Choosing Between a Branch or Subsidiary in Singapore

Choosing the right legal structure is essential for foreign companies expanding into Singapore. Deciding between a branch office and a subsidiary company directly affects customer reach, operational flexibility, tax exposure, and compliance obligations in Singapore.

To make an informed decision, foreign companies must evaluate:

What Is a Branch Office in Singapore?

A branch office is an extension of the foreign head office and is not considered a separate legal entity under Singapore law. It can conduct core business operations, including sales and contract execution, on behalf of the parent company.
All activities of the Singapore branch bind the parent company directly, even if executed without explicit approval from head office management. To mitigate risk, parent companies often limit local banking access and restrict branch autonomy.
Unlike a subsidiary company in Singapore, the parent company of a branch bears full liability for its local operations. Despite this, branch offices remain a popular vehicle for expanding customer reach and strengthening presence in Southeast Asia.

Why Set Up a Branch Office in Singapore?

A branch office allows foreign companies to expand operations into Singapore while leveraging their existing international structure. It replicates the head office’s business model and contributes directly to its revenue
Although legal risks are higher, foreign entities may opt for a Singapore branch office because of:

To manage legal and compliance risks, many companies avoid opening a local bank account or require head office directors to sign important documents.

How to Register a Branch Office in Singapore

Step 1: Fulfill the Prerequisites

Before registration, ensure your foreign entity meets the following ACRA requirements:

If the parent company is newly incorporated, brochures or self-declarations may be accepted.

Step 3: Register with ACRA

Registration is done online through BizFile+. ACRA registration itself may take less than a day, but the entire incorporation process can extend up to a week depending on due diligence, document signing, and name reservation.

Step 4: Legal Status Confirmation

Upon successful registration, the branch office attains recognition as a registered entity in Singapore. However, control and liability remain with the foreign parent company.
Foreign directors do not need to travel to Singapore to complete the process. Local corporate service providers can assist remotely through digital means.

Why SMEs Often Prefer Subsidiaries Over Branches

Foreign SMEs generally prefer subsidiaries over branch offices in Singapore because:

Therefore, foreign businesses must carefully evaluate tax exposure and long-term structure before deciding between a branch office and a subsidiary company.

Taxation of Branch Offices in Singapore

Singapore branch offices are taxed at the standard corporate tax rate of 17%. However, unlike subsidiaries, they are not considered tax residents in Singapore and therefore do not qualify for local tax exemptions or treaty benefits.
This is because management and control of the branch remain overseas in the parent company’s jurisdiction.
Still, Singapore offers a competitive tax environment. Branch profits may not be taxed locally if they do not constitute a permanent establishment under Singapore law.
Professional tax advisors in Singapore can help optimise compliance while reducing tax liability.

Annual General Meetings (AGMs) for Branch Offices

Singapore requires branch offices to hold AGMs where financial results and performance are reviewed. The meeting must be chaired by a designated officer or board member.
In some cases, foreign companies may request a two-month extension from ACRA to hold the AGM, particularly when waiting for head office reports or coordinating across borders. A filing fee of S$200 applies, and extensions must be requested before the deadline.
Not all branches qualify for extensions—eligibility depends on whether financial statements are required at the AGM.