How to Register A Singapore Branch Office

Singapore is and has always been one of the most business-friendly countries in the world. The location is strategic for companies that are looking to launch their expansion into the Asia-Pacific region. In this article, we discuss how to register a Singapore branch office and its benefits.

Foreign companies planning to begin operations in Singapore can choose from a few options. They can operate through an offshore company, a Singapore representative office, a Singapore branch office or just incorporate a new subsidiary.

Why register a branch office?

Similar to a subsidiary, a branch office allows the foreign company to begin their business operations in Singapore. The foreign company can generate profits and also hold properties in Singapore.

Unlike a subsidiary, a branch office is an extension of the foreign company, instead of a different legal entity. The branch office must share the same name as the foreign entity, and sign any contracts under the foreign entity’s name. The purpose is to enable the branch office to leverage its foreign company’s brand to do contract tendering and get financing in Singapore.

The fact that a branch office is not a separate legal entity, brings about a number of disadvantages. They are:

• The lack of limited liability: The foreign company is liable for all debts and contracts that the branch office incurs and signs respectively.
• Non-tax-resident: The branch office is not a tax-resident in Singapore, not unless the foreign company operates locally in Singapore. It means that a branch office will be ineligible for tax exemptions on its profits. You can refer to our article about the benefits of Singapore tax residency.
• Limited activities: The branch office will not be able to carry out business activities that the foreign company is unable to undertake. For illustration, if the foreign company’s constitution or by-laws disallow it to carry out certain business activities, the branch office will also be restricted to the same business activities.

However, a branch office is still useful for a foreign company to establish its business in Singapore for a start. It allows the foreign company to undertake contracts under its own brand name. At the same time, to leverage its existing brand image and reputation.

Establishing a branch office in Singapore

You can register branch offices in Singapore online through the Accounting and Corporate Regulatory Authority (ACRA).

Foreign companies will need to engage the services of a registered filing agent such as a corporate secretarial firm in Singapore to help with the registration.

The corporate secretarial firm must obtain all the necessary documents for submission to ACRA:

• The name and registered office of the foreign company in its country of jurisdiction
• A certified true copy of the certificate of incorporation of the foreign entity
• A certified true copy of the constitution (memorandum of articles) of the foreign company
• A notice of its registration number, business description and legal entity type
• Personal particulars of all the directors in the foreign company
• Personal particulars of at least 1 Singapore resident, who is the authorised representative of the Singapore branch company
• Written consent of appointment by the authorised representative of the branch company
• Details and operating hours of the branch office here
• The most recent audited financial statements of the foreign company (if required under the laws of the country of incorporation)

Besides the above requirements, the corporate secretary may also request its own documentary requirements from you.

The registration process generally takes 2 to 14 working days after submission. However, it may take longer if it is referred to the Registrar or other government agencies for additional checks and approval.

An example would be if the foreign company is planning to open a branch office to offer medical services in Singapore, its application will be referred to the Singapore Ministry of Health (MOH) for approval. A list of industries where authority approval is needed can be found here.

What’s next after setting up a branch office?

Once successful registration, the branch office can begin operations in Singapore. But certain licences may still be needed before it can carry out some business activities, such as the opening of a restaurant. Most licences are applied through GoBusiness, a one-stop Singapore government portal.

The branch office must apply for the relevant employment passes or permits if it plans to transfer some foreigners to work here in Singapore.

The branch office can decide to either open a new corporate bank account here in Singapore or use the same foreign bank account as the head office.

Do note that the foreign company (head office) must comply with all existing filing requirements of its financial statements with ACRA. On top of that, it must prepare the submission of its audited financial statements of the branch office in Singapore. Hence we highly recommend that you set up a new corporate bank account for the branch office.

Closing of a branch office

When the branch office no longer has a place of business or has ceased business operations within seven days of such cessation in Singapore, you can shut it down by notifying ACRA. Such situations arise when the foreign company enters into liquidation in its country of incorporation.

The authorised representative (nominee director) of the branch office can apply to ACRA to strike off the branch office from the register in the situations below:

• The sole authorised representative or nominee director wishes to terminate his service but is unable to due to the foreign company’s failure to either respond or appoint a new authorised representative within a period of 12 months, starting from the date of the resignation notice.
• The only authorised representative has asked for instructions for the closing of the branch office but the foreign head office has failed to give any instructions within a period of 12 months from the date of such request.

In the absence of an authorised representative, the application for striking off can be filed by the corporate secretary.

Common questions

1. Who can hold shares in a branch office?

As stated earlier, a branch office is just a simple extension of the foreign entity, thus there is no separate set of shareholders. The shareholders of the initiating foreign entity in essence own the branch office.

2. Do I need to be physically present in Singapore for the setting up of a branch office?

Physical presence in Singapore is not necessary to set up a branch office. Many corporate secretarial firms such as ours are capable of incorporating online.

The setting up of a corporate bank account in certain cases may require a physical presence on a case by case basis.

3. How to register for corporate tax?

A branch office will be registered with the Inland Revenue Authority of Singapore (IRAS) automatically for corporate tax purposes once its incorporation is completed with ACRA. The branch office must register for Goods and Services Tax (GST) with IRAS if the taxable annual turnover is more than SGD $1 million.

4. What are the tax rates?

All companies, including branch offices, are subjected to a flat corporate tax rate of 17% on their taxable income. If their annual taxable turnover exceeds S$1m, they incur a 7% GST on their business purchases.

5. Can I send the profits of the branch office back to the foreign (head) company?

Singapore has no major restrictions on remittances or capital movements (i.e. transferring of funds in and out of Singapore). A branch office is an extension of its foreign entity. Thus, the branch office is free to remit its profits and capital back to the foreign entity.

Incorporating a branch office is a fairly straightforward process in Singapore. It can be an attractive option for foreign companies looking to set up their business here.

Contact Us

If you need assistance in setting up a branch office in Singapore, do get in touch with us today!

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