A Quick Guide about Singapore branch office registration

Singapore as a gateway to the east and the west is gaining a lot of attention from

foreign companies that are keen on expanding their operations beyond their home. Singapore facilitates such expansion plans of foreign companies by creating an affable regulatory framework. Foreign companies have three options to choose from when it comes to establishing their business in Singapore namely, subsidiary company, branch office and representative office. Subsidiary company is the most popular type of entity among foreign companies apparently due to the tax benefits. Between the other two types - representative office and branch office - the branch office scores well due to some unique advantages. The following article explores the top five reasons for registering a Singapore branch office.

A branch office is the most appropriate vehicle for a foreign company that is keen on exploring the market before committing itself extensively in Singapore. A branch office, upon registration with the Singapore company registrar, is allowed to conduct business, the scope of which should be the same as that of the foreign company. Unlike a representative office the branch office is allowed to engage in revenue generating operations and enter into contracts.

A branch office is a mere extension of the foreign company which is implicitly liable for all the liabilities of the branch office. Though it lacks a legal persona of its own, it can actively engage in business operations and generate revenue and repatriate its earnings without any limitations.

A branch office is deemed non-resident, therefore cannot avail local tax incentives and exemptions. It must be noted that a Singapore branch of a foreign company is considered resident in Singapore if the control and management of its business are exercised in Singapore. Such a resident branch office can avail the benefits arising out of Singapore's Double Tax Agreement (DTA). Resident of treaty countries, where the management is outside Singapore, can also benefit from DTAs for income derived in Singapore and be exempt from paying tax in Singapore.

The branch office paves way for the parent company to exercise greater direct control on the operations of the branch office as the local management, if any, will lack autonomous powers. The parent company can directly appoint agents and wield greater powers in determining the partners, terms of agreement etc., and prevent any dilution and diversion of business objectives and principles.

Apart from the requirement to file annual returns a branch office has little restrictions. A branch office registration with the Singapore registrar is perpetual and does not require periodic renewal as in the case of representative office and it is entitled to open bank account and conduct monetary transactions independently. There is no restriction on hiring local staff or limitations on local headcount.

Thus a branch office will be an ideal choice for companies with limited business operations, engaged in market exploration or those from treaty countries that derive income from Singapore operations.

A Quick Guide about Singapore branch office registration

By: Roger Lee

POST COMMENT

How to rent a room in Singapore Field strong at rich Singapore Open Singapore Company Registration for Foreign Entrepreneurs Register a Singapore Company — Overview Part TIme Maid Singapore Singapore Company Registration Relies on the Registrar Great Venues for Solemnization in Singapore ? AN Chuang Checklist in Singapore Have Fun With Singapore Packages What is included in a Bridal Package in Singapore? Singapore Company Incorporation Procedures 8 Dos and Don'ts in Singapore Ways of Incorporating a Company in Singapore