Foreign corporations looking at setting up company in Singapore have 2 options: Branch Office and Subsidiary.
|Type of business structure||Branch Office||Subsidiary|
|Description||A branch office is registered in Singapore as an extension of its parent company and not as a separately incorporated entity.||A Subsidiary company in Singapore, on the other hand, is a separate legal entity from the foreign parent company.|
|Key Difference/Feature||Not a separate legal entity. Must have same name as parent company.
Must appoint at least one authorised agent.
|A separate legal entity owned by the foreign corporation (up to 100% ownership). Can have different name from parent company.
Must appoint at least one local resident director
|Pros||Simple set up and low cost to run and operate||Foreign parent company does not have to bear the losses and liabilities of the Singapore Subsidiary company.
Treated as resident tax entity in Singapore and may enjoy same tax benefits as local companies (subject to IRAS conditions).
Can conduct business activities that are different from parent company.
|Cons||Only allowed to carry out activities defined in its constitution and cannot perform other activities in Singapore that are not aligned with the activities of the respective foreign company.
Foreign parent company has to bear the liabilities of the Branch Office.
Does not enjoy tax benefits as a separate corporation
|Same regulatory compliance obligations as local companies.|
Unfortunately, that is not possible. The Singapore Company Law requires that all foreigners must engage the services of a registered filing agent for this purpose.
No, you do not have to be physically present in Singapore to setup a company. All incorporation related paperwork can be executed online without your physical presence in Singapore. However, as part of our KYC procedures our compliance team may require an interview with one or more of the key persons of the company.
Registration of a Private Limited Company in Singapore requires at least one director. There is no limit on the maximum number of directors, although a maximum number is usually stated in the Constitution of the Company. A director must be a natural person and a corporate entity cannot be a director. Furthermore, at least one of the directors must be a resident of Singapore.
Yes, Singapore Companies Act allows for 100% ownership of Singapore companies by foreign persons or entities. There are also no restrictions on the type of business activities that a company can engage in. No special approvals are required by foreigners. In other words, there is no difference between a local or a foreign person who wishes to form a Singapore company.
Singapore subsidiary companies are considered tax residents in the eyes of the law. Therefore, they are eligible for tax benefits offered to Singapore tax residents. For information on corporate taxes in Singapore, see Singapore corporate tax guide.
Branch offices are considered non-residents. As a non-resident, a Singapore branch office cannot take advantage of Singapore’s tax incentive programs, grants and tax exemptions. Furthermore, branch offices do not qualify for the tax exemption on certain foreign-sourced income and cannot seek double taxation relief under Singapore’s extensive network of Avoidance of Double Taxation Agreements (DTAs).
A subsidiary being a locally incorporated entity, is subject to the same annual filing requirements as local companies. For more details, see compliance requirements of local company.
Singapore branch offices are required to submit their audited financial statements to ACRA within 60 days of the parent company’s annual general meeting.