All companies in Singapore are bound by the Companies Act and required to registered with the Accounting & Corporate Regulatory Authority (ACRA). Foreign companies looking to establish their presence in Singapore can do so either in the form of a branch office, subsidiary company, or a representative office.

Branch office – A branch office is an extension of a foreign company that establishes a place of business in Singapore. It is not a legal entity, with the parent company being liable for the debts and liabilities of the branch office. Opening a branch office helps to facilitate expansions of operations and revenue generation in Singapore for a foreign parent company.

Subsidiary company – A subsidiary company in Singapore is a private limited company that allows either a foreign or local company as its major/sole shareholder. Provisions that allow for 100% foreign shareholding-with shareholder’s liability limited to the values of the shares it subscribes to-makes this type of entity the most preferred choice for foreign companies to register their business in Singapore.
Unlike a branch office, the subsidiary company has a legal identity distinct from that of the parent company and comes into being upon registration under the Companies Act (Cap 50) with ACRA.

Representative office – Companies not yet sure of their business potential in the Singapore market can benefit by setting up a representative office in the city to analyse the environment and gauge its profitability prospects.

A representative office is a temporary establishment that can perform limited activities to allow a foreign/parent company to assess its business viability before registering an office in Singapore. It does not have any legal status and can only serve as a temporary option for companies not yet ready to establish a full-fledge venture in the country. A representative office cannot enter into business contracts, issue invoices/receipts, or offer services to clients etc.

For more details on how to register your foreign company, click here.

Given the three preferred business structures, most foreign private limited companies would choose to register their company as a subsidiary for the following reasons:

• As a separate legal entity, the parent company would be protected from the liabilities of the subsidiary.
• Shares of the subsidiary can be wholly owned by a foreign parent company.
• A subsidiary company is identified as a local Singapore company and hence can benefit from several government incentives, tax subsidies and other attractive schemes available.

Once your business has been officially registered under ACRA, the next step involves setting up a bank account. You can choose from a list of both local and international banks of good standing including HSBC, Standard Chartered, OCBC, DBS among others.

In addition to this, some business ventures would require a special license to operate such as food businesses, childcare centres, moneylenders, financial services etc. These licenses are issued by various Singapore government agencies and must be applied for once your company has been registered with the registrar of companies.

Singapore has been long recognized as an ideal hub for global businesses to set up their headquarters or expand their business ambitions. Strong trade incentives, comprehensive and attractive tax schemes, robust intellectual property laws make this country the easiest place to do business.