Do Singaporean-owned Businesses have to Abide by the Business Laws of Singapore even after they Expand Abroad?

No, Singaporean-owned businesses do not have to abide by business laws of Singapore after expanding abroad. This is under the assumption that a separate legal entity has been formed abroad.

There are many ways of expanding business abroad. You may set up a new company there, in which you can decide between a branch, subsidiary, related company etc.; or you may use your existing Singapore incorporated company to conduct business abroad through a representative office, or as a foreign company there.

Here are the rules of thumbs:

For example, a Singapore Pte Ltd company expands abroad by setting up a Malaysia Sdn Bhd:

Another example, a Singapore Pte Ltd company expands abroad by doing business in Malaysia without setting up an official company or separate legal entity:

1. Competition Law

The business laws of Singapore are of utmost importance for all who plan to start a business in the country. One of the most important business laws which exists in Singapore is the Competition Law which bans businesses from participating in activities deemed to be anti-competitive through information specified in Sections 34, 47, and 54.

This law has been in place since 2007. It is enforced and administered by the Competition Commission of Singapore (CCS). CCS also has the right to assess instances in which the Competition Law may have been violated as well as punish any business or business owner proven to be in violation of this law.

2. Employment Act

Another important law to be followed by all businesses based in Singapore is the Employment Act of 1968. This employment law is the primary piece of labour legislation existing in Singapore today. It was created in order to raise the standards of employment practices in Singapore as well as to improve the working conditions experienced by employees in the country.

Most, but not all, workers who are based in Singapore are protected by the Employment Act. Those to whom the Employment Act does not apply must determine the rights to which they are entitled by engaging in a discussion with their respective employers.

3. Electronic Transactions Act

All electronic transactions performed by businesses based in Singapore are governed by the Electronic Transactions Act. The Electronic Transactions Act came into force in 1998 and was amended in 2010. Apart from electronic transactions, it also governs various other digital services in Singapore.

Such digital services include electronic contracts, electronic signatures, e-commerce, and maintenance of electronic records. The Electronic Transactions Act ensures that when a business is involved with any of the preceding activities, those activities are conducted in a way which is proper and legal.

If you’re a Singapore company with at least 30% of local shareholding, you’re automatically eligible to apply for the MRA grant by Enterprise Singapore. Successful applications will receive up to 70% subsidy on eligible costs, capped at S$100,000.
You can find out our MRA readings here:

1. Best Countries for Business Expansion from a Corporate Tax Perspective
2. SG-MY Twinning Strategy
3. Factors to Consider When Choosing Your MRA Consultant