With numerous tax incentives and flexible policies, our island nation attracts considerable foreign investment every year to open new company in Singapore. The government has eased the entire process of company incorporation, and a considerable part of it is automated, as well. Offshore companies and investors have three choices when it comes to register company in Singapore. In this post, we will talk about all of them in detail.
A subsidiary company
Planning a private limited company in Singapore is pretty easy. One or many of the shareholders of the company can foreign entities, both individuals and offshore companies. This is one of the few countries, where you can have 100% foreign ownership. A Singapore subsidiary company is the best choice for startups and entrepreneurs that wish to take the advantages of local incentives and tax reforms. The company will be registered under the Companies Act and will be treated as a separate entity. In short, the loans and liabilities of the aforesaid company will not be extended to the parent company or other shareholders. To register company in Singapore, you must choose a name, which must be approved by Accounting and Corporate Regulatory Authority, also known as ACRA. The company must have one local director, who is a citizen of the country or holds an EP. The concerned enterprise should have a registered office address and as long as it fulfills necessary criteria, it can enjoy the benefits of favorable tax treaties.
A branch office
As the name suggests, this is like having a branch of your brand in Singapore. For annual tax compliance, the branch office must also submit the audited accounts of the parent company. This is the precise reason why many companies prefer having a subsidiary rather than a branch office. You need to consider long-term business plans and overall tax benefits receivable in each case, before taking a call on this aspect. Branch offices that are registered with ACRA will be treated as foreign entities, and therefore, some of the tax exemptions meant for subsidiary companies might not be applicable for these branch offices.
A representative office
If you plan to have a branch for your brand in Singapore without any expectations of immediate profits, you can open a representative office. This is more like a temporary arrangement because the setup will not earn any revenue. You can have the representative office for three years, after which it must be upgraded and converted into a branch office or a subsidiary company.