If you are a foreign company looking to set up a presence in Singapore, you have three main entry options.

Choosing the wrong one can have massive consequences for your Tax Bill and Legal Liability.

Many foreign directors assume a “Branch Office” is the simplest route. In Singapore, that is rarely the case. In this guide, we compare the Subsidiary (Pte Ltd), Branch Office, and Representative Office (RO) to help you decide.

1. The Subsidiary (Private Limited Co.) – Recommended

A Subsidiary is a standard Singapore Private Limited company where the shareholder is your foreign corporate entity.

  • Legal Status: It is a separate legal entity. If the Singapore subsidiary gets sued, your parent company back home is generally protected.

  • Tax Benefit (The Big Win): It is considered a Singapore “Tax Resident.” This means it qualifies for the Start-Up Tax Exemption (SUTEC) (75% off first $100k profit) and Singapore’s Double Tax Agreements (DTAs).

  • Ownership: Can be 100% foreign-owned.

Verdict: This is usually the best option for tax efficiency and liability protection.

2. The Branch Office – High Liability

A Branch Office is legally an “extension” of your parent company. It is not a separate entity.

  • Legal Status: The parent company is 100% liable for all debts and lawsuits of the Singapore branch.

  • Tax Disadvantage: A Branch is generally considered a “Non-Resident.” It does NOT qualify for the local tax exemptions (SUTEC). You pay the flat 17% corporate tax from Dollar One.

  • Audit: You must file the audited accounts of your Head Office (Parent Company) with ACRA, which means your global financials become public record in Singapore.

Verdict: Only recommended for MNCs that need to consolidate accounts strictly or specific banking sectors.

3. The Representative Office (RO) – Temporary

An RO is a temporary setup designed for Market Research only.

  • Restriction: You CANNOT earn revenue, issue invoices, or sign contracts. You can only conduct research and feasibility studies.

  • Lifespan: It is valid for 1 year (renewable up to 3 years maximum). After that, you must upgrade to a Subsidiary or close.

  • Staffing: You are limited to a small number of staff (usually fewer than 5).

Verdict: Good for testing the waters if you are not ready to sell yet.

Summary: The Comparison Table

Singapore Subsidiary vs Branch Office vs Representative Office Comparison Table Tax Liability

Which Should You Choose?

  • Choose a Subsidiary if: You want to sell goods/services, enjoy low tax rates (0-8.5% effective rate on first $100k), and protect your parent company from liability.

  • Choose a Branch if: You are a massive MNC and tax exemptions don’t matter to you, or you need to operate as the same legal entity for branding/licensing.

  • Choose an RO if: You just want to send 1 staff member to Singapore to meet potential partners, but will not do any actual business yet.

At Excellence Singapore, we assist foreign companies with all three setups. We also provide the mandatory Nominee Director for Subsidiaries.

Ready to expand to Asia? Contact our Foreign Incorporation Team.