Singapore Branch vs Subsidiary vs Representative Office
A foreign company planning to setup an office or expand their business in Singapore has several options that they may consider for their company structure. This article compares the three types of business entity to help a foreign company decide the best structure that is most suited to their particular needs.
A key point to note is that a representative office is not allowed to engage in any business activity except market research and liaisoning activities. Two ways in which a foreign company may conduct business in Singapore are by registering a branch office or setting up a limited liability company (i.e. subsidiary company).
|Singapore Branch Office||Singapore Subsidiary Company||Singapore Representative Office|
|Legal Type:||Not a separate legal entity but an extension of the parent company||Separate legal entity distinct from its parent company||Has no legal status, a temporary administrative arrangement|
|Liabilities:||Liabilities extend to parent company||Liabilities limited to subsidiary||Liabilities extend to parent company|
|Entity Name:||Must be the same as the parent company||Can be the same or different from parent company||Must be the same as parent company plus must include ‘Representative Office’|
|Allowed Activities:||Must be the same as the parent company||Can be the same or different from parent company||Can only conduct market research or feasibility studies|
|Validity Period:||Registered forever until closed||Registered forever until closed||Has to be renewed every year up to a maximum of 3 years|
|Normal Registration Time:||1-2 days||1-2 days||3-5 days|
|Taxation:||Taxed as non-resident entity, local tax benefits not available||Taxed as Singapore resident entity, local tax benefits available||Not applicable as representative office cannot generate income|
|Annual Filing:||Must file branch office as well as parent company’s accounts||Must file accounts of the Singapore subsidiary||Not applicable|
|Bank Account:||Can open bank account in Singapore||Can open bank account in Singapore||Can open bank account in Singapore to run the cost centre operations. Must be funded by the parent company.|
|Staff Hiring:||No restrictions on hiring local or foreign staff||No restrictions on hiring local or foreign staff||Chief Representative must be a staff member from the parent company. Can have only five employees.|
|Appointment of Officers:||Must appoint at least one local authorised representative||Must appoint at least one local resident director||Must appoint a Chief Representative who will relocate from headquarters|
You may also wish to refer to the related guide foreign company options in Singapore for more information.