Three Types Of Singapore Company Formats

By Author: Lester Armsterdam
Total Articles: 1
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There are a lot of advantages that businesses in Singapore would enjoy- advantages such as it is near major markets, the government is practical and reasonable, the benefits that foreign companies would enjoy in terms of taxes and corporate laws. These are the advantages why Singapore has always been one of the favorite business spot in the Asia Pacific region

Generally, foreign entrepreneurs who have business operating presently or who are eyeing on expanding their business in Singapore have three business arrangement options available for them to legally operate in Singapore, they are as follows;

Singapore Subsidiary Company

A subsidiary company is treated as a separate legal entity which means it is directly responsible for its own losses, debts, and activities rather than its parent company from abroad.

Since the nature of the business is locally incorporated private limited company despite being owned by foreigners, a subsidiary company is enjoying the same benefits as the local residents are enjoying ...
... such as tax exemptions.

A foreign company should hire at least one director as a legal requirement, according to the Accounting and Corporate Regulatory Authority (ACRA). In order for the director to be qualified, he must be a local resident or someone holding an Employment Pass, EntrePass, or Permanent Residence Status.

It is also a corporate requirement to maintain a registered office in Singapore where a subsidiary company should keep its statutory documents.

Singapore Branch Office

Although a branch office is similar to a subsidiary company in so many ways as it is allowed to do business activities by its main office, there are some salient differences between them which are as follows;

First, a branch office is treated as a legal extension of its parent company which means that the latter is directly liable for the financial losses and liabilities of its Singapore branch.

The next salient difference is that since the branch office is considered as a legal extension of the parent company from other country and thus, considered a non-resident business, it will not benefit from the tax exemptions and other benefits enjoyed by subsidiary companies and local businesses.

Singapore Representative Office

The major disadvantage of a representative office is that it cannot engage in a profit-generating and other activities deemed "commercial" because it is not treated as a legal business entity.

According to the Singapore Companies Act, a representative office is only permitted to conduct activities such as doing market research on the feasibility of the business in the country, directing local agents and distributors of its parent company and engaging in customer service provided that it will not engage in any technical or repairing inquiries and negotiations.

The permit of the representative office is renewed annually but after three consecutive years, it can no longer be renewed. It is then advisable to move to another business structure such as a branch office or a subsidiary company to be able to continue doing business in Singapore.

So depending upon your needs, any one of the above mentioned business models can be your ideal setup when you decide to expand your company or business in Singapore. However, it is highly recommended that one must approach a reputable company registration firm for consultation and assistance.