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Registering a Subsidiary Company or Branch

Updated: Apr 1, 2022

Foreign companies can set up operations in Singapore in two different ways:

  • Incorporating a Subsidiary Company

  • Registering a branch of a Foreign Company

Incorporating a Subsidiary Company

A foreign company can choose to be incorporated as a subsidiary (i.e. local company). The shares of the subsidiary can be held by the foreign company as the sole shareholder. As a local company, the subsidiary will have to comply with the statutory and disclosure requirements of the Companies Act.

Registering as a branch of a Foreign Company

A foreign company may do business by choosing to set up a branch in Singapore. Unlike a subsidiary, the branch of a foreign company must have a locally resident authorised representative. The foreign branch must also comply with the statutory and disclosure requirements of the Companies Act.

A branch is not a separate legal entity but is an extension of its head office, and as such may be utilized to leverage the brand name and finances of the head office to, amongst others, secure licences.

From a tax perspective, the residence of a branch generally follows that of its head office, i.e. a branch is prima facie not regarded as resident in Singapore.

For Singapore tax purposes, assessable income of a branch is generally taxed at the same rate as that of an incorporated subsidiary.

However, as most Singapore branches are regarded as non-resident of Singapore for tax purposes, the Singapore branch will not be able to avail itself of any tax benefits accorded under the Singapore tax treaties, qualify for any unilateral tax relief provisions nor foreign income tax exemption.

Foreign corporations may operate through branches, although most foreign investors prefer to set up private limited companies, since the tax residence status is simpler and provides for the ability to qualify for incentives, depending on the industry, location and office type.

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