Singapore is considered as the business gateway of Southeast Asia. Thus, many foreign businesses like to set up companies in Singapore. Are you planning to start a business in Singapore? If so, you can use the services of a company registration agency. However, you still need to learn the requirement process for a foreign company set up in Singapore.
In this article, we’ll cover the three types of foreign company set up in Singapore options. These types are branch office, subsidiary office, and representative office registrations. We will also discuss what each registration type is. We will also cover the qualifications and requirements of each registration process.
Do you only intend to test the Singaporean market? If so, registering as a representative office is your best foreign company set up in Singapore option. In this option, you’ll get 100% of company ownership. If you are a finance-related foreign company set up in Singapore, you are required to register with the Monetary Authority of Singapore (MAS). Otherwise, you will need to register with the International Enterprise Singapore (IE Singapore).
A foreign representative set up company in Singapore is only limited to five resident employees. They are not allowed to have any legal staff. Thus, there shouldn’t be any contract signing, trading, and other legal-related business activities. In case of any legal issues, the head office will be liable for the representative office.
It is also required that the chief representative must come from the head office. However, the law only allows one chief representative. This is a statutory requirement.
The law also requires that this type of set up company in Singapore must meet the other two statutory requirements. The first one is that the sales turnover of the foreign set up company in Singapore must exceed US$250,000. The other one is that the foreign needs to show proof that they are established for more than three years. You will be required to submit documentary proof upon registration.
Aside from that, there are also some annual compliance requirements. The foreign company should annually renew its registration. After three years, it is required that the start business in Singapore should no longer renew as a representative office. It should re-register as either a branch office or subsidiary office.
If you are confident to start business in Singapore at once, registering as a branch office is what you need to do. A branch office registration is needed for any business entity that is an extension of a foreign parent company. This is best recommended for medium to large-sized foreign businesses.
In this option, a foreigner is still allowed to have 100% ownership of his branch office. Since a branch is an extension of the foreign company, any legal issues committed by the branch office is the liability of the parent company. This status will also exclude the branch office from getting tax exemptions.
A foreign branch company is allowed to do any business activity. That is permitted as long as it falls under the business scope of the parent company. They can also send back 100% of the sales they made in Singapore. They are only taxed on the earnings made in Singapore. This is one of the long-term business registration options in Singapore. In addition, a foreigner can have no restrictions when it comes to employing workers.
However, a foreign start business in Singapore should follow the statutory requirements. One of them is a registered office address in Singapore. Another one is that one of the branch agents should be a Singaporean resident. This resident employee should be allowed to process services. It is also required that the branch name should be similar to the head office’s name. The branch name should get approval first before continuing in the registration process.
If you intend to be locally corporated, registering as a subsidiary office is what you need to do. A subsidiary office is incorporated as a local private limited company. It requires a corporate entity as one of its main shareholders. This is also a recommended registration option for medium to large-sized companies.
Similar to the other options, foreigners are allowed to have 100% ownership of their set up company in Singapore. A subsidiary is considered separate from its foreign mother company. It can conduct any business activity as long as it complies with the law in Singapore. If the subsidiary committed a transgression of the law, the mother company is not liable.
However, a subsidiary can enjoy tax exemption benefits. Its status allows them to get government benefits including local business loans. It can also repatriate 100% of its sales back to the mother company. In addition, it has no limitations on the number of employees hired.
There are statutory requirements that a foreign set up company in Singapore must follow. The subsidiary needs to have a registered office in Singapore. It is also required that one of the directors should be a Singaporean resident. In addition, there needs to be a company secretary.
Need help with Singapore business registrations
Now you know the three types of foreign business registrations. you now also have an idea of their qualifications and requirements. It is simple to start a business in Singapore. However, if you want a fast business registration, there is an ideal solution for that. You can hire the services of a company registration agency in Singapore. Here at WLP, we offer a one-stop business solution for your foreign start business in Singapore. Contact us for more details.