Registering a New Foreign Company Branch

Registering a New Foreign Company Branch | Bestar

Registering a New Foreign Company Branch

Registering a foreign company branch in Singapore involves a multi-step process managed by the Accounting and Corporate Regulatory Authority (ACRA). It's crucial to understand that a branch office is not a separate legal entity; it's an extension of the parent company, which means the parent company is fully liable for all of the branch's debts and obligations.

Key Requirements and Characteristics

• Same Name: The Singapore branch office must have the exact same name as the foreign parent company.

  
  

• Local Representative: You must appoint at least one authorized representative who is a resident of Singapore. This individual must be a Singapore citizen, a Permanent Resident, or an Employment Pass (EP) holder.

  
  

• Registered Office Address: The branch must have a local registered office address in Singapore. A P.O. Box is not acceptable.

  
  

• Filing Agent: Foreign companies are required to engage a registered filing agent (e.g., a corporate service provider) to submit the registration application to ACRA. Self-registration is not permitted.

  
  

• Annual Filings: The branch office must comply with annual filing requirements with both ACRA and the Inland Revenue Authority of Singapore (IRAS). This includes submitting audited financial statements for both the Singapore branch and the parent company.

Steps for Registration

1. Name Application and Approval: The first step is to apply for the branch name with ACRA. The name must be identical to the parent company's name. This process is typically done through the BizFile+ online portal.

   
   

2. Document Preparation: Gather all necessary documents, which must be certified and, if not in English, translated into English. Key documents include:

   
   

   • Certified copy of the parent company's Certificate of Incorporation.

   • Certified copy of the parent company's constitution (Memorandum & Articles of Association).

   • List of the parent company's directors.

   • Particulars of the appointed local authorized representative.

   • A statement of consent from the local representative.

   • Audited financial statements of the parent company.

     
     

3. Submission via BizFile+: The registered filing agent will submit the application and all supporting documents through ACRA's BizFile+ system.

   
   

4. Payment of Fees: A fee is payable for the name application and the registration of the branch. The registration fee for a foreign company branch is typically S$300.

   
   

5. Approval and Post-Registration: The application processing time is usually 1-3 working days but can take longer if referred to other government agencies. Once approved, the branch office receives a Unique Entity Number (UEN). Post-registration, you may need to apply for specific business licenses, register for corporate tax with IRAS, and register for Goods and Services Tax (GST) if your annual turnover exceeds S$1 million.

Considerations

• Liability: As the branch is an extension of the parent company, the parent company is fully liable for all the branch's activities and debts.

  
  

• Taxation: A foreign company branch is considered a non-resident company for tax purposes. It is subject to Singapore's corporate tax rate of 17% on its Singapore-sourced income, but it does not qualify for the tax incentives and exemptions available to local companies.

  
  

• Alternative Structures: If you are a foreign company looking to set up in Singapore, you should also consider other options like incorporating a subsidiary, which is a separate legal entity, or setting up a Representative Office, which is a temporary, non-profit-generating presence.

Fees

When registering a new foreign company branch in Singapore, you can expect to pay a number of fees. These fees are broken down into government charges and professional service fees.

1. Government Fees (Paid to ACRA)

The fees charged by the Accounting and Corporate Regulatory Authority (ACRA) are standard and non-negotiable.

• Name Application Fee: S$15

  
  

  • This is the fee to apply for the name of your branch. Since a branch must use the exact name of the parent company, this is a straightforward process.

    
    

• Registration Fee: S$300

  
  

  • This is the fee to register the foreign company branch itself.

    
    

The total minimum government fee for registration is S$315.

2. Bestar Professional Service Fees

Foreign companies are legally required to engage a registered filing agent (such as Bestar) to handle the registration process. This means you cannot register the branch on your own. The fees for these services can vary widely depending on the scope of services included.

A registration package from Bestar includes:

• Professional Fee for Registration: This can range from S$500 to S$1,500 or more. This fee covers the preparation and submission of all required documents to ACRA.

  
  

• Provision of a Registered Office Address: Since a P.O. Box is not acceptable, you will need a physical address. Bestar offers this for an annual fee, which can range from S$110 to S$420 per annum.

  
  

• Provision of a Local Authorized Representative: You are required to have at least one authorized representative who is a Singapore resident. If the parent company does not have an employee who can fill this role, Bestar can act as a nominee. The fee for this service can vary significantly, from S$1,800 to S$2,500 per annum, and also require a refundable security deposit.

  
  

• Opening a Corporate Bank Account: Some packages include assistance with opening a corporate bank account. This service may be an additional charge.

3. Ongoing and Compliance Fees

Once the branch is registered, there are recurring costs to maintain its compliance with Singapore law.

• Annual Filing Fee (ACRA): S$60

  
  

  • The branch is required to lodge its annual returns with ACRA.

    
    

• Annual Auditing:

  
  

  • A foreign company branch in Singapore is required to submit audited financial statements for both the local branch and the parent company. Auditing fees can vary significantly based on the size and complexity of the business, but they can be a major recurring cost, starting from S$3,000 per audit.

    
    

• Bookkeeping and Accounting:

  
  

  • You will need to maintain proper accounting records. The cost for this can range from S$250 to over S$2,500 per month, depending on the volume of transactions.

    
    

• Tax Filing:

  
  

  • Assistance with filing corporate taxes with the Inland Revenue Authority of Singapore (IRAS) costs between S$350 and S$500 per filing.

    
    

In summary, while the government fees are fixed, the overall cost of setting up and maintaining a foreign company branch will depend heavily on the professional services you require to meet all the legal and compliance obligations.

How Bestar can Help

For foreign companies, engaging a professional corporate service provider (CSP) is not just a convenience; it's a legal requirement and a strategic necessity for a smooth and compliant setup in Singapore. Here's a breakdown of how Bestar can help, from initial registration to ongoing compliance:

1. Legal Mandate and Expert Guidance

• Required Filing Agent: The Accounting and Corporate Regulatory Authority (ACRA) mandates that a foreign company must engage a registered filing agent to submit its branch registration application. This means you cannot self-register.

  
  

• Local Representative: A foreign company branch is required to have at least one authorized representative who is a resident of Singapore. If you don't have an employee who can fulfill this role, Bestar can provide a nominee local representative, ensuring you meet this critical legal requirement.

2. Streamlining the Registration Process

• Document Preparation and Vetting: Bestar will guide you on the specific documents required for registration. We will ensure all documents, such as the parent company's Certificate of Incorporation and constitution, are properly certified and translated, preventing delays or rejection by ACRA.

  
  

• BizFile+ Submission: The entire registration process is done online through ACRA's BizFile+ portal. Bestar has the necessary credentials and experience to navigate this system efficiently and submit the application correctly.

  
  

• Registered Office Address: A physical registered office address in Singapore is mandatory. Bestar offers this service, providing a compliant business address that can receive official government correspondence and legal notices.

3. Ongoing Compliance and Administration

The support from Bestar extends far beyond the initial registration. We become your local partner, ensuring you remain compliant with Singapore's strict regulatory framework.

• Annual Filings: A foreign branch must file annual returns with ACRA, which includes submitting audited financial statements for both the Singapore branch and the parent company. Bestar can handle these filings, ensuring they are accurate and submitted on time to avoid penalties.

  
  

• Accounting and Auditing: A branch is required to maintain proper accounting records and have its financial statements audited. Bestar has in-house accounting and auditing teams that can provide these services, ensuring your books are compliant with the Singapore Financial Reporting Standards (FRS).

  
  

• Tax Compliance: We can assist with corporate tax filings with the Inland Revenue Authority of Singapore (IRAS), including the submission of the Estimated Chargeable Income (ECI) and the annual tax return (Form C). We can also advise on tax-related matters and help you register for Goods and Services Tax (GST) if your turnover requires it.

  
  

• Advisory Services: Beyond the core compliance tasks, Bestar can offer valuable advice on:

  
  

  • Business Structuring: Helping you decide if a branch office is the most suitable entity for your long-term goals, or if a local subsidiary might be a better fit due to advantages like tax incentives and limited liability.

  • Employment Passes: Assisting with the application for Employment Passes for your foreign staff, which is a crucial step for any expatriate employees you wish to relocate to Singapore.

  • Business Licenses: Advising on and assisting with the application for any specific licenses or permits required for your industry (e.g., for finance, education, or food and beverage businesses).

    
    

In essence, Bestar acts as your one-stop solution for all administrative and compliance-related matters in Singapore. We allow you to focus on your core business activities, saving you time, money, and the stress of navigating a complex and unfamiliar regulatory landscape.

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