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Steps to incorporate a Branch Office

When a foreign company sets up a branch in Singapore, the branch that operates in Singapore is legally part of the foreign company. The branch is not its own entity. This is important because it means 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.

Normally, the Singapore branch office is a non-tax resident in Singapore, and therefore, there is no tax exemption or advantage compared to Singapore company. However, the Singapore branch of a foreign company is considered resident in Singapore if the control and management of its business are exercised in Singapore. Such companies will not need to pay taxes twice on foreign-sourced income under the Double Taxation Agreements (DTAs). Before establishing a place of business or commencing business in Singapore, a foreign company must register itself as a branch with the ACRA.

To incorporate a Foreign Branch, these are the general requirements and procedures needed:

Step 1 : Understand the Statutory Requirement

Requirements:
A Branch Office must appoint at least two agents who are Singapore residents. The following individuals can be appointed as local agents:

  • a Singapore citizen;
  • a Singapore permanent resident;
  • a Branch Office employee holding an Employment Pass

Step 2 : Documents needed for Incorporation

A branch must have at least 2 authorized agents who ordinarily are resident in Singapore. A list of the directors of the head office must be notified to the ACRA. A branch must have a registered office in Singapore.

Advantage of a Branch: It is administratively easier to maintain than a company. Also, closing a branch is easier than liquidating a company.

The disadvantage of a branch: The liabilities of a branch extend to its head office. A branch having a registered office in Singapore means that its head office (foreign corporation) can be served with the legal process in Singapore. Another disadvantage is that the accounts of the head office must be lodged with the ACRA and they are available for public inspection.

Documents Required For Branch Office

For each Singapore resident individual shareholder and director:

  • Copy of Singapore IC; and
  • Copy of passport if the individual is not a citizen of Singapore

For each non-resident individual shareholder and director:

  • Copy of passport; and
  • Copy of residential address proof such as a recent utility bill, residential phone bill, tax bill, or cable TV bill

For each corporate shareholder:

  • Foreign Corporate Company Certificate and
  • Special Director Resolution to resolve becoming newly incorporated company subsidiary’s shareholder
Incorporation of Branch in Singapore

Documents Required For Parent Company

  • A certified copy of the Certificate of Incorporation or registration in its place of incorporation or origin or a document of a similar effect. It must be certified by the Registrar of Companies.
  • A certified copy of its Charter, Statute or Memorandum and Articles or other instrument constitution or defining its constitution, must be certified by the Registrar of Companies.
  • A certified true copy of the current extract of the parent company’s particulars, including the list of its directors and their personal particulars, i.e. passport no., residential address, nationality, date of birth, date of appointment as director of the foreign company (please provide clear copies of certified true copy of the directors passport).
    Where the list includes directors resident in Singapore who are members of the local board of directors, a memorandum duly executed by or on behalf of the foreign company stating the powers of the local directors, is required.
  • A Memorandum of Appointment or Power of Attorney under the seal of the foreign company or executed on its behalf in such manner as to be binding on the company, stating the names and addresses of 2 local agents authorized to accept on its behalf service of process and any notices required to be served on the company. The Memorandum of Appointment or Power of Attorney must be verified and accompanied by a duly signed Statutory Declaration (for Commonwealth countries) or Affidavit (for non-Commonwealth countries).

Please note the following:

  • All documents must be in English or officially translated in English;
  • All copies of documents must be certified true copies by a notary public or you must bring the originals to our office for sighting;
  • If you are overseas, you can email us the scanned copies of documents so we can proceed with preparing the necessary incorporation documents.
  • However we must receive the certified true copies (or sight the originals at our office) before we can incorporate the branch.
  • Our compliance department may ask for additional information if necessary.

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Step 3 : Our Scope of Service for Incorporation

Engage us to be the local authorized agent and sign off the Agreement

We will appoint a member of our team as the nominee local agent for your Singapore branch. The service is offered for statutory compliance only. The nominee agent will not be involved in any management, financial, or operational matters of the company. You must appoint one or more individuals (normally the company shareholders) as the company directors who will be responsible for running the company. You can ask our nominee agent to resign at any time by identifying another person who can satisfy the local director’s requirement.

Note: For the provision of our nominee local agent service, we also collect a refundable security deposit. The security deposit will be refunded when you no longer need our nominee agent service.

Our Scope of Services includes:

  • Name check and reservation
  • Preparation of memorandum & articles of the
  • Company and other incorporation documents
  • Preparation of registration forms
  • Professional & Filing Fees
  • E-Certificate of incorporation
  • Preparation of compliance corporate kit, including corporate seal, share certificates, register and minutes book
  • Minutes of first board meeting
  • Resolution to open a bank account

Click here for a sample copy of nominee director agreement for your reference

Direct from Nominee Director to client

Step 4 : Open a Corporate Bank Account

Once your company is incorporated, you must open a corporate bank account with any of the local and international banks in Singapore. Opening a corporate bank account in Singapore is a straightforward if you do it right. The important thing is that you must choose the bank which offers corporate accounts features that can fulfill the banking needs of your company.

If you are looking for a bank that allows you to operate overseas, open a corporate bank account with Aspire Bank will be a good option. Good news is, you can also skip the long list of required documents seen below if you opt for Aspire. With Aspire, you can have fast and user-friendly access to financial services for your business operations anywhere and at any time through your mobile phones. You can also enjoy cashback for your online marketing and “software as a service.”

It is free to open an Aspire Business Account. There are no monthly fees, fall below fees, or FAST transfer fees, and no minimum deposit is required as well. If you are keen, the account can be opened entirely online with Paul Hype Page. Check out more Aspire features on www.aspireapp.com.

Requirements for Opening a Corporate Bank Account

The followings are the required documents to open a corporate account in Singapore banks:

  • Completed Corporate Account Opening Forms
  • Board of Directors Resolution approving the opening of the account and the signatories to the account
  • Certified True Copy of Certificate of Incorporation (must be certified by the company secretary or one of the directors)
  • Certified True Copy of Company’s Business Profile from Company Registrar
  • Certified True Copy of Company’s Memorandum and Articles of Association (MAA)
  • Certified True Copies of Passport (or Singapore IC) and Residential Address Proof of Directors,
  • Signatories, and Ultimate Beneficiary Owners.
  • If you are in Singapore, just bring the originals and the bank will make a copy.

Singapore banks may ask you to produce additional documents depending on the case. Generally, most of the banks require that the account signatories and majority directors be physically present in Singapore for signatures at the time of opening the company bank account. However, some banks will accept the signing of documents at one of their overseas branches or in front of a Notary Public.

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Start Your Business

After establishing the Singapore branch and if you don’t wish to relocate to Singapore immediately, we can assist you in the initial stage when you don’t have any staff in Singapore. Our firm’s company management service it is a one-stop solution called build-operate-transfer (BOT).

In this model, your firm contracts with us to build a shared service to operate your overseas business for a fixed interim period. The logic behind the BOT model: the offshore partner can initiate operations and reach operating stability much faster than it can with our in-house effort.

A typical BOT is built and managed in three phases:

  • Build
  • Operate
  • Option to Transfer

Incorporate a Singapore Branch Overview

Incorporate a Branch Overview:

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. Normally, Singapore branch office is non tax resident in Singapore and therefore, there is no tax exemption or advantage compared to Singapore company. However, Singapore branch of a foreign company is considered resident in Singapore if the control and management of its business are exercised in Singapore. Such companies will not need to pay taxes twice on foreign-sourced income under the Double Taxation Agreements (DTAs).

Before establishing a place of business or commencing business in Singapore, a foreign company must register itself as a branch with the ACRA.

A foreign company is defined in the Companies Act as:

  • A company, corporation, society, association or other body incorporated outside Singapore, or
  • An incorporated society, association or other body which, under the law of its place of origin, may sue or be sued, or hold property in the name of the secretary or other officer of the body or association duly appointed for that purpose, and which does not have its head office or principal place of business in Singapore.

A branch must have at least 2 authorised agents who ordinarily are resident in Singapore. A list of the directors of the head office has to be notified to the ACRA. A branch must have a registered office in Singapore.

Advantage of a Branch: It is administratively easier to maintain than a company. Also, closing a branch is easier than liquidating a company.

The disadvantage of a Branch: The liabilities of a branch extend to its head office. A branch having a registered office in Singapore means that its head office (foreign corporation) can be served with the legal process in Singapore. Another disadvantage is that the accounts of the head office must be lodged with the ACRA and they are available for public inspection.

 

Comparison Chart for Subsidiary Company Vs. Branch Office Vs. Representative Office

Types 

Subsidiary Company 

Representative Office 

Branch Office 

Entity Name 

Need not be the same as the parent company 

Must be the same as the parent company 

Must be the same as the parent company 

Allowed Activities 

Can conduct all business activities 

Can only conduct market research or coordinating activities 

Must be the same as the parent company 

Suitable For 

For local or Foreign Companies that wish to expand their operations in Singapore 

For Foreign Companies that wish to set up temporary vehicle in Singapore to conduct research and act as the liaison office 

For Foreign Companies they wish to expand their operations in Singapore 

Disadvantages 

Continuing Compliance Obligations e.g., Financial Reports, Audit, AGMS, etc 

It is a temporary vehicle and cannot generate revenue 

Continuing Compliance Obligations e.g., Financial Reports, Audit, etc 

Ownership 

Can be 100% foreign or locally owned 

No Ownership 

Owned 100% by the head office 

Separate Legal Entity 

Yes 

No 

No 

Cap on Number of Members 

Yes, max 50 

Not Applicable 

Not Applicable 

Minimum Setting up Requirement 

Min One shareholder that can be an Individual or corporate (100% local or foreign shareholding allowed. Must have at least one resident director 

Must appoint a Chief Representative who will relocate from headquarters 

Must have two Singapore Resident Agents 

Limited Liability 

Yes 

No 

No 

Need for Audited Accounts 

Yes 

No 

Yes 

Filing of Accounts with ACRA and IRAS 

Yes 

No 

Yes 

Annual Filing 

Must file audit report of subsidiary 

Not Applicable 

Must file branch office’s as well as parent company’s audit reports 

Tax Treatment 

Taxed as Singapore resident entity, local tax benefits available 

Not Applicable 

Taxed as a non-resident entity, local tax benefits not available 

Tax Benefits 

A subsidiary company, with at least one individual shareholder with minimum of 10 percent shareholding, is entitled to local tax incentives and rebates 

No Corporate tax. Employees must pay personal tax 

Partial tax exemption 

Cessation of Business upon Death of a Member/Partner 

No. Equity shares go on in perpetuity 

Not Applicable 

No 

Validity Period 

Perpetually until deregistered 

This is a temporary Setup. It is intended not to last more than 3 years 

Perpetually until deregistered 

Normal Registration Time 

3 hours 

3-5 days 

3 hours 

Appointment of Officers 

Must appoint at least one local resident director 

Must appoint a Chief Representative who will relocate from headquarters 

Must appoint two resident agents 

Governing Body 

ACRA & IRAS 

International Enterprise Singapore 

ACRA & IRAS 

Foreign Entrepreneurs Relocate To Singapore

We have a tailored made package for foreign entrepreneurs who want to relocate to Singapore. The package of Branch Incorporation + Employment Pass include:

  • Branch Registration
  • Appointment of Company Secretary for one year
  • Nominee Director for 3 months
  • Application for Employment Pass (EP)
  • Registered Office Address for One year

You may also add on OPTIONAL SERVICES:

  • Dependent Pass Application (spouse)
  • Dependent Pass Application (child) under 18 years
  • Compilation of Company’s Financial Statement
  • Tax computation and Form C Submission

PROCEED NOW

To proceed with this package, please complete the details below. Our Incorporation consultants will promptly follow-up with you to register your company immediately.

Incorporation of Branch FAQs

Can a foreigner be appointed as the local manager?2020-11-16T11:30:02+08:00

Yes, provided he has an Employment Pass or a Dependent Pass. 

What status is considered locally resident? Is Employment Pass holder considered as a local resident? What about Dependent Pass holders and Permanent Residents?2020-11-16T11:30:36+08:00

Singaporean citizens, Singapore permanent residents (PRs), Employment Pass Holders, and Dependent Pass Holders are the local resident.

If my company has one director and one shareholder, is it compulsory to amend my company’s M&AA?2020-11-16T11:30:53+08:00

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. 

Must the accounts of the head office lodge with ACRA?2020-11-19T14:25:28+08:00

Yes, the accounts of the head office must be lodged with ACRA. 

2021-01-27T16:52:12+08:00December 19, 2014|Comments Off on Incorporation of Branch
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