Foreign investors have a wealth of options when it comes to structuring their business presence in Singapore. They should carefully evaluate their specific business goals and requirements to determine the most suitable corporate structure for their operations.
This chart provides a side-by-side comparison of the three incorporation options for foreign companies intending to set up and operate in Singapore, namely: a representative office, and a branch office.
Representative Office
A representative office in Singapore represents the most basic form of business presence in a foreign country, though it comes with significant limitations. Essentially serving as an initial foothold, ROs typically require registration with the local authorities but are usually restricted from conducting revenue-generating activities.Branch Office
A branch office (BO) functions as a direct continuation of an established legal entity within the company group, expanding into a new jurisdiction. This is usually accomplished through the registration or qualification of a foreign entity in the target country. BOs are established with the intention of generating revenue and operating production facilities within the host country.| Types | Representative Office | Branch Office |
|---|---|---|
| Entity Name | Must be the same as the parent company | Must be the same as the parent company |
| Allowed Activities | Can only conduct market research or coordinate coordinating activities | Must be the same as the parent company |
| Suitable For | For Foreign Companies that wish to set up temporary vehicles in Singapore to conduct research and act as liaison office | For Foreign Companies that wish to expand their operations in Singapore |
| Disadvantages | It is a temporary vehicle and cannot generate revenue | Continuing Compliance Obligations, e.g. Financial Reports, Audit etc. |
| Ownership | No Ownership | Owned 100% by the head office |
| Separate Legal Entity | No | No |
| Cap on Number of Members | Not Applicable | Not Applicable |
| Minimum Setting up Requirement | Must appoint a Chief Representative who will relocate from headquarters | Must have one Singapore Resident Agent |
| Limited Liability | No | No |
| Need for Audited Accounts | No | Yes |
| Filing of Accounts with ACRA and IRAS | No | Yes |
| Annual Filing | Not Applicable | Must file branch office’s as well as parent company’s audit reports |
| Tax Treatment | Not Applicable | Taxed as non-resident entity, local tax benefits not available |
| Tax Benefits | No Corporate tax. Employees have to pay personal tax | Partial tax exemption |
| Cessation of Business upon Death of a Member/Partner | Not Applicable | No |
| Validity Period | This is a temporary Setup. It is intended not to last more than 3 years | Perpetually until deregistered |
| Normal Registration Time | 3-5 days | 3 hours |
| Appointment of Officers | Must appoint a Chief Representative who will relocate from headquarters | Must appoint one resident agent |
| Governing Body | Enterprise Singapore | ACRA & IRAS |
Frequently Asked Questions
What is the difference between a branch and a representative office?
- A branch office is an extension of a foreign company that can conduct business activities and generate revenue in Singapore. It must register with the Accounting and Corporate Regulatory Authority (ACRA) and is subject to local taxes. A representative office, on the other hand, is a temporary setup meant for market research or liaison purposes only. It cannot engage in any profit-generating activities and is not required to register with ACRA but must be approved by Enterprise Singapore.
What is a branch office in Singapore?
- A branch office in Singapore is an extension of a foreign parent company registered to conduct business activities in Singapore. It is not a separate legal entity and must carry out the same type of business as the parent company. The branch is taxed as a non-resident entity, which may limit its access to certain tax exemptions. It must appoint at least one authorized representative who is a resident of Singapore.
What is the meaning of a branch office?
- A branch office is an extension of a foreign parent company that operates in another country, such as Singapore. It is not a separate legal entity and is considered part of the parent company, meaning the parent bears full liability for the branch’s operations. In Singapore, a branch office must register with the Accounting and Corporate Regulatory Authority (ACRA) and appoint at least one local authorised representative. It is typically used for conducting business activities similar to those of the parent company.
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