The Companies Act 1967 requires a foreign company registering a branch to appoint at least one authorised representative who is ordinarily resident in Singapore. The older term “local agent” was replaced when the Act was amended, and “authorised representative” is the term ACRA uses today. “Ordinarily resident” refers to a person’s usual place of stay. The Accounting and Corporate Regulatory Authority (“ACRA”) may accept that a person is ordinarily resident in Singapore if they can provide a local residential address and demonstrate that they are staying in Singapore on a long-term basis (i.e., legally remaining in Singapore for an extended period).
Preparation of Financial Accounts
The branch’s financial accounts must be prepared in accordance with the Singapore Financial Reporting Standards to give a true and fair view of its Singapore operations, and must include an audited statement of the branch’s assets, liabilities, and profit and loss accounts.
Annual Filing Requirements for a Branch Office in Singapore
Under section 373 of the Companies Act 1967, a foreign company with a Singapore branch must, within 2 months of its annual general meeting, lodge the following with the Registrar:
- A copy of the foreign company’s financial statements for the financial year concerned.
- Documents accompanying the financial accounts filed overseas in the foreign company’s home jurisdiction.
- A copy of the audited financial accounts of the Singapore branch office.
Where the parent company is not required, under the law of its place of incorporation, to hold an AGM and prepare a balance sheet, it must instead prepare and lodge with the Registrar a balance sheet within the period, and in the form and containing the particulars, that its directors would have been required to prepare or obtain had the company been a public company incorporated under the Singapore Companies Act.
Income Tax Filing Requirements for a Foreign Company’s Singapore Branch
For taxation purposes, a company includes:
- A business entity incorporated or registered under the Companies Act or any other law in force in Singapore, usually identified by “Pte Ltd” or “Ltd” in its name.
- A foreign company registered in Singapore, such as a branch of a foreign company.
- A foreign company incorporated or registered outside Singapore.
With effect from Year of Assessment (YA) 2010, a company is taxed at a flat rate of 17% on its chargeable income, regardless of whether it is a local or foreign company.
Singapore branches of foreign companies are generally regarded as non-resident, on the basis that control and management sits with the foreign parent. This is a general position rather than an automatic rule. As a result, certain incentives and treaties available only to Singapore tax resident companies do not apply to the branch. However, a branch may still be treated as a Singapore tax resident if it can satisfy the Inland Revenue Authority of Singapore (“IRAS”) that certain conditions have been met.
The statutory deadline for filing a corporate income tax return is 30 November of the year following the year in which the company’s financial year ends (e.g., if the branch’s financial period is 1 July 20X4 to 30 June 20X5, the income tax return filing deadline is 30 November 20X6).
In addition to the return itself, the branch must file its Estimated Chargeable Income (“ECI”) with IRAS within 3 months of its own financial year end, which for a branch follows the foreign company’s financial year end. If that year ends on 31 December 20X5, ECI is due by 31 March 20X6.
A branch is exempt from filing ECI where it meets IRAS’s waiver conditions, broadly that annual revenue does not exceed the prescribed threshold and the ECI is nil. Check the current threshold with IRAS rather than assuming the waiver applies, since the figure is revised from time to time.