As discussed in the types of entities, foreign companies can set up its establishments in Singapore by forming:
A Singapore Branch Office is considered as a non-resident entity since it functions as an extension of a foreign company that is registered outside Singapore. It is allowed to carry out activities within the scope of business of its head office. Liability of any acts of commission or omission committed by the branch office is extended to its parent company.
In a Singapore taxation basis, since it is a non-resident, a Branch Office is not able to enjoy the some of the Singapore tax benefits sand incentives that local or subsidiary companies are enjoying. However, a Branch Office will only be taxed based on the earnings derived from its operations in Singapore.
Requirements for setting up a Branch Office
The name of the Branch Office must be the same as the parent company
It must have a registered office address in Singapore
It must appoint at least one Singapore Resident agent as an authorized representative of the company
It must have 1 corporate shareholder
Its accounts need to be audited, and reporting to the local authorities in Singapore is necessary
A Representative Office is suitable for foreign companies who wish to set up temporary vehicle in Singapore to conduct research and acting as a liaison office. It enables foreign companies to conduct market research or coordinating activities but should not conduct revenue generating activities. Liability of a Representative Office is extended to its parent company.
A Representative Office cannot act directly or on behalf of the parent company in management and operational decisions. This means that a representative office will not be able to issue invoices, cheques, trade and so on.
Requirements for setting up a Representative Office
A chief representative of a Branch office should be appointed and he/she must be staffed from the company’s head office
A representative can operate up to maximum of 3 calendar years. Should it wish to continue operations, it must convert to branch office or subsidiary office
A Representative Office should not hire more than 5 local support staff
A Subsidiary Company is incorporated as a limited liability company which has a distinct legal entity. The liability of the parent company is limited to the amount of capital invested in the subsidiary company. The parent company may own partially or wholly (100%) of the subsidiary’s shares.
A Subsidiary Company is allowed to have different names from the parent company and can conduct activities that are out of the scope of the business activities of the parent company. A subsidiary is treated as a tax-resident, hence it is allowed to enjoy Singapore tax incentive and benefits. Please keep in mind that its parent company can be either local or overseas based.
Requirements for setting up a Subsidiary Company
It should have at least minimum one resident director locally resided in Singapore. A person of a Singapore Residency, Singapore Permanent Residency and Employment Pass Holder is eligible to be appointed as a local resident director
One corporate shareholder (parent company). The other shareholders can be individuals with restriction of 50 members in total.
It shall appoint one company secretary within 6 months from incorporation. The retired company secretary shall be replaced with new individual in an interval of 6 months.
Minimum paid-up capital (share capital) is SGD1 or equivalent in other currencies
It should have a Singapore registered office address
In order to qualify for local tax incentives, there should be at least one individual shareholder with 10% shareholding in the Subsidiary company
For more information about the registration of these entities, kindly contact JSE Offices via the chat box or do drop us your enquiry here for more enquiries.