Singapore Business Types for Foreigners

[David White]

As an entrepreneur, you might have already heard about how Singapore is great for doing business. You might be considering opening up a business in Singapore due to the fact that Singapore is one of the countries that have well-enforced laws that makes it clean and easy for business conduct. Moreover, the tax regulation is very business friendly, making it more pleasant for entrepreneurs to bet on their lucks in starting a company in this strategic Southeast Asian country.

As a foreigner, you are obliged to use the service of a professional firm that specializes in helping businessmen to open up a business in Singapore, navigating them through all the company registration procedure.

With the help of this firm, you don't have to worry about the registration process. As a businessman, what you need to know first is what type of business you want to start in Singapore before you go through the rest of the steps of starting a company in the country.

In Singapore, there are three categories or types of companies.

1. Subsidiary Company

A subsidiary company in Singapore is a private limited company that is incorporated locally within the country. Both locals and foreigners can be the shareholder of this type of business. Not only that, foreigners can even have full ownership of a Singapore subsidiary company.

A subsidiary company in Singapore is viewed as a separate entity from the parent company in its original country. Thus, the subsidiary company in Singapore is subject to the Singaporean law like any other local Singapore company. Since it is regarded as a separate entity, the parent company is not held accountable for the liabilities and debts of the subsidiary company in Singapore. A subsidiary type of company is recommended for small to medium sized business.

2. Branch Office

A branch office that is established in Singapore acts as the extension of its parent company in a foreign country. A branch office in Singapore is allowed to run the same business as the parent company. It can even repatriate the profits and capitals gained in Singapore. The branch office only needs to pay taxes for the earnings that they acquire from their business operation within the country.

For a branch office, the liabilities and debts of the branch office will be bestowed upon its parent company. This type of business is recommended for medium to large sized business with enough experience and resources that want to expand their business in another country.

3. Representative Office

A representative office in Singapore means a company that is established for a limited period of time. Usually, a representative office is established to observe the potential market or manage company affairs in Singapore. It is important to know that a Singapore representative office is prohibited to do any activities in means of gaining profits in Singapore. It also can not sign contracts, trade, raise invoices, lease warehouse, or open letters of credit by all means. Basically, a representative office is only to study the potential and prepare for the actual business establishment only.

To know the process of company registration in Singapore, visit the website