfer of assets easier. Properties bought under a company are not under your personal property but is considered as owned by the entity (company). This makes it easier for you to pass on any properties you buy to selected beneficiaries of your choice. Take a look at the example below:

Mr. Tam buys a property near the Bay area, but he buys it under his company’s name “TJK Pte. Ltd”. All the proceeds from the property, though it goes to him, is not counted as personal income. The property, which is rented out to numerous cafes in the area, is listed as the property of TJK and not Mr. Tam’s. When Mr. Tam dies, the probate court dealt with his properties but as for the company which was held in a trust. The ownership of the company went to Mr. Tam’s youngest son who was skilled in business, and not to his spendthrift eldest son and daughter. Mr. Tam’s youngest son, in turn, inherited not just the company but all assets under it.

Everything would have gone differently had Mr. Tam not used a holding company as the vehicle of property acquisition. His two older children could have gotten those properties and wasted its resources with partying, gambling and irrational buying.

Protection Against Unwanted Creditors & Probate Court

Choosing a Singapore holding company as a vehicle for getting properties also provides protection against creditors coming after your assets. Since any property you buy under your company name is considered company property, when you die these will not be considered probate.

Buying With An Investment Holding Company Has Monetary Benefits

The Additional Conveyance Duties For Buyers (ACDB)

Owning a residential property via an investment holding company in Singapore entails 15%  in Additional Buyer Stamp Duty, compared to selling it as an individual owner. For example, Mr & Mrs. Hsu decide to buy a  property from Lee Holdings. The couple will be required to pay an additional 15% Additional Buyer Stamp Duty to Lee Holdings compared to buying from an individual seller. As an investor this 15% is an enticing reason for selling residential properties using a holding company.

An Investment Holding Company Offers Better Opportunities

Buying as a group beats buying alone. With more resources, you can acquire a higher value property or even buy more than one. Through a mutual fund, you can gain more cost-effective ways to handle and acquire money. And having a Singapore holding company is a great medium to expand your financial pursuits, whether locally or offshore.

Conclusion

An investment holding company has three noteworthy benefits for investors and businessmen like you. Through a company, you can acquire more assets at the same time protect such properties from unwanted claims and succession woes.

Are you interested in starting an investment holding company in Singapore? Give us a call, and we’ll be more than happy to get you through the whole process.