Registration Options In Singapore For Foreign Companies

In addition to other types of business in Singapore, foreign companies planning to venture into the Singapore market can choose one of the following 3 registration options:

• Subsidiary
• Branch office
• Representative office

All in all, a subsidiary company in Singapore can provide you with flexibility and a wide range of benefits like a local private company. This option is highly recommended.

However, if you want to promote the brand name of your company, go for a branch. Meanwhile, a representative office is a low-cost yet efficient research tool before your foreign company in Singapore

Which entry options to choose depends solely on your business needs and long-term strategy. In order to reach an informed decision, read on.

Setting up a subsidiary in Singapore

A subsidiary in Singapore is deemed a private limited company that is owned and administered by other companies. These corporate shareholders are normally called parent or holding companies (of the subsidy).

While its share can be held by locals, a subsidiary is also allowed to have 100% foreign ownership. This means that foreign companies can wholly own a subsidiary in Singapore by holding all of the subsidiary’s shares in their hands.

A holding foreign company in Singapore can be the sole shareholder and, much like a private company, the maximum number of shareholders in a subsidiary is capped at 50.

Setting up a subsidiary is viewed as the most viable option for foreign companies entering Singapore. The reason is that a subsidiary can offer far greater flexibility over a branch, or for that matter, a representative office.

Particularly, a subsidiary in Singapore is classified as a distinct legal entity with its own rights and obligations. So, the liabilities of its shareholders (the holding foreign companies) are limited only to the number of shares they hold. Furthermore, a subsidiary can also enjoy a wide array of tax treaties, tax incentives, and other additional perks that are only meant for a legitimate corporate body.

Noticeably, unlike other entry options for foreign companies, in Singapore, you can name the subsidiary differently from that of the holding foreign company. Yet in order to do so, you need to seek approval from ACRA in advance.

Requirements to set up a subsidiary in Singapore

Should you wish to extend your foreign company’s business to Singapore by setting up a subsidiary, the following are some of the key criteria you need to fulfill:

• You must appoint at least one local director, who could either be a Singapore Citizen, Permanent Resident, EntrePass, or Employment Pass holder.
• You must appoint at least one shareholder who could be the parent company.
• You must appoint one local company secretary whose job is to ensure that regulations are consistently complied with.
• You are required to raise a paid-up share capital of at least S$1.
• You are required to engage a registered filing agent located in Singapore to facilitate the registration process.

Documents needed to set up a subsidiary

Below is the checklist of general documents that are required for the registration of a subsidiary:

• Certificate of incorporation of the parent foreign company.
• An extract from the Companies House showing the current registered address and directors of the parent foreign company.
• A company resolution authorizing specific individuals for signing subsidiary documents on behalf of the parent foreign company.
• Passport particulars and personal details including the residential address of individuals who will serve as directors of the Singapore subsidiary company.

Registering a branch in Singapore

A branch is a practical means through which a foreign company can stretch its reach to Singapore to do business and increase its brand recognition.

A branch is only seen as an extension of the parent company and, therefore, is not granted resident status. Due to this lack, its debts and liabilities would be channeled right to its parent foreign company in Singapore in times of crisis such as when disputes or lawsuits arise.

One more obvious flaw of a branch is that it is excluded as a candidate for tax incentives and other worthwhile benefits that are available for private limited companies.

Speaking of its operation, the scope of activities that a branch is allowed to engage in is defined by that of its parent foreign company. To give you an example, if a foreign company is solely specialized in cargo and freight, its branch in Singapore must not do anything else but cargo and freight.

The taxation of a branch is the same as a Singapore resident company. In addition, you are allowed to remit its profits and capital back to its holding company in another country.

Requirements to register a branch office in Singapore

If you have finalized registering a branch in Singapore for your foreign company, here are some key requirements:

• You must appoint at least one local agent as the representative of your branch, who could either be Singapore citizens, permanent residents, or EntrePass holders.
• The branch needs its registered address in Singapore.
• You are required to engage with the services of a local registered filing agent to facilitate the registration procedure.

Documents needed to register a branch in Singapore

The following are the documentary requirements that are essential to the setup of your branch office:

• Certified copy of constitutional documents of the parent foreign company.
• Personal Particulars of the parent company’s directors.
• A memorandum of appointment of the local representative including detailed information and power of the branch’s authorized representative.

Setting up a representative office in Singapore

It is not far off to assume that a representative office is a stopgap measure intended to make your presence known in Singapore.

That is, when a foreign company aims to enter the Singapore market yet remains reluctant as to whether or not that would be a sound investment, they can opt for a representative office to do surveys before taking the plunge.

Setting up a representative office is considered a strategic move that allows you to assess the viability of the Singapore market as well as the compatibility of it and your company.

However, facilitating market research is also the one and only purpose that a representative office can serve. This is because it has no legal status and is not allowed to engage in any other activities that generate profits.

A representative office is pretty short-lived, covering a maximum lifespan of 3 years, at the end of which you need to convert it to a branch or a subsidiary, or else it may be overthrown.

Requirements to set up a representative office in Singapore

If your sole need is to do market research to make sure that your company could marry well with Singapore, here are some requisite conditions:

• The foreign company is required to derive a sum of the annual revenue of at least US$250,000.
• The foreign company must have at least a history of 3 years doing business.

Documents needed to set up a representative office in Singapore

You may be required to submit the following documents when registering a representative office:

• A copy of the parent company’s certificate of incorporation or business registration certificate.
•  A copy of the parent company’s latest audited financial statement.
•  Completed application form.

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Summary of the 3 registration options for foreign companies in Singapore

Should you have any questions regarding company registration in Singapore, talk to our consultant by dropping a chat message or sending us an email via service@bbcincorp.com.