Comparison of Subsidiary Company, Branch Office, and the Representative Office

Last modified: December 11, 2015

Comparison-of-Subsidiary-Company

A foreign corporate has three options when it wants to incorporate company in Singapore. The choice of the business structure largely, depends on its business needs and the plan of action. Depending on its aims, a foreign-corporate can choose to register a Subsidiary Company, Branch Office, or a Representative Office.

Subsidiary Company

When it comes to choosing a business structure from among the 3 legal constructs to setup company in Singapore, most of the corporate goes for Subsidiary Company. It is incorporated as a local registered tax resident company and enjoys a certain degree of liberties when it comes to enjoying tax rebates, exemptions, and incentives.

Branch Office and Representative Office

A Representative Office is not actually a focal point for many of the foreign corporate, as it is used for collecting the market information by conducting surveys and research. It cannot be a party to the business transactions, which may turn out to be profitable. And, a Branch Office exists as the legal extension of its foreign-registered parent company. It is not Singapore resident business for the tax purposes and do not qualify to tax benefits offered by the Singapore authorities.

Singapore Subsidiary Company, Branch Office, & Representative Office

Comparison Factors Subsidiary Company Branch Office Representative Office
Name of Company No restrictions Same as that of parent Same as that of the parent
Valid Up to Perpetual existence Perpetual existence Initial validity is of 1 year. It can be extended by 3 years.
Legal Status A separate legal entity An extension of the parent company A temporary setup
Liability Responsible to its own losses and debts It is liable to the parent company It is liable to the parent company
Registration Timeline 1 to 3 days 1 to 3 days 3-5 days
Officers’ Appointment At least 1 local director At least 2 local agents A chief representative of the parent company
Hiring of Staff No Restrictions on hiring local and foreign staff No Restrictions on hiring local and foreign staff 1chief representative + maximum of 5 employees
Business Activities Permitted No Restrictions Similar to the activities of the parent company Limited to administrative tasks, market research and surveys
Opening of Bank Account A corporate bank account in Singapore A corporate bank account in Singapore Can open a bank account in Singapore funded by the parent company
Taxed As Resident for the tax purposes Non-resident for the tax purposes Not applicable
Annual Tax Filing Filing of financial statements of the subsidiary company only Needs to file the accounts of Branch Office and its Parent Company Not applicable
Audited Accounts File audited accounts with ACRA and IRAS File audited accounts with ACRA and IRAS Not applicable

The business structure underlying the Subsidiary Company inherits from the Limited Liability Company. Most importantly, it limits the liability of the company’s shareholders to the amount they have used to buy the company’s shares. It is a business structure, which scales to accommodate the needs of the business on the rise. It is no wonder that most of the foreign corporate choose it establish their business in Singapore.