The Nature of the Branch Office:
The Branch Office has a legal standing but treated as an extension of the foreign parent company registered outside of Singapore. Hence obviously the parent company’s office is responsible for the liabilities that arise out of the acts of omissions and commissions of the Singapore Branch office. The Branch Office is considered as a non-resident entity from the taxation angle hence it is not eligible for those tax exemptions and incentives that are available to the local companies in Singapore thereby making it a less preferred option for small to mid-size businesses.
Branch Office formation requirements as per the Accounting and Corporate Regulatory Authority (ACRA) OF Singapore:
a) Should have 1 Corporate Shareholder plus 2 Singapore Resident Agents.
b) A Registered Office Address in Singapore. (Not a Post-box no. office address. ACRA does not allow the foreign companies to self register a branch office)
c) The Branch Office name should be the same as the parent company. ACRA should also approve the name before the Singapore Branch Office approves it.
d) ACRA may reject a proposal if the name is identical to another existing registered business name or if there is any infringement with any trade mark or any vulgarity or obscenity with that name.
e) Shareholders: The parent company must own 100% of the Branch Office.
The registration process with ACRA is a two-step process: 1) Name approval and 2) Branch Office registration. It is important to note that Singapore Companies Act doesn’t allow any foreign company to register their branch office in Singapore; it requires a corporate advisory firm to carry out all the procedures on its behalf. It is not necessary form the parent company to be present in Singapore for the registration of the branch office. The approval process takes approximately between 1-2 days provided all documents are in place. The other statutory requirements are: a) the certification of incorporation of the foreign company needs to be submitted. b) A certified copy of the Stature, Memorandum and Articles of the company are also needed. c) The personal information like residential address, passport number, nationality, identification number of the Directors. d) The names and addresses of the two or more authorized agents who need to be Singapore residents. e) The statutory declarations if any by the registered agents.
Once approved, ACRA sends a confirmation of registration via email. The registration is valid for one year and subject to an annual renewal. Once the branch office has been incorporated a corporate bank account can be opened with any of the local or international banks based in Singapore and in some cases overseas.
Thus above is the process through which a Singapore Branch Office can be incorporated very conveniently. It is advisable to hire the services of a corporate advisory firm to have a hassle free and fast registration of Branch Office in Singapore.