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Incorporation of Branch

When it comes to Singapore company incorporationPaul Hype Page & Co know the best business formation for all your business needs.

Foreign Branch Incorporation

Steps to incorporate a Branch Office

Incorporation Singapore Branch Requirements of Foreign Company 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). Prior to 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: 

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

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. In addition, closing a branch is easier than liquidating a company.

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 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

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.

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 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 

Once your company is incorporated, you have to think to open a corporate bank account with any of the local and international banks in Singapore. Opening a corporate bank account in Singapore is a simple and quick procedure. The important thing is that you have to choose the bank which offer corporate accounts features can fulfill the banking needs of your company.

Requirements for Opening a Corporate Bank Account

Basically, 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, the majority 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.

Last but not Least 

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

For more detail, please see Company’s Management Service

 

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).

Prior to 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. In addition, closing a branch is easier than liquidating a company.

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 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

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

Types

Subsidiary Company

Representative Office

Branch Office

Entity NameNeed not be the same as parent companyMust be the same as parent companyMust be the same as the parent company
Allowed ActivitiesCan conduct all business activitiesCan only conduct market research or coordinating activitiesMust be the same as the parent company
Suitable ForFor local or Foreign Companies that wish to expand their operations in SingaporeFor Foreign Companies that wish to set up temporary vehicle in Singapore to conduct research and act as liaison officeFor Foreign Companies they wish to expand their operations in Singapore
DisadvantagesContinuing Compliance Obligations eg Financial Reports, Audit, AGMS, etcIt is a temporary vehicle and cannot generate revenueContinuing Compliance Obligations eg Financial Reports, Audit etc
OwnershipCan be 100% foreign or locally ownedNo OwnershipOwned 100% by the head office
Separate Legal EntityYesNoNo
Cap on Number of MembersYes, max 50Not ApplicableNot Applicable
Minimum Setting up RequirementMin One shareholder that can be an Individual or corporate (100% local or foreign shareholding allowed. Must have at least one resident directorMust appoint a Chief Representative who will relocate from headquartersMust have two Singapore Resident Agents
Limited LiabilityYesNoNo
Need for Audited AccountsYesNoYes
Filing of Accounts with ACRA and IRASYesNoYes
Annual FilingMust file audit report of subsidiaryNot ApplicableMust file branch office’s as well as parent company’s audit reports
Tax TreatmentTaxed as Singapore resident entity, local tax benefits availableNot ApplicableTaxed as non-resident entity, local tax benefits not available
Tax BenefitsA subsidiary company, with at least one individual shareholder with minimum of 10 percent shareholding, is entitled to local tax incentives and rebatesNo Corporate tax. Employees have to pay personal taxPartial tax exemption
Cessation of Business upon Death of a Member/PartnerNo. Equity shares go on in perpetuityNot ApplicableNo
Validity PeriodPerpetually until deregisteredThis is a temporary Setup. It is intended not to last more than 3 yearsPerpetually until deregistered
Normal Registration Time3 hours3-5 days3 hours
Appointment of OfficersMust appoint at least one local resident directorMust appoint a Chief Representative who will relocate from headquartersMust appoint two resident agents
Governing BodyACRA & IRASInternational Enterprise SingaporeACRA & IRAS

 

FAQ about Setting Up Branch of Foreign Company In Singapore

Here are some common asked questions about Setting Up Branch of Foreign Company In Singapore

1. If my company has one director and one shareholder left, is it compulsory to amend my M&AA?

Answer: While the law does not mandate a company to amend its M&AA to cater to 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 the number of directors is reduced to 1. 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. In this regard, please refer to section 4 and 184 of the Companies Act.

2. What are the criteria for being appointed as a manager?

Answer: At least one manager must be ordinarily resident in Singapore. All managers appointed must be natural persons and above the age of 18. The manager of the LLP must not be:

  • An undischarged bankrupt (unless he has obtained Leave of the High Court or the written permission of the Official Assignee);
  • Disqualified as an unfit manager of insolvent LLPs under section 34 of the LLP Act;
  • Disqualified as a manager of a former LLP wound up on grounds of national security or interest and disqualified to act as a manager;
  • Disqualified as a person who was convicted of offences involving fraud or dishonesty, or other offences connected with formation or management of a LLP;
  • Disqualified under Sections 149, 149A or 154 of the Companies Act.

3. What status is considered locally resident? Is Employment Pass Holder or Work Permit Holder sufficient? What about dependent pass and permanent resident?

Answer: We recognize the followings as “locally resident” – Singapore citizens, Singapore PRs, Employment Pass Holders & Dependent Pass Holders.

4. Can a foreigner be appointed as the local manager?

Answer: Yes, provided he has an Employment Pass or a Dependent’s Pass.

5. Are the duties of a nominee manager the same as a manager?

Answer: There is no such position as a “nominee manager” in an LLP. Anyone who is named as the manager will have to perform the duties and carry out the obligations of a manager as set out in the LLP Act.

 

Foreign Entrepreneurs Relocate To Singapore

Branch Incorporation + Employment Pass

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

SUBTOTAL:

CHOOSE 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

TOTAL FOR THIS ORDER:

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.