Outline
- What Is a Branch Office in Singapore?
- Why Set Up a Branch Office in Singapore?
- How to Register a Branch Office in Singapore
- Why SMEs Often Prefer Subsidiaries Over Branches
- Compliance for Branch Offices in Singapore
- Taxation of Branch Offices in Singapore
- Annual General Meetings (AGMs) for Branch Offices
- Frequently Asked Questions
Choosing the right legal structure is essential for foreign companies expanding into Singapore. Deciding between a branch office and a subsidiary company impacts your customer reach, operational flexibility, tax exposure, and compliance obligations.
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, not 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 branch bind the parent company directly, even if executed without explicit approval from head office management. Hence, parent companies often limit local banking access and restrict branch autonomy to reduce legal risk.
Unlike a subsidiary, the parent company of a branch office bears full liability for its Singapore operations. Despite this, branches remain a popular vehicle for expanding reach and improving access to customers across Southeast Asia.
Why Set Up a Branch Office in Singapore?
Branch offices allow foreign companies to expand their business in Singapore while leveraging their existing global structure. They help replicate the operations of the head office and contribute directly to its revenue.
Although the legal risks are higher, foreign companies may opt for a branch office due to:
To manage risk, companies may choose not to open a local bank account or require that only directors from the head office sign important documents.
How to Register a Branch Office in Singapore
Step 1: Fulfill the Prerequisites
Before initiating the process, ensure your foreign entity meets the following ACRA requirements:
Step 2: Prepare Required Documents
You must provide:
If the parent company is new and lacks audited accounts, brochures or self-declarations may be accepted.
Step 3: Register the Branch with ACRA
Registration is completed online via BizFile+. While the ACRA registration itself typically takes under a day, the entire incorporation process may take up to a week, depending on client due diligence, document signing, and name reservation.
Step 4: Legal Status Confirmation
Once registration is complete, the Singapore branch office will attain legal recognition as a registered entity. However, control and liability remain with the parent company.
Why SMEs Often Prefer Subsidiaries Over Branches
Most foreign small and medium-sized enterprises (SMEs) choose to incorporate a subsidiary instead of a branch in Singapore. This is because:
Therefore, the head office needs to decide what the best worldwide tax exposure approach on branch incorporation decision.
Compliance for Branch Offices in Singapore
While branch offices face fewer compliance burdens than subsidiaries, they still have important obligations:
- Appoint a local tax agent to handle correspondence with IRAS
- Submit ECI (Estimated Chargeable Income) based on Singapore-sourced revenue
- File corporate tax returns annually
- Maintain audited financial statements, signed off by a certified accountant in Singapore
- Submit copies of the parent company’s financials within two months of the AGM
Failure to meet these requirements can result in penalties or enforcement actions by Singapore authorities.
Taxation of Branch Offices in Singapore
A Singapore branch office is taxed at the standard corporate tax rate of 17%. However, unlike subsidiaries, branches are not considered tax residents in Singapore and do not qualify for local tax exemptions or incentives.
This is because a branch’s control and management occur overseas, typically through board decisions in the parent company’s home jurisdiction.
Nonetheless, Singapore offers relatively low tax exposure compared to other countries. Branch profits are not taxed in Singapore if they don’t constitute a permanent establishment under local law.
Paul Hype Page & Co. can help optimise your tax strategy, ensuring compliance while keeping your Singapore tax liability minimal.
The parent company must send all the paperwork no later than two months after its annual general meeting (AGM).
The branch office must also submit an ECI form, which details the income generated in Singapore. Additionally, a chartered accountant must audit the accounts of the Singapore branch office. Singapore branch offices must file a tax return annually.
Annual General Meetings (AGMs) for Branch Offices
Singapore law requires branch offices to hold AGMs, where stakeholders review financial reports and assess company performance. 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 their AGM. This is common when awaiting head office reports or facing cross-border scheduling issues.
Applications for AGM extensions must be submitted before the filing deadline and require a S$200 fee. Note that not all branches are eligible—only those that do not need to present financial statements during the AGM.
Frequently Asked Questions
Yes, the accounts of the head office must be lodged with ACRA.
Yes, as long as the foreigner has an Employment Pass or a Dependent Pass.
Singaporean citizens, Singapore permanent residents (PRs), Employment Pass Holders, and Dependent Pass Holders are locally resident.
While the law does not compel a company to amend its memorandum and articles of association (M&AA) to cater to a one-director company, you may wish to examine your own M&AA to determine if it contains any provisions that will not be operable if there were just one director. Every company can draft its own set of M&AA and need not rely solely on the provisions in Table A of the Companies Act. For further information, refer to section 4 and 184 of the Companies Act.
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We want to setup a office branch in Singapore
Dear Shubham
A branch of the foreign company that operates in Singapore is legally part of the foreign company and is not its own entity. This is an important point since it means that the foreign company’s head office bears the ultimate responsibility for any liabilities arising due to the acts of commission or omission of the Singapore branch office.
R. Paul