Singapore Branch vs Subsidiary vs Representative Office
A foreign company planning to setup an office in Singapore has three options: 1) Branch Office; 2) Subsidiary Company; or 3) Representative Office. This article compares these three type of entities to help a foreign company decide the best option for their particular needs.
You may also want to refer to the related guide foreign company options in Singapore.
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 of the ways in which a foreign company may carry on business in Singapore are by registering a branch office or by incorporating a limited liability company (i.e. subsidiary company) in Singapore.
|Singapore Branch||Singapore Subsidiary||Singapore Representative Office|
|Legal Type:||Not a separate legal entity but an extention of the parent company||Separate legal entity distinct from its parent company||Has no legal status but just 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 with a 3 year maximum|
|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||N/A as Rep Office cannot generate income|
|Annual Filing:||Must file branch office as well as parent company’s accounts||Must file accounts of the Singapore subsidiary||N/A|
|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|