Comparison Branch Office vs Subsidiary Company vs Representative Office
There are three options for foreign companies who are interested in establishing a business presence in Singapore:
- Representative Office
- Branch Office
- Subsidiary Company
Below is a summary of each option, and depending on the business needs of a foreign company, each has its advantages and disadvantages.
| Types | Subsidiary Company Private Limited | Representative Office | Branch Office |
|---|---|---|---|
| Entity Name | Need not be the same as parent company | Must be the same as parent company | Must be the same as parent company |
| Allowed Activities | Can conduct all business activities | Can only conduct market research or coordinating activities | Must be the same business activities as the parent company |
| Suitable For | For local or Foreign Companies who wish to expand their operations in Singapore | For Foreign Companies who wish to set up temporary vehicle in Singapore to conduct research and act as liaison office | For Foreign Companies who wish to expand their operations in Singapore |
| Disadvantages | Continuing Compliance Obligations eg Financial Reports, Audit, AGMS, etc | It is a temporary vehicle and cannot generate revenue | Continuing Compliance Obligations eg Financial Reports, Audit etc |
| Ownership | Can be 100% foreign or locally owned | No Ownership | No Ownership |
| Separate Legal Entity | Yes | No | No |
| Cap on Number of Members | Yes, max 50 | Not Applicable | Not Applicable |
| Minimum Setting up Requirement | One shareholder , which can be foreign or local individual or corporate shareholder AND 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 the Singapore 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 non-resident entity, local tax benefits not available |
| 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 tempoarary 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 |
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