Singapore welcomes professionals, entrepreneurs, and investors as the country offers a straightforward, and convenient way to set up a business. Entrepreneurs can choose to open a sole proprietorship or partnership for their businesses, while a foreign company may opt to set up a branch office in Singapore to handle local business operations.
With more than 7000 MNCs and 110000 expatriates, Singapore is a land of opportunities. If you are planning to open up a branch office in Singapore, then this article can guide you. You will get all the basic information that you need for registration of your Singapore branch office.
What is a Branch Office?
A branch office is a company's outlet or an organization that is not a completely separate legal entity from its parent company. A Singapore branch office can be considered as a company's extension in the country, operating on behalf of the foreign parent company.
Unlike a Singapore subsidiary company, which is a completely separate legal entity from its parent company, a branch office is the local unit of a foreign company, and is allowed to conduct business and revenue generation on behalf of its parent company.
Common industries that have branch offices are financial and banking institutions, though there are Singapore branch offices for other industries as well, such as hospitality, food and beverage, and fashion among others. Branch offices can make your office work much easier as the need to offer a more personalized and quick service becomes much easier.
Different countries will have different rules and criteria for allowing branch offices in their country. In this article, we will discuss the registration process basics for opening a branch office in Singapore.
What Do You Need To Set Up A Branch Office In Singapore?
The Accounting and Corporate Regulatory Authority in Singapore (ACRA) doesn't allow foreign companies or organizations to self-register their branch office in Singapore. The best option for foreign companies to register a Singapore branch office open is to get in touch with a business services firm like WealthBridge, which will facilitate the incorporation.
We will assist you throughout the process of registration at the ACRA. With the right documents you can set up your branch office in Singapore in less than a day! The three crucial factors that you will need to open up a branch in Singapore are:
- A registered office in Singapore
- A corporate shareholder
- A Singapore resident agent
Things you need to know before registration
- Name: The branch office that you are planning to set up in Singapore must have the same name as its parent company. The naming format of the Singapore branch office should be the same as the foreign company, plus the suffix - Singapore Branch attached at the end.
The name must get approval from ACRA before registering for a Singapore branch office. The name of the branch office will be rejected if the name is the same as another existing name of another business, or similar to any established company names. - Shareholders: Your company must own the 100 percent of the new branch office that you are planning to set up. As the branch office is considered an extension of the parent company, and is not a separate legal entity, it may not have a separate set of shareholders.
- Resident Agents: While setting up a branch office in Singapore you must ensure that you have one or more than one agent who is a resident of the country. The agent can be a permanent resident or a citizen of Singapore.
You can even get an agent who holds a pass of a dependent or an employment pass. The agent or the staff member of management can be your local agent for your branch office upon Employment Pass application approval. - Company Secretary: The Singapore branch office that you plan to set up doesn't require a company secretary, necessarily. However, it is highly recommended that you get a company secretary services that will help you to stay in compliance with all the statutory regulations.
- Registered Address: Any business that plans to get registered in Singapore, must have one registered physical office address - foreign companies are no exception. The address must be a physical and legitimate Singapore address, not a P.O. box, and while there are certain kinds of business that allows the use of a residential address, it is recommended to choose a separate commercial address for a Singapore branch office.
- Articles and Memorandum of Association: The articles and memorandum of the parent company must be lodged with the ACRA. The articles specify the regulations or rules that govern the company's internal management, whereas the memorandum specifies the company's engaging activities.
- Corporate Bank Account: The parent company is responsible for the financial statements and assets of their Singapore branch, and therefore is responsible for opening a corporate bank account with a local or international bank in the country.
- Tax: Branch offices are taxed as non-resident companies in Singapore, and are therefore ineligible for tax incentives unlike subsidiaries, which are entitled to tax exemption. Branch offices are taxed a flat corporate tax rate of 17% of the income generated within the country, as shown in their audited financial statements.
Wrapping it up!
Singapore is a country that has a highly effective infrastructure, flexible tax regime, free market economy, and a stable socio-political environment. For many years, Singapore has been considered as one of the easiest places for setting up a business or a company. In Singapore, it is possible to set up a business or a branch office in less than a day! As a country, Singapore is classified as one of the greenest and clean cities in the world. Singapore is a thriving cosmopolitan city suitable for setting up a business or opening a branch office.