As a foreign entity, should we incorporate a subsidiary or register a branch office in Singapore?

Majority of our overseas SME (small and medium enterprise) clientele prefers to incorporate a Singapore Subsidiary rather than set up a Foreign Branch. A subsidiary has several advantages over a branch office, including:

  • The liabilities of a Singapore subsidiary company are not extended to its parent company;
  • A Singapore subsidiary company is not restricted to the business activities of its parent company;
  • A subsidiary is considered a local entity and is therefore eligible for tax breaks and incentives that are available to local companies;
  • A subsidiary is not obligated to file financial accounts of its parent company.

Furthermore, a Singapore Subsidiary will be considered a tax resident in Singapore whereas a Foreign Branch, on the other hand, is not a tax resident. The management and control of a Foreign Branch is wholly under the purview of the parent company overseas.