how to incorporate company in singapore

Singapore is no doubt the most preferred destination in Asia region by many foreign brands. The country is well endowed with essential resources that open it to the various lucrative regional markets. Other factors that make it ideal for foreign companies include lucrative consumer markets, unlimited investment hotspots, and affordable resources.

Let us proceed and look at the various options available for international companies that wish to get registered and incorporated in the country.

Subsidiary Company

Based on the current interpretation of the company incorporation policy, a subsidiary company is a private limited company that is locally incorporated and a large number of its shares are held by foreign or local company. The Singapore government permits 100% foreign shareholding in companies, and this makes it possible for international companies to have a 100% shareholding in a locally registered private company.

This registration company option is ideal for medium and small foreign businesses that are keen on establishing a niche market and presence in the country. It is also important to note that this type of company is interpreted by law as an independent from the original company. This means that liabilities such as debts cannot be extended or transferred to the main company.

Branch Office

A branch office is similar to a subsidiary company; the only difference between the two is that the branch office is considered as a part of parent foreign company. Therefore, the foreign company is liable for debts and other liabilities of the branch office. In the context of taxation, the branch office is treated as a non-Singapore entity and so it does not qualify for incentives such as tax exemptions. Only revenue generated from its activities in Singapore is subject to local corporate tax rates.

The branch office name should be exactly the same as the main brand name. This name has to be approved by Singapore company registrar before the office starts to operate. According to Singapore Companies Act, the branch office is required to have a physical address in the country and appoint one or more authorized representatives who are citizens of Singapore.

Representative Office

Businesses that exist in other countries but do not wish to undergo the company registration and company incorporation processes outright can decide to put up a representative office here. Concisely, the office is not recognized as a legal entity, and so it cannot engage in any form of business activity that will generate revenue for the foreign company.

However, it is allowed to conduct market research on behalf of the primary company. Just like the branch office, all liabilities of the representative office are covered by the foreign company. It should be headed by a chosen representative of the parent company and should not hire more than five Singaporeans to work as support staff.

Compare the pros and cons associated with each of the above options before you register a company in Singapore to make informed decisions from the start.