Features of Singapore Subsidiary Company and Singapore Branch Office


Singapore maintains an open policy for foreigners when it comes to business opportunities. Business formats were reviewed and industry standards were specified in order to attract startup businesses, encourage investors and guide them accordingly in legal business processes and necessary documents. Singapore Subsidiary Company and Singapore Branch Office are two of the most popular business formats available in Singapore. Both are engaged in trading and revenue generating activities.

A business format is an essential factor of a business success. For this reason, we have prepared the basic features of the two business formats which will serve as a preliminary guide for businessmen who are planning to start, incorporate and establish a business in Singapore.

Singapore subsidiary company features:

The company is incorporated as a limited liability company.
It has a separate legal identity.
The foreign parent company’s liability is limited to the value of the shares it subscribes into the subsidiary.
Foreign parent company may own 100% of the subsidiary.
Tax incentives with at least one individual shareholder with minimum 10 percent shareholding.
The company is allowed to have a maximum number of 50 shareholders.
They are required to audit accounts and file audit reports.

Singapore branch office features:

The branch acts as an extension of the foreign company.
It does not have a separate legal identity.
The foreign parent company is liable for the acts, losses and debts of its branch office.
They are required to appoint two staff members to act as agents, both local and foreign, to support the business administration of a branch office.
They are considered non-resident for tax purposes.
There are no tax incentives or exemptions for a branch office.
They are required to file audited accounts that include parent company’s audited reports.
Company’s constitution and activities are .directed by the foreign parent company’s
Memorandum and Articles of Association.

These features have already outlined the advantages and disadvantages of the two business formats, thus giving foreign companies a clear idea on whether to choose Singapore subsidiary company or Singapore branch office for their operation.  The decision will only vary depending on the objectives, competitiveness and financial capacity of the company.

Whichever format is chosen, all foreign companies are required to engage a professional service agent to assist in Singapore company incorporation, accounting, tax, work pass and related compliance services  prior to actual business operation.