Expanding into Singapore is a move many businesses consider sooner or later. The country has built its reputation as a financial hub, a safe place for investment, and a gateway into Southeast Asia. But once you’ve decided that Singapore is right for your next step, you face a practical choice: should you set up a subsidiary or register a branch office?
Both options are available. Both allow you to trade, hire staff, and build a presence in the country. But they’re not the same. Understanding the differences will save you time, protect your parent company, and help you avoid compliance problems later.
Subsidiary vs Branch Office
A subsidiary is a locally incorporated company. In most cases, foreign firms set it up as a private limited company under Singapore law. Legally, the subsidiary is a separate person. It can own property, sign contracts, and pay its own taxes. If the subsidiary runs into debt, the liability does not automatically flow back to the parent company.
A branch office is different. It is seen as an extension of the parent company abroad. In legal terms, the parent company and the branch are the same entity. That means any obligations taken on in Singapore belong to the parent as well. There’s no shield.
The choice often comes down to risk appetite. If you want to protect the parent from local liabilities, a subsidiary is usually the safer bet. If you prefer to keep everything under one corporate umbrella and aren’t concerned about exposure, a branch can be simpler.
Legal and Regulatory Requirements
Both options require registration with the Accounting and Corporate Regulatory Authority (ACRA). This is the government agency that manages company records in Singapore.
To set up a subsidiary, you need:
- At least one local director who is a resident of Singapore (citizen, permanent resident, or work pass holder).
- A registered office address in Singapore.
- A company secretary, appointed within six months of incorporation.
To set up a branch office, you need:
- At least one authorised representative who lives in Singapore.
- A registered office address in Singapore.
- Administrative support to ensure filings and compliance with ACRA rules.
Both require a constitution or charter, details of directors or representatives, and supporting documents from the parent company. The process is handled online through ACRA’s BizFile portal.
Why Secretarial Services Matter
No company or branch in Singapore is free from compliance work. Once you’re registered, there are annual filings, statutory registers, board resolutions, and sometimes government queries. Missing these can mean fines or, in serious cases, being struck off the register.
Company secretarial services handle these responsibilities. They track deadlines, prepare filings, keep statutory records, and file annual returns with ACRA. For subsidiaries, a company secretary is a legal requirement. For branch offices, authorised representatives play a similar role, but most businesses still hire professional secretarial services to manage the work.
Think of them as the administrative backbone that keeps you compliant while you focus on running the actual business.
Tax and Accounting
Tax treatment is a major difference between the two structures.
A subsidiary is treated as a Singapore tax resident. It pays corporate tax on income at Singapore’s standard rate (capped at 17%). But it can also benefit from the country’s many tax incentives, including start-up exemptions and treaty benefits. This is one reason many foreign companies lean toward setting up a subsidiary.
A branch office is not a tax resident. It pays tax only on income earned in Singapore, but it cannot access most local exemptions. For some businesses this is fine, especially if profits are modest or operations are limited. For others, missing out on those tax breaks is a big disadvantage.
Accounting rules also differ. A subsidiary files its own accounts in Singapore. A branch office files accounts for the parent company as well as the branch. This adds to the administrative burden.
Banking, Employment, and Day-to-Day Operations
Opening a corporate bank account is often easier for a subsidiary. Since it’s seen as a local company, banks are more comfortable dealing with it. A branch may face additional checks because it is not legally separate from its foreign parent.
When it comes to hiring, both structures can apply for local and foreign staff. However, a subsidiary has an advantage in applying for work passes for foreign employees. Because it is considered a local entity, approvals may be smoother.
Clients and partners sometimes see a subsidiary as more credible. Having “Private Limited” in the name signals permanence and independence. A branch can still function well, but in sectors where trust matters—finance, professional services, technology—a subsidiary may help you win local business faster.
Common Mistakes to Avoid
Foreign companies often stumble in a few predictable ways when entering Singapore:
- Choosing a branch for cost reasons without weighing liability. It might be cheaper at the start, but if something goes wrong, the parent is fully exposed.
- Delaying the appointment of a company secretary. This is a legal requirement for subsidiaries and must be done within six months.
- Using a residential address that doesn’t meet ACRA’s rules. The registered office must be open during standard hours and properly recorded.
- Neglecting annual filings. Even dormant entities must file certain documents. Ignoring this leads to penalties.
These are small issues, but they create big headaches. Having proper secretarial services in place is usually the best safeguard.
Practical Steps to Get Started
If you’ve decided which structure fits, the first steps are straightforward. Gather documents from the parent company, secure a local director or representative, and line up secretarial support. Then prepare your application through ACRA’s BizFile system.
The approval process is quick if everything is in order—sometimes only a few days. The bigger challenge is keeping the entity compliant year after year. That’s where reliable local support matters.
Final Thoughts
Singapore makes it easy for foreign businesses to set up. The rules are clear, the process is fast, and the government welcomes investment. But the choice between a subsidiary and a branch office is not just paperwork. It shapes how much liability the parent carries, how the business is taxed, and how it’s perceived in the local market.
A subsidiary usually offers more protection and credibility, along with tax benefits. A branch may be simpler but leaves the parent fully exposed. Neither is wrong—it depends on your goals, risk tolerance, and growth plans.
Whatever you choose, don’t overlook compliance. Company secretarial services are not an add-on. They’re the mechanism that keeps your entity legal, functional, and trusted in Singapore’s system. With that foundation in place, you can focus on what matters most: building your business.
