Along with the Subsidiary and the Representative Office, the Branch Office is used for setting up a presence of a foreign business in Singapore. This business form ideally fits a situation when a founding company is ready to bear full responsibility for the activity of its Branch Office (BO).
What is the Branch Office in Singapore?
- BO acts as an extension of its overseas parent company and shares the same legal entity with it. It means that the parent firm of the Singapore Branch Office is liable before the law for all office’s problems (debts, legal prosecutions, and so on) and bears full financial responsibility in case of losses. As the Branch Office Singapore stays within the jurisdiction of SG, the overseas parent company may face legal prosecutions in case of its Branch’s mistakes.
- Branch has to stay within the parent company’s activity scope. It isn’t authorized to conclude contracts or buy property on its own behalf.
- All mentioned drawbacks are balanced with one very important advantage: foreign Branch Office Singapore isn’t the tax resident in the country, and, therefore, it isn’t obliged to pay the corporate tax in SG (17%) for the revenues got outside of Singapore. Only the income earned in SG is subject to the local corporate tax. Starting a Branch Office in Singapore, you save on taxes and can use it as an incentive to invest in growth.
How to Open Branch Office in Singapore?
For a smooth and successful registration of a new BO, it’s crucial to fulfil these Singapore Branch Office requirements:
- New Branch must have a unique business name that matches the name of the parent company and in the same time doesn’t sound indecent or similar to any other existing Singaporean firm’s name. We will help you to make a diligent name check beforehand to avoid any coincidences.
- Setting up a Singapore Branch Office, you must add to its staff 2 local Singaporean agents (adult citizens or permanent residents). You can also move your key staff to Singapore on appropriate working visas (for example, the Employment Pass). Submission of work visas applications can be made after the Branch Office’s registration is finished. We will help you to find the most winning visa solution for your professional staff.
- Foreign Company’s Branch Office Singapore must be registered on a valid Singaporean address.
- BO doesn’t get its own MAA (Memorandum and Articles of Association), and, therefore, it is required to act according to the parent company’s MAA.
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Advantages of Setting up Singapore Branch Office
- Unless the Branch’s income is earned through operations in Singapore, it is freed from paying the corporate tax. Singapore allows repatriation of revenues to the parent company.
- You can bring your own staff from overseas on appropriate work passes.
To undergo the Branch Office registration Singapore with the ACRA, the overseas parent company needs to provide this information:
- Name of the Branch Office (its availability must be checked in advance)
- Short Branch’s business activity overview
- Parent company’s certificate about the incorporation and MAA (certified copies)
- Branch Office’s registered address
- Data about the parent company’s directors
- Data about the local Singaporean agents (2 individuals)
- Memorandum issued by the parent company that describes the local agents’ powers
Unless your documents are in English, you have to involve a professional translator and endorse the translated version before doing the submission. Paperwork for the branch office setup in Singapore is quite tedious and time-consuming; it requires awareness of the local document standards. As managing the paperwork is associated with doing the name check for the Branch Office, finding and appointing Singaporean agents, and registration of the BO on a certain local address, it is reasonable to get the documents prepared by the same team that orchestrates your Branch Office registration. To enable us to shoulder your incorporation, please gives us such basic data:
- Parent company: its registration documentation (certificate and MAA).
- Local Singaporeans: copies of ID cards.
- Foreign directors: copies of their passports, proofs of their foreign registration, bank statements, and their business profiles.
After doing the objective assessment, we will be able to shoulder all administrative work and guide you through the procedure of the foreign Branch Office registration step by step.
Singapore Branch Office Setup Procedures
For establishing a Branch Office in Singapore, the overseas parent company needs to enlist local tax, visa, legal and business registration services because the Branch Singapore legislation doesn’t allow overseas individuals to the company registration backstage. As a mediator, Сoincorporating will represent your business for Singaporean authorities in order to get brief approval and registration. Enlisting our Branch setup consultation, you not only get instructions on how to register a Branch Office step by step but also get the whole registration handled by our qualified specialists without a need in your presence in SG.
Business incorporation in SG is one of the fastest on our planet: you can get your own business registered in a single day. Nevertheless, before this short registration procedure, lots of groundwork must be done:
- Branch Office name check and reservation with the Company Registrar (reservation is valid during 2 months and can be extended afterwards)
- Appointing local Singaporean agents
- Getting the Singaporean address
- Preparing the Branch Office paperwork
- Registration at the ACRA
After we finalize your Branch Office registration, you will receive an email containing your new company’s registration number. This number acts as your main incorporation document in SGas hard copies aren’t used for business regulations here. But if you need to get the hard copy for your own needs, you can make an inquiry. To finish launching your new company, you might also need to get a local bank account, relevant business licenses (if needed) and get registered for the value-added tax (you need such registration if you expect your Branch’s turnover to reach 1M SGD).
We will lead your undertaking through all of these stages until you successfully launch your foreign Branch Office in Singapore. As was already mentioned, you don’t have to arrive in the country for taking part in the registration. After you share your business idea with us, you can sit back and continue doing your business while we assess you case, develop a strategy, and manage the registration in the briefest and efficient way.
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Opening Branch Office in Singapore Processing Time
Modern computer technologies streamlined the Branch Office registration Singapore with the Company Registrar, and therefore, entrepreneurs are freed from standing in a queue and different red tape headaches. After the administrative groundwork is done according to the Registrar’s standards, the final registration takes several hours. The whole procedure of Singapore Branch Office setup– from the first assessment to getting the incorporation certificate – would take us up to 10 days depending on the case. If you strive to get a perfect incorporation result without going through administrative hassles, entrust us with your idea and sit back.
The Branch Office doesn’t perform as the Singapore tax resident, and, therefore, this form of business doesn’t have to pay the corporate tax for revenues earned abroad. But if the revenue was earned during operations in Singapore, the corporate tax of 17% must be paid for it. Owners of the Branch are also freed from paying the gain tax in SG.
Difference between Company Types in Singapore
There are 3 legal forms of business that are usually used for setting up the foreign firm’s presence: the Subsidiary, the Branch Office, and the Representative Office. Only the Subsidiary and the Branch can be used for the profitable activity. The Subsidiary is the safest business form as its legal entity is separated from the parent company’s one. This ensures the safety of the personal assets of the Subsidiary’s founders and members. The BO shares the same legal entity with its parent firm, and this fact exposes the parent firm to a great financial risk. This risk, however, is counterbalanced by the advantageous Singapore Branch Office tax mode that eliminates the corporate tax. Taxation of Branch Office in Singapore depends on whether the income was earned on the territory of Singapore or somewhere abroad.
There is a huge difference between Branch and Representative Office Singapore, as the latter can be used only for non-profit marketing research activities. RO is a temporary business formation that can precede opening a Branch Office in Singapore or another business form with limited liability.
Singapore Companies Annual Filing Requirements
The peculiarity of the Branch’s annual filing is that accounts of both the parent company and the Branch must be filed. As the government frees the Branch Offices from paying the corporate tax, it needs to see the annual report of the company’s activity in order to ensure the SG-based Branch doesn’t get revenues in Singapore tax-free. The Branch Office needs to make annual auditing because its founder is a corporate body.If you have a massive documentation, it is reasonable to handle the bookkeeping every month to avoid delays.
Basic documentation that must be filed by the Branch:
- Until the end of every November, the Branch and its parent company have to file their Tax Return based on the revenues they got in the financial year that ends in the preceding one.
- Branch Office must hold annual general meetings and file its annual return and audited accounts no later than 2 months after each meeting or within 7 months after the financial year ends.
Despite the local filing system is modernized and simplified, it is normal for foreign entrepreneurs to face troubles at the beginning of dealing with it. If you need help in the paperwork, please reach out to our incorporation consultants for a piece of expert advice. With our competent assistance, you will grasp all niceties of the filing procedures and running a business in SG. We will help you to build up your presence and business confidence in Singapore.