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Branch office Vs Subsidiary company .pdf

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Branch office Vs Subsidiary
company in Singapore?

Page 1

Page 2

Branch Office and Subsidiary Company in
Singapore are two of the most well known and
preferred types of company incorporation in
Singapore from foreigner’s perspective. In this
post, we’re comparing both Singapore branch
office and Singapore subsidiary company to
help you comparing their pros and cons,
specialties and features in order to identify the
best Singapore company incorporation option
that works for you.

Page 3

1. Separate Legal Identity and
Asset Protection
A Singapore branch office is considered an
extension of the parent company and is not
a separate legal entity of its own. This
means that the liabilities of a Singapore
branch office are derived from the liabilities
and assets of the respective parent
company that may be located in a foreign
nation. It can, however, be sued in
Singapore in the case of any dispute. Hence
the assets of the parent company will be not
protected in this case.

Page 4

A subsidiary company in Singapore, on the
other hand, is a separate legal entity from
the foreign company even if the foreign
company holds 100% shares. This means
that the foreign company does not have to
bear the losses and liabilities of the
Singapore Subsidiary company. In this
case, the assets of both the subsidiary and
the parent company can be protected even
if either company are sued.

Page 5

2. Activities conducted
Singapore branch office, as being an
extension of its parent foreign company is
only allowed to carry out activities defined in
its constitution and cannot perform other
activities in Singapore that are not aligned
with the activities of the respective foreign

Page 6

Singapore subsidiary company can, however,
be made to perform any activity, as long as
these are defined clearly at the time of
incorporation of the respective Singapore
subsidiary company. Being a separate legal
entity from its parent foreign company,
aligning with the activity of foreign company
is not necessary.

Page 7

3. Filing Returns
Singapore subsidiary companies need
to Prepare a set of financial statements and
to submit their financial statements in
extensible Business Reporting Language
when filing annual returns with the
Accounting and Corporate Regulatory
Authority in Singapore.
However, branch offices are required to
submit the audited accounts of the parent
company as well as the audited financial
statements of its branch office.
Page 8

4. Tax exemptions
Incorporation of branch office in Singapore is
not considered a resident for the purposes of
tax. Thus, making it ineligible for tax incentives
that are available for private limited companies
in Singapore.
Registration of a Singapore Subsidiary
company, on the other hand, is very tax
efficient when it comes to them working as an
subsidiary company enjoys various benefits,
exemptions and advantages that are made
available for Singapore resident companies.
Page 9

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