Singapore Branch Office: Overview

[DaleRoberts]

Foreign companies that are planning to have a business presence in Singapore may register a branch office that can act as an extension of its main headquarter which means that it is not a legal separate entity.

And as an extension of its parent company, a Singapore branch office has these following characteristics:

* Its name is the same as its parent company's unless if the authorities deem this indecent and vulgar or there is already an existing business name in the country.

* The parent company is directly liability for all the losses, debts, and liabilities of its Singapore branch office.

* The management of a branch office is directly controlled by its parent company abroad.

* A branch office is treated as a non-resident business entity which means that it cannot enjoy local tax benefits and exemptions.

Basic Requirements in Registering a Branch Office

To legally operate a branch office, a foreign company is required to appoint two agents who may be a Singaporean citizen or holder of Employment Pass, EntrePass, or Permanent Residence Status. These Singapore residents will oversee the management of a foreign company's branch office in the country.

In case that a foreign company wants to relocate its staff to be the agents in its Singapore branch office, it should assist them in securing an Employment Pass which is a work visa provided to professionals, high-ranking, and skilled employees (this is also given to foreign entrepreneurs).

Another important requirement is to have a registered office address in the country. Legally speaking, this office is the place where all the statutory documents of a branch office are kept.

Benefits and Disadvantages of a Branch Office

One of the advantages of this business model is that foreign companies can expand their operation in Singapore and explore the market which can help them maximize their revenue-generating activities.

Foreign companies with a branch office also enjoy direct interaction with their local distributors and agents.

Despite the several benefits of having a branch office, this business entity also has some disadvantages especially when it comes to taxation. Being an extension of a foreign company, this entity is not eligible for local tax benefits and exemptions.

Also, a branch office does not enjoy limited disclosure because it is required by the government to submit even the audited accounts of its headquarter, an arrangement in which most foreign companies are not comfortable with.

Aside from a branch office, a foreign company may also register a representative office or Singapore subsidiary company if it plans to have a presence in Singapore.

[Strong Eagle]

Yes, the information is accurate and I can't think of any company that uses a branch office. It is much easier to setup a wholly owned pte ltd, and that's what all the MNC's do. Way too many downsides to a branch office, including costs to setup and reporting requirements, never mind the loss of tax benefits.

A representative office cannot conduct business or make a profit, and its duration is limited. Tell me again why anyone would setup a branch or representative office.

[PNGMK]

Yes, the information is accurate and I can't think of any company that uses a branch office. It is much easier to setup a wholly owned pte ltd, and that's what all the MNC's do. Way too many downsides to a branch office, including costs to setup and reporting requirements, never mind the loss of tax benefits.

A representative office cannot conduct business or make a profit, and its duration is limited. Tell me again why anyone would setup a branch or representative office.

Our French entity opened one for many years in Singapore. I can't recall the exact reasons we did it but it was definitely an administrative burden.