Information On The Different Types Of Singapore Company Formations

By Author: Roger Blassy
Total Articles: 1
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Singapore has always been considered as one of the best business centers in the Asia Pacific region due to its proximity with major markets, pragmatic government, tax benefits for foreign companies, and viable corporate laws.

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

Despite the fact that it is a subsidiary company, it is considered as a independent legal entity because it is not directly obligated to the losses, debts and other unfavorable activities incurred by the parent company in other countries.

Essentially, this business entity is a locally incorporated private limited company which just happens to be owned by foreigners instead of local residents. With this arrangement, a subsidiary company enjoys the same tax benefits and exemptions provided to local businesses.

According to the Accounting and Corporate Regulatory Authority (ACRA), a foreign company is legally ...
... required to hire at least one director who must be a local resident or holder of 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;

Unlike a subsidiary company, the parent company is directly accountable for financial losses, liabilities and other unfavorable business circumstances of the branch because the branch office is considered a legal extension of the parent company.

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

A representative office is not treated as a legal business entity per se as it is prohibited to engage in any profit-generating and commercial activities.

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.

Resource Box:
AsiaBiz Services has been assisting clients from all over the globe for Singapore company registration matters. It facilitates processing and submission of requirements to incorporate a Singapore Company. Our success rate is phenomenal, and all most all of our enterprise clients have entrusted us, with the routine management tasks such as book keeping and secretarial services and we continue to impress them beyond our promise.