Singapore Company For Foreign Businessmen

By Author: John Media
Total Articles: 34
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Foreign companies planning to have a business presence in Singapore may register a subsidiary company, representative office, or branch office, depending on their goal and purpose of forming a Singapore company.

Meanwhile, this is a short description for each of the three business arrangements available to foreign companies and entrepreneurs:

1. Representative office

A representative office is ideal for foreign companies which do not want to engage in full operation without determining first the market viability of their products or services.

Under the Singapore Companies Act, a foreign company should appoint and relocate a chief agent to its representative office who will then oversee the activities related to market research, negotiation deals, non-technical customer service, and other activities which should not generate revenue.

This arrangement is only seen as temporary and that the government does not allow a representative office to operate for more than three years since it considers that this period is enough to determine the viability of a certain business.

2. Subsidiary company

Once ...
... a foreign company has determined the profitability of its business in Singapore, it can register a subsidiary company which is allowed to engage in any trading and business activities as long as these are also performed by its parent company.

In legal terms, a subsidiary company is a separate legal entity from its main office, with this arrangement; its parent company will not be held liable for any of its losses, debts, and liabilities.

A subsidiary company may be 100 percent owned by a foreign company or may have a maximum of 50 shareholders (or owners).

Even if a subsidiary company is 100 percent owned by foreign businessmen, it is still treated as a local resident company since it is incorporated in Singapore. With this arrangement, this business entity enjoys countless of tax benefits and exemptions typically provided to local business residents.

But to legally operate in the Singapore, a subsidiary company should appoint at least one director who is a local resident or holder of Employment Pass, EntrePass, or Permanent Residence Status; maintain a registered office in the country; and file its audited account.

3. Branch office

Just like a subsidiary company, a branch office is allowed to conduct activities as long as these are the same as its parent company's.

But unlike a subsidiary company, a branch office does not enjoy tax benefits provided to locally incorporated companies because it is still treated as a legal extension of its parent company. And with this arrangement, the headquarter is directly liable for the losses and debts of its Singapore Branch Office.

Meanwhile, this business entity is required to appoint two resident agents who will oversee its operation, and submit its audited accounts, including its parent company's, to the government.