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Singapore Branch Office
This will be your guide to starting a branch office in Singapore. Singapore provides new businesses with the lowest corporate tax rate in the world along with the necessary incentives to succeed. With a business-centric environment, companies are encouraged to grow and prosper in Singapore.
The Branch Office is the most cost-beneficial way to set up your foreign business’ presence in Singapore as it allows you to save lots of money by avoiding corporate tax. The Branch Office acts as a local representative for the parent company that is situated overseas. This helps businesses make contacting their clients or consumers or even business partners that are based in Singapore to keep in communication or conduct business much easier.
What is a Branch Office?
The Branch Office is the most cost-beneficial business form that is directly connected to the parent company, ergo the word branch in the name. The Branch Office sets up a company with a foreign business presence in Singapore and allows you to save a lot of money by avoiding corporate tax. The Branch Office, however, has a significant drawback: it doesn’t protect the parent company’s assets because of the mutual legal entity they both share. The parent firm is liable before the Singapore law in the event of any breach, crime or fraud committed. Being only the foreign firm’s extension, this form of business setup fits only those undertakings that aren’t associated with risks.
What is the difference between the Branch Office and the Representative Office?
There are several differences between the two business forms. Firstly, in terms of legal nature, the Branch Office is considered an extension of the foreign parent company (same legal entity), while the Representative Office has no legal entity at all. Second, the Branch Office is able to gain profit but the Representative Office is a non-profit organization. Lastly, the Branch Office is only free from corporate tax from profits outside of Singapore. The profits gained in Singapore through the Branch Office business will be subjected to taxes. This is in contrast to the Representative Office where taxes are waived fully.
- Name of this type of entity: Singapore branch must name the same as to the name of the foreign company.
- Representative: A Singapore branch must appoint at least 1 authorised representative who is ordinarily a resident in Singapore (A Singapore citizen, PR or work pass holder). The agents should be natural persons who is above 18 years of age. Parent companies located overseas planning to relocate one or more of their staff members from the head office to Singapore, secure an employment pass for such individuals after the branch has been registered.
- Constitution and Activities: The shareholders, structure of entity and its activities follows the foreign company’s Constitution.
- Registered Address. A registered office located in Singapore is required by Singapore Companies Act, the branch office must mention its name and the place of incorporation on all its business correspondence and also outside its place of business in Singapore.