Company Formation in Singapore


S & F Consulting Firm Limited.

S & F CONSULTING FIRM LIMITED , Company Formation in Singapore, Foreign Company Registration in Singapore

Foreign Company Registration (100% Foreign Investment, Joint Venture, Virtual/ Branch/ Liason Office, Foundation), Taxation, Accounts & Audit, Legal, Company Secretarial & Management Consultancy.

Company Registration/ Formation/ incorporation in Singapore, Foreign Direct Investment in Singapore-FDI, FDI in Singapore, Doing Business in Singapore

Company Formation / Registration in Singapore

Subsidiary Company
A subsidiary company is a locally incorporated private limited company whose majority shareholder is another local or foreign company. Singapore allows 100% foreign ownership in companies. Therefore a foreign company may incorporate a local limited liability company in Singapore (ie subsidiary company) and own 100% of the shareholding.

Branch Office
A branch office is treated as an extension of the foreign company. This is an important point since it means that the foreign company’s head office bears the ultimate responsibility for any liabilities arising due to the acts of commission or omission of the Singapore Branch Office. From a taxation point of view, a branch office is generally considered a non-resident entity and therefore not eligible for the tax exemptions and incentives available to local companies in Singapore. Consequently, setting up a branch office is a less attractive option for small to mid-size businesses.

The name of the Singapore branch office must be the same as that of the head office and must be approved first before branch office registration. The company registrar generally approves the proposed name unless a name is identical to an existing company name.

Singapore Companies Act requires that a branch office appoint 2 agents who are ordinarily resident in Singapore to accept services of process and notices. A branch office must have a registered office address in Singapore.

A Singapore branch office is allowed to conduct any type of business activity that falls within the scope of its parent company and can repatriate its earnings and capital. The portion of the income of the branch office, which is derived from or attributable to the operations carried out outside Singapore, will not be subject to taxes. Only the earnings derived from its operations in Singapore will be subject to the prevailing local corporate tax rates.

For a complete guide on setting up a branch office in Singapore, refer to Singapore branch office registration guide.

Representative Office
Foreign companies that are only interested in exploring the market or managing the company affairs without conducting any business activity of profit yielding nature, can setup a representative office in Singapore. A representative office is a temporary setup without any legal persona. Therefore it cannot enter into any contract, engage in trading directly or on behalf of the foreign company, lease warehouse, raise invoices, open letter of credit, etc. Representative office in Singapore can only undertake market research or feasibility studies on behalf of its parent company.

The foreign company bears implicit liability for the activities of the representative office in Singapore. The representative office must be staffed by a representative from the foreign company’s head office and can engage a small number of local support staff not exceeding five employees.

International Enterprise Singapore (IE Singapore) is the registration authority for representative offices for most of the industries including manufacturing, business services, commerce and other sectors but excluding banking, finance, insurance that have to be registered with the Monetary Authority of Singapore (MAS).

The foreign company and its assets cannot be held for the debts and liabilities of the subsidiary. Raising funds locally or availing government incentives are easier. A subsidiary company will generally enjoy a resident status and can avail the benefits of several favorable tax treaties that Singapore has concluded.

Advantage of a Branch: 
It is administratively easier to maintain than a company. In addition, closing a branch is easier than liquidating a company.

Disadvantage of a Branch: 
The liabilities of a branch extend to its head office. A branch having a registered office in Singapore means that its head office (foreign corporation) can be served with legal process in Singapore. Another disadvantage is that the accounts of the head office must be lodged with the ACRA and they are available for public inspection.

Comparison Chart for Subsidiary Company Vs Branch Office Vs Representative Office

Types

Subsidiary Company

Representative Office

Branch Office

Entity Name

Need not be the same as parent company

Must be the same as parent company

Must be the same as the parent company

Allowed Activities

Can conduct all business activities

Can only conduct  market research or coordinating activities

Must be the same as the parent company

Suitable For

For local or Foreign Companies that wish to expand  their operations in Singapore

For Foreign Companies that wish to set up temporary vehicle in Singapore to conduct research and act as liaison office

For Foreign Companies thay wish to expand  their operations in Singapore

Disadvantages

Continuing Compliance  Obligations eg Financial Reports, Audit, AGMS, etc

It is a temporary vehicle and cannot generate revenue

Continuing Compliance  Obligations eg Financial Reports, Audit etc

Ownership

Can be 100% foreign or locally owned

No Ownership

Owned 100% by the head office

Separate Legal Entity

Yes

No

No

Cap on Number of Members

Yes, max 50

Not Applicable

Not Applicable

Minimum Setting up Requirement

Min One shareholder, that can be an Individual or corporate (100% local or foreign shareholding allowed. Must have at least one resident director

Must appoint a Chief Representative who will relocate from headquarters

Must have two Singapore Resident Agents

Limited Liability

Yes

No

No

Need for Audited Accounts

Yes

No

Yes

Filing of Accounts with ACRA and IRAS

Yes

No

Yes

Annual Filing

Must file audit report of subsidiary

Not Applicable

Must file branch office’s as well as parent company’s audit reports

Tax Treatment

Taxed as Singapore resident entity, local tax benefits available

Not Applicable

Taxed as non-resident entity, local tax benefits not available

Tax Benefits

A subsidiary company, with at least one individual shareholder with minimum of 10 percent shareholding, is entitled to local tax incentives and rebates

No Corporate tax. Employees have to pay personal tax

Partial tax exemption

Cessation of Business upon Death of a Member/Partner

No. Equity shares go on in perpetuity

Not Applicable

No

Validity Period

Perpetually until deregistered

This is a temporary Setup. It is intended not to last more than 3 years

Perpetually until deregistered

Normal Registration Time

3 hours

3-5 days

3 hours

Appointment of Officers

Must appoint at least one local resident director

Must appoint a Chief Representative who will relocate from headquarters

Must appoint two resident agents

Governing Body

ACRA & IRAS

International Enterprise Singapore

ACRA & IRAS

Fees: Lower cost/ Fees/ Charge

Email us: contact@sfconsultingbd.com
Singapore City, Singapore

 

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