Foreign companies keen on establishing a presence in Singapore may choose to set up a subsidiary company, a branch office, or a representative office. The best option depends on the company’s business plan and strategic goals. The sections below cover the different set-up options available to foreign companies.
Subsidiary Company
A subsidiary company is a locally incorporated private limited company, and its shareholding may be owned 100% by a foreign company or individual. A subsidiary is treated as a local resident company if its control and management are exercised in Singapore. As a resident company, it enjoys the tax exemptions and incentives available to local companies. It is also considered a separate legal entity from its foreign parent — the parent company’s liability is limited to the share capital invested in the subsidiary, and the parent’s own assets cannot be held liable for the subsidiary’s debts and liabilities. It is also generally easier to raise funds locally or obtain government incentives.
Because of these benefits, registering a subsidiary is often the preferred option for small to mid-sized foreign businesses setting up an office in Singapore.
The subsidiary’s name can differ from the parent company’s name, subject to approval by the Accounting and Corporate Regulatory Authority (“ACRA”). The Singapore Companies Act requires at least one director to be a local resident — a Singapore Citizen, Singapore Permanent Resident, or Employment Pass holder. A subsidiary company also needs a registered office address in Singapore, where all statutory documents must be kept.
Branch Office
A Singapore branch office is a registered legal entity, but it is considered an extension of the foreign company rather than a separate legal entity — its debts and liabilities are borne by the foreign company’s head office. A branch office is generally treated as a non-resident company for tax purposes, and is therefore not eligible for the tax exemptions and incentives available to tax-resident local companies.
Because of this non-resident tax status, a branch office is generally a less attractive option for small to mid-sized foreign businesses. Setting up a branch office suits foreign companies that do not want to incorporate a separate company in Singapore, but want to register an entity to carry out business activities under the corporate title of the foreign company.
The branch office’s name must be the same as the parent company’s and must be approved before registration — the registrar generally approves the proposed name unless it is identical to an existing company name or offensive in nature. The Companies Act requires the appointment of at least one authorised representative who is ordinarily resident in Singapore, and the branch office also needs a registered office address in Singapore.
Representative Office
A representative office suits foreign companies interested in conducting market research or administering company affairs without carrying out profit-generating business activities. It is a short-term setup with no legal status and cannot engage in direct trading on behalf of the foreign company. As it does not generate revenue, it is not required to submit tax returns in Singapore. It is also not a separate legal entity from its parent, so the foreign company bears all liability for its activities.
Registering a representative office costs considerably less, making it a useful way for foreign companies to explore opportunities in Singapore and the region before committing further. However, a representative office cannot operate beyond three years — it must be converted to a branch office or subsidiary before or at the end of that period.
As with a branch office, the representative office’s name must match the parent company’s, with authorities deciding case-by-case where a name is identical to an existing one. The representative office must be staffed by a representative from the foreign company’s head office and may engage up to five employees.
Comparison at a Glance
| Subsidiary | Branch Office | Representative Office | |
|---|---|---|---|
| Entity name | Need not match the parent company’s name, but must not be identical or similar to any registered company or business in Singapore. | Must be the same as the parent company’s. | Must correspond to the parent entity’s name; Enterprise Singapore must be notified within one month of any name change, with a copy of the parent’s certificate of change of name. Must state “Representative Office Registered in Singapore” on its signage, letterheads, and staff name cards. |
| Legal status | Separate legal entity, distinct from its members (parent company) and directors. | Not a separate legal entity — an extension of the parent company registered outside Singapore. | No legal status; a temporary facility with no statutory obligation to file financial accounts or tax returns with ACRA or IRAS. |
| Liabilities | Parent company not liable for the subsidiary’s debts and losses. | Debts and losses extend to the parent company. | Liabilities extend to the parent company. |
| Business activities | No restrictions on the type of business activities. | Must be the same as the parent company’s. | Limited to market research and feasibility studies; cannot provide services or generate revenue on behalf of the parent. |
| Continuity in law | Perpetual succession until wound up or struck off. | Perpetual existence until deregistered. | Can operate in Singapore for a maximum of three years from inception, and must be renewed annually during that period. |
| Estimated registration time | Usually within 1 day; 14 days to 2 months if referred to another agency for approval (for example, activities involving setting up a private school are referred to the Ministry of Education). | Usually within 1 day; 14 days to 2 months if referred to another agency for approval, on the same basis as a subsidiary. | 3-5 days. |
| Taxes | Taxed as a Singapore resident entity where control and management are exercised in Singapore; tax exemptions and incentives are available. | Taxed as a non-resident entity; resident tax exemptions and incentives do not apply. | Not applicable. |
| Annual filing requirements | Annual return filed together with the subsidiary’s annual financial statements. | Within two months of its AGM, must lodge with the Registrar: the foreign company’s financial statements for the year, documents accompanying the financial accounts filed overseas in the parent’s jurisdiction, and a copy of the audited financial accounts of the Singapore branch. | Not applicable. |
| Bank account in Singapore | No restrictions on opening a bank account. | No restrictions on opening a bank account. | Can open a bank account to run cost-centre operations funded by the parent company. |
| Hiring of staff | No restrictions on hiring local or foreign staff; foreign hires subject to the foreign worker quota for the business sector and company workforce. | No restrictions on hiring local or foreign staff; foreign hires subject to the foreign worker quota for the business sector and branch workforce. | Chief representative must be a staff member from the parent company; total staff should be fewer than 5 people. |
| Set-up fee | S$315 (S$15 name application fee plus S$300 incorporation fee). | S$315 (S$15 name application fee plus S$300 registration fee). | A non-refundable processing fee of S$200 per year, including for unsuccessful or withdrawn applications. |
| Appointment of officers | Must appoint at least one director ordinarily resident in Singapore. | Must appoint at least one authorised representative ordinarily resident in Singapore. | Must appoint a Chief Representative relocated from the head office. |