Singapore Company Registration Options for Foreign Corporate

Last modified: September 7, 2015

Foreign Incorporations

The major advantage of Singapore business incorporation is that the business owners enjoy lower tax rates offered by this pro-business country. Singapore also offers incentives to the foreign corporate for establishing their regional headquarters and offices on its soil. By doing so, these entities enhance their reach to the Asian markets.

Singapore has shaped its policies to be conducive for the growth of the businesses. This country offers ‘ease of doing business’, to the businesses operating under its jurisdiction. The start-up businesses are the biggest beneficiaries of these policies.

A new Singapore tax resident company gets 100% corporate tax exemption on its initial chargeable income of up to S$100,000 and the next, S$200,000 are taxed at only 8.5% of the tax rate. There is no tax on the capital gains or the inherited wealth. The personal income tax rates are also affordable and range from 0% – 20%.

All of these factors attract a large number of foreign corporate to invest and setup company in Singapore.

Business Structures for the Foreign Incorporations in Singapore

Following are the business structures that the foreign corporate must investigate before starting or registering their Singapore companies.

Subsidiary Company

A Subsidiary company is a form of limited liability company that is preferred by the foreign-registered corporate to establish their businesses in Singapore. This business structure limits the liability of the shareholders of the company to their investment in the company’s shares.

A Singapore subsidiary company has a separate legal identity from its parent company. The losses and debts of the subsidiary are its own responsibility, which protects the assets of the parent company. It is a full-fledged Singapore tax resident company and can claim the tax exemptions, incentives, and the rebates offered by the Singaporean authorities. Most importantly, Singapore authorities allow the foreign corporate to have 100% shareholding in a subsidiary company.

Branch Office

A large number of foreign Small and Medium Enterprises look upon Singapore as the most favored investment destination. These entities favor setting up of Singapore branch offices to start their business activities. The Singapore branch offices do not have a separate legal identity. The Company Law of Singapore stipulates that the name of a branch office must correspond to that of its parent company.

The Singapore authorities treat them as the extensions of their foreign-registered parent companies. The branch offices are non-resident Singapore businesses for the tax purposes. It means these entities do not qualify for most of the tax exemptions, incentives, and rebates offered by the authorities. The parent company is responsible for the loss and the debts of its Singapore branch office.

Representative Office

Singapore allows foreign corporate to legally enter its market and carry out the market surveys and research activities by registering a representative office. These Singapore-based entities forward the output of their activities to their parent companies. The gathered data is used by the parent company to decide whether to enter the Singapore market or not.

Singapore representative offices, by law, cannot participate in business activities. They are not separate legal entities. The parent company is held liable to the losses and debts accruing out of the activities of its Singapore representative office.

Singapore’s geographical location allows it to play a major role as an entrepot in the trade between the new and old world. It has one of the busiest ports in the world and its airport is renowned for efficiency. Singapore offers excellent air connectivity with the outside world, which makes it easy for the business managers to reach emerging markets of Asia. It offers a safe social environment and excellent education facilities. Politically, Singapore is a very stable country with the negligible amount of corruption among its ranks. All of these factors make Singapore an ideal relocation destination for a family oriented business owner.