In recent years Singapore has developed as a strong point of attraction for many foreign businesses. A lot of companies have decided to expand their operations in the country or even transfer their whole activity to Singapore. Here we shall explore 4 ways to operate a foreign business in Singapore.
Registering a Representative Office
The first and easiest option is to register a representative office of your company in Singapore. This office is considered to be a temporary establishment of the company in Singapore and does not have the status of an independent entity.
Singapore allows the Representative Office in the country to conduct market research as well as feasibility studies and to participate in different types of exhibitions. It can’t however, sell goods or services, sign a partnership agreement, rent property, employ personnel, etc.
Representative offices are registered with Enterprise Singapore. There are three qualifying conditions that make foreign companies eligible for registering representative offices:
- Annual turnover of at least $S250 000;
- The company must be established for at least 3 years;
- The proposed staff of the office not exceeding 5 persons.
The state fee for the application is S$200 and the application is normally processed in 5 business days.
Registering a Branch of a Foreign Company
If you want to operate a business in Singapore with your company established elsewhere you may want to register a branch of the company. Something important to consider in this option is that the branch of a foreign company must have at least one authorized representative who is ordinarily resident in Singapore (citizen, resident or an EntrePeass holder).
As the representative office, the branch is not considered a separate legal entity but rather an extension of the parent company. It must, however, have a registered office in Singapore with at least 5 working hours per day.
The total registration fees for setting up a branch amount to S$315. Processing the application takes no time at all unless it needs to be sent for a further review to another agency. In these rare cases registering the company may take from 14 days up to 2 months.
Subsidiary Company in Singapore
A subsidiary company is a locally incorporated legal entity that is owned 100% by a foreign company. It is a private limited company (a lot like a regular Limited Liability Company). Subsidiaries must have at least one locally resident director in Singapore (citizen, resident or an EntrePeass holder). They are treated as local tax-residents and hence are entitled to the same tax exemptions and incentives as local companies. Subsidiaries may also engage in activities that are of a different scope than that of their parent companies. The total fees are S$315 and there are two government fees:
- S$15 Name approval fee
- S$300 Company Registration fee
The limited liability of the subsidiary makes it the best option so far for operating a long-term business in Singapore as a foreign company.
You can learn more about the company registration procedure in Singapore here.
Transfer of Registration (Re-domiciliation)
Through the process of re-domiciliation, a foreign company transfers its registration from its original place of incorporation to Singapore. This means a complete transfer of the business. The legal entity of your company will cease to exist in the original country and will become a Singapore company.
Redomiciliation is only available for fairly big companies that cover any 2 of the following criteria:
- the value of the foreign corporate entity’s total assets exceeds S$10 million;
- the annual revenue of the foreign corporate entity exceeds S$10 million;
- the foreign corporate entity has more than 50 employees
The company must also be solvent meaning that its assets exceed its liabilities and that the entity is able to pay its debts.
It is also necessary that the jurisdiction of the original place of incorporation of the company allows a transfer of the registration.
In order to initiate a transfer of registration, you must file an application with the Accounting and Corporate Regulatory Authority (ACRA). The application fee is S$1000.