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Comparison between Branch, Subsidiary and Representative Office

In this article, you are going to learn about the distinctive features of a Branch Office, Subsidiary Office, and Representative Office. The following table will provide you with a comparison of these three incorporation options for the foreign business entities who want to run their businesses in Singapore.All these business forms vary depending on the tax and compliance. From the table below, you can select the best entity that suits your business.

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TYPES OF BUSINESS ENTITY SUBSIDIARY COMPANY REPRESENTATIVE OFFICE BRANCH OFFICE
Name of the Entity It doesn’t  require the same name as of the parent company The name of the company must be the same as the parent company The name of the company must be the same as the parent company
Allowed Activities The company can conduct all the business activities It can only conduct market research or coordinating activities Its activities must be the same as the parent company
Suitable For It is suitable for local and foreign companies, who wants to expand their business in Singapore It is suitable for foreign companies that want to set up a temporary business entity in Singapore for research and it acts as a liaison office It is suitable for the foreign companies that want to expand their business in Singapore
Disadvantages It continues a compliance obligation. For examples, Financial Reports, Audit, AGMS, etc It is a temporary business entity and cannot provide business expansion or revenue It continues a compliance obligation. For examples, Financial Reports, Audit, etc
Ownership It can be owned 100% by foreign owners or by locals There is no ownership in a Representative Office It is owned 100% by the head office
Separate Legal Entity The Subsidiary Company has a separate legal entity A representative office doesn’t have a separate legal entity A branch office doesn’t have a separate legal entity
Cap on member numbers Maximum 50 members Not applicable to this entity Not applicable to this entity
Minimum set-up requirement The company must have minimum one shareholder, who can be an individual or a corporate and must have one resident director The company must appoint a Chief Representative who can relocate from the headquarters The office must have minimum one Singapore Resident Agent
Limited Liability Yes No No
Audited accounts The company needs an audited account The company doesn’t need an audited account The company needs an audited account
Filing of accounts The company needs to file accounts with ACRA and IRAS The company doesn’t need to file accounts The company needs to file accounts with ACRA and IRAS
Annual Filing The company must file an audit report of subsidiary Not applicable The company must file audit reports of branch office and parent company
Tax treatment The company is taxed as a Singapore resident entity. Local tax benefits are also available. Not applicable The company is taxed as a non-resident entity. Local tax benefits are not available.
Tax Benefits The company that has at least one shareholder with the minimum 10% shareholding is eligible for local tax incentives and rebates It doesn’t have a corporate tax. Employees have to pay for personal tax Partial tax exemption
Validity Period It is valid until deregistration It is a short-term setup and cannot last for more than three years. The company is valid until deregistration
Registration time 3 hours 3 to 5 days 3 hours
Business termination upon the death of a member or partner No equity share go on in perpetuity Not applicable Not applicable
Officer’s appointment The company must appoint at least one resident director The company must appoint a Chief Representative who will relocate from headquarters The company must appoint at least one resident agent
Governing Bodies for company ACRA and IRAS International Enterprise Singapore ACRA and IRAS

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