How can a Foreign Business Set Up Operations in Singapore?

If a foreign entity, rather than an individual, intends to establish a presence in Singapore, it can explore four entry avenues.

Each entry option comes with distinct advantages and limitations. Here’s a brief overview:

1. Representative Office (RO)

Ideal for short-term market exploration.

It enables a foreign entity to evaluate the business landscape in Singapore before committing to a long-term presence.

A representative office is a provisional arrangement and lacks legal status, prohibiting it from participating in profit-generating commercial or business activities.

Note: An approved RO can conduct operations in Singapore for a duration of only one year starting from its initiation date.

How to Register a RO in Singapore?

Prerequisites:

• The foreign entity’s sales turnover must exceed US$250,000.
• The foreign entity must have been established for at least 3 years.
• The intended number of staff for the RO should not exceed 5 people.

To register a RO, submit an application to Enterprise Singapore with the following documents:

• Soft copy attachment (in English or an official English translation) of the foreign entity’s Certificate of Incorporation or Registration Certificate (as applicable).
• Soft copy attachments of the foreign entity’s latest Audited Accounts.

2. Subsidiary

Provides strong limited liability protection and access to tax incentives, suitable for long-term ventures.

A subsidiary is a Singapore-registered private limited company, with its shareholders primarily composed of either local or foreign corporate entities. The foreign company can be the sole shareholder of the subsidiary’s shares.

Note: The registration procedure for incorporating a subsidiary is similar to that of a local company.

How to Register a Subsidiary in Singapore?

Step 1: Company Name Reservation

• Choose a unique and suitable name for your subsidiary. Ensure it complies with ACRA’s guidelines on company names.
• Reserve the chosen name through the BizFile+ online portal. The name reservation is usually approved within an hour, but it’s valid for 60 days.

Step 2: Appoint Company Officers

• A subsidiary company must have at least one director who is an ordinarily resident in Singapore. This can be a Singaporean citizen, Permanent Resident, or an Employment Pass holder.
• Appoint a qualified company secretary. The secretary must be a natural person and also an ordinarily resident in Singapore.
• Shareholders can be individuals or corporate entities, and there can be both local and foreign shareholders.

Step 3: Prepare the Company Constitution

• Draft the company’s constitution, which outlines the rules governing the company’s internal affairs. You can use the standard constitution provided by ACRA or create a custom one, as long as it complies with the law.

Step 4: Registered Office Address

• Provide a registered office address in Singapore for official correspondence and records. This address must be a physical location and cannot be a PO Box.

Step 5: Paid-Up Capital

• Determine the initial paid-up capital for the subsidiary. Singapore does not impose a minimum paid-up capital requirement, so you can decide the amount as per your needs.

Step 6: File Incorporation Documents

• Prepare the necessary incorporation documents, including the Memorandum and Articles of Association (MAA), and submit them to ACRA through the online portal.
• Pay the required registration fee and filing fee to ACRA.

Step 7: ACRA Approval

• ACRA will review your submission. If all documents are in order, you will receive the Certificate of Incorporation, which confirms the establishment of your subsidiary company. This usually takes about 15 minutes upon approval.

Step 8: Business Licenses and Permits

• Depending on your business activities, you may require specific licenses or permits from government agencies. Check the respective authority’s website for any additional licenses that may be needed.

Step 9: Commence Business Operations

• With the Certificate of Incorporation in hand, your subsidiary company is now officially registered and can commence business operations in Singapore.

3. Branch Office

Offers flexibility for conducting business activities but has limited liability protection.

In contrast to a subsidiary, a branch office is viewed as a continuation of the parent company rather than a distinct legal entity. As a result, the parent company bears legal responsibility for the actions or oversights of the branch office.

How to Register a Branch Office in Singapore?

Prerequisites:

• Local Representative: The branch office requires the presence of a locally resident authorised representative, who should be at least 18 years old. The local representative can be a Singapore citizen, a permanent resident of Singapore, or an Employment Pass holder.
• Registered Address in Singapore: A branch office must possess a registered address located in Singapore. It’s important to note that this address cannot be a PO box.

You’ll need to provide the following documents:

1. Parent Company Information:
   • Name of the parent company
   • Address of the parent company located outside of Singapore
2. Corporate Documents of the Parent Company:
   • Certified copy of the parent company’s certificate of incorporation
   • Certified copy of the parent company’s constitution
   • Register of the directors of the parent company
3. Details of Local Representative:
   • Particulars of the authorised local representative
4. Statement of Consent:
   • A statement of consent from the local Singapore resident who will act as the local representative for the branch office
5. Company Information:
   • A notice containing:
     • The foreign company’s registration number
     • The type of business conducted by the foreign company
     • The legal structure of the foreign company
6. Financial Records:
   • Copy of the parent company’s audited financial statements

4. Transfer of Registration (Re-domiciliation)

Allows a company to transfer its registration to Singapore, becoming a Singapore-registered entity.

Re-domiciliation offers foreign corporate entities the opportunity to become a Singaporean company with minimal interference in their ongoing business operations and established branding.

How to Apply to Transfer Your Registration to Singapore?

• Search on BizFile+ to verify the availability of your desired company name before proceeding with your application. To secure the chosen name for your Transfer of Registration application, it’s advisable to reserve it in advance.
• Complete the “Application for Transfer of Registration” form and attach the completed application form i.e. in PDF format and make payment via BizFile+.

Summary

Singapore’s business-friendly environment and strategic advantages make it an attractive destination for foreign companies. By understanding the various entry options and their implications, foreign companies can make informed decisions to establish a successful presence in Singapore’s vibrant market.