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If you want to expand or start your business in South East Asia, Singapore has established itself as a vital entry point and a desirable hub for international corporations. To turn to Foreign Company & Representative Office here are the things you really need to consider:
The following may be of interest to a foreign company looking to expand or incorporate its activities in Singapore:
There are three alternatives available to international businesses that wish to start up shop in Singapore, based on their business objectives:
- There are many different types of subsidiary companies.
- Branches are locations in which a corporation has a physical presence.
Firm that is a subsidiary of another
Subsidiary companies are founded in countries other than the parent company’s home nation. Another company, either domestic or international, has a significant stake in the company. In Singapore, a corporation may have 100 percent foreign ownership, allowing foreign firms to take full control of the shares or establish a Singaporean subsidiary.
Under Singaporean law, subsidiaries are considered separate legal entities from their foreign parent companies. Thus, it’s treated as if it were a Singapore-based company. This means that a subsidiary’s obligations and debts cannot be held accountable for the assets of the parent company’s subsidiaries.
Exceptionally tax-efficient corporate entities are locally based subsidiary enterprises that have been appropriately created. Due to their resident status, these enterprises have easy access to local funds, government incentives, and favorable tax treaties. This is advantageous to them.
The employment of subsidiaries by individuals or companies operating small or medium-sized businesses is often advocated
Abbreviated to Branch Office, the phrase “branch office” refers to a legally created legal entity in Singapore that extends the activities of a foreign parent firm there. For the most part, these offices may perform any commercial task assigned to them by their parent organisations. Repatriation of their funds and earnings is possible. Branches operating in Singapore are taxed heavily on the earnings they make in the nation.
These offices are non-resident entities under Singaporean law, and it is vital to know this. This means that the head office of the relevant foreign firm in Singapore will be held liable for any errors or omissions made by the Singapore branch office. Some of the tax incentives provided to subsidiaries and local companies are not accessible to branch offices, which are regarded as non-residents.
Establishing a branch office in the country is highly recommended for anybody running a medium- to large-sized company with overseas operations that specialises in a wide variety of products and services.
Representatives’ Office
a representative office is a temporary organisation that permits foreign companies to manage their business affairs or do market research without engaging in any productive commercial operations in Singapore, as defined by Singaporean law.”
Representative offices do not have legal personalities, which is an important element to remember while discussing them. It’s because of this that these offices are unable to carry out business operations on their own or on behalf of their parent companies in other countries (such as signing contracts or creating letters of credit).
Conclusion
In many countries, even if they do not actively engage in the activities of their representative offices, foreign firms are nonetheless held responsible for everything that happens there.
If you want to learn more about a country’s business environment before committing to an investment, you may want to consider opening a representative office there. If the company has a lot of non-core activities that need to be handled throughout the country, the same holds true.
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