One of the strategies firms use to expand their business at the international arena is by setting up a branch office at different places. Branches are the part of organizations, which are incorporated to perform the same business operations performed by the parent company to increase the reach. A Branch Office is the most cost-effective way to set up your business in Singapore as it allows you to save a lot of money by avoiding the corporate tax. The Branch, however, has a significant drawback; it doesn’t protect the parent company’s assets because of the mutual legal entity they both share. The parent firm is liable before the Singapore law for every its Branch’s failure. Being only the foreign firm’s extension, this form of business setup fits only those undertakings that aren’t associated with risks.
Features of Setting Up a Branch Office in Singapore
- A branch office in Singapore requires appointing two Singaporean agents
- Since the parent company and the branch office are the same legal entity, the foreign company is fully liable for the business failures caused by debts or legal issues in Singapore. That means, if the Singapore branch office is sued, the parent company is also sued automatically
- The branch office in Singapore isn’t allowed to buy property or make contracts independently
- The activities and functions of the branch office must be as per the original Memorandum and Articles of Association (M&A) of the parent company
Prerequisites for Setting Up a Branch Office in Singapore
- 1 Corporate Shareholder
- 1 Singapore Resident Agent
- A Registered Office Address in Singapore
How to Set Up a Branch Office in Singapore?
A branch office is subject to the same compliance requirements as all other companies, which means the complete information about the company is available to the public. The branch office will become a proper legal entity once it has been registered with the company registrar in Singapore. The registration procedure contains 2 basic steps:
- Name approval
- Entity registration
The steps for registering a branch in Singapore are as follows:
- The first step as mentioned above is the name registration. The name for the Singapore branch must be the same as that of the parent company
- Fill an application form mentioning all the necessary details
- Attach the mentioned documents with the application form and submit it to the Accounting and Corporate Regulatory Authority (ACRA) who look after the company registration process
- The application and the documents will be examined by the authorities and will take 1-2 business days
- The company registrar will send an email notification confirming the registration of the Singapore branch. The registrar no longer issues any hardcopy certificate, unless specially requested by the company through a separate application post registration of the entity. Email notification is sufficient in Singapore for all business matters such as bank account opening, signing an office lease agreement, etc.
- An incorporation certificate is issued at the request of the company
Assuming necessary document are ready and there are no delays in the name approval process, registration of a Singapore branch can be completed in 1-2 days, subject to approved client due diligence.
Documents Required to Set Up a Branch Office in Singapore
- Notarized copies of the Certificate of Incorporation of the foreign company
- Notarized copies after the Articles of Association of the parent company
- Details about the parent company’s directors
- A resolution appointing the two agents acting on behalf of the branch office in Singapore
- Documents proving the registered address of the branch office
- A statement issued by the foreign company regarding the powers of the two local agents
The branch office is an ideal way of registering a business in Singapore for foreign companies who seek to have an established presence in the country without registering a new company. Most foreigners find it challenging to meet the criteria for setting up a business in Singapore without specific knowledge. As a result, your Branch setup procedure won’t be so smooth and fast. We at Business Setup Worldwide can help you with it. Entrusting us with your Branch Office registration in Singapore, you can save your time and nerves which you can invest in putting your business idea into action while we mind its outer paperwork form and ensure the unhampered registration for your Singapore branch. Contact us today.