When a foreign company decides to enter Singapore, the first structural question is not how to incorporate but what kind of presence to set up. There are three options: a locally incorporated subsidiary, a branch office of the foreign parent, or a representative office. They differ sharply in liability, tax treatment, what they are allowed to do, and how much ongoing compliance they carry.
This guide compares all three as of 2026 and explains why most foreign companies end up choosing a subsidiary.
The Three Options at a Glance
| Factor | Subsidiary (Pte Ltd) | Branch Office | Representative Office |
|---|---|---|---|
| Legal status | Separate Singapore company | Extension of the foreign parent | Temporary liaison office of the parent |
| Parent's liability | Limited to its shareholding | Parent is fully liable | Parent is fully liable |
| Registered with | ACRA | ACRA | Enterprise Singapore |
| Can earn revenue | Yes | Yes | No |
| Local officer required | At least 1 locally resident director | At least 1 resident authorised representative | A head of office on a work pass |
| Tax residency | Can be Singapore tax resident | Usually non-resident | Not taxable (no revenue) |
| Startup tax exemption | Eligible if conditions met | Not eligible | Not applicable |
| Access to Singapore tax treaties | Yes, with a Certificate of Residence | Generally no | Not applicable |
| Financial statements filed | Its own | Branch accounts plus the parent's accounts | Not filed with ACRA |
| Duration | Indefinite | Indefinite | Time-limited |
Option 1: Subsidiary (Private Limited Company)
A subsidiary is a new Singapore private limited company in which the foreign parent holds some or all of the shares. It is a separate legal person, so its debts and liabilities stay with the subsidiary rather than flowing back to the parent.
Why most foreign companies choose it
- Ring-fenced liability. Claims against the Singapore business cannot automatically reach the parent's balance sheet.
- Tax residency and treaty access. If it is managed and controlled in Singapore, a subsidiary can obtain a Certificate of Residence from IRAS and use Singapore's network of tax treaties.
- Local reliefs. A qualifying new subsidiary can claim the startup tax exemption for its first three Years of Assessment, and the partial tax exemption afterwards.
- Credibility. Local customers, banks, landlords, and government agencies are used to dealing with Singapore companies, and many grants require one.
- Clean exits. The parent can sell the subsidiary's shares, bring in local partners, or list it, none of which is possible with a branch.
What it requires
The same as any Singapore company: at least one shareholder (the parent can be the sole shareholder), at least one director who is ordinarily resident in Singapore, a company secretary appointed within six months, a registered office in Singapore, and a constitution. If none of the parent's people are resident, a nominee director can fill the resident director role until someone relocates on an Employment Pass.
Option 2: Branch Office
A branch is the foreign company itself, registered to do business in Singapore. It carries the parent's name and has no separate legal identity, which is both its main simplicity and its main drawback.
Key features
- Unlimited exposure for the parent. Any liability of the branch is a liability of the parent company.
- Authorised representative. The branch must appoint at least one authorised representative who is ordinarily resident in Singapore and is responsible for its filings.
- Heavier disclosure. Each year the branch files its own accounts and the parent company's financial statements with ACRA, which some groups prefer not to make available.
- Tax. Branch profits are taxed at the same 17% headline rate, but as a non-resident the branch usually cannot claim the startup exemption or rely on Singapore's tax treaties. Profits may also be taxed again in the parent's country, subject to foreign tax credits there.
When a branch makes sense
A branch can suit businesses where the parent's own balance sheet is what customers or regulators care about, such as certain banks, insurers, and shipping or construction groups bidding on large contracts. It can also suit groups whose home-country tax rules make branch losses immediately usable against parent profits.
Option 3: Representative Office
A representative office is a temporary, non-commercial presence registered with Enterprise Singapore. It lets a foreign company test the market before committing to a full entity.
- Permitted: market research, feasibility studies, promoting the parent's brand, and acting as a liaison for the parent.
- Not permitted: signing sales contracts, issuing invoices, trading, or earning any income in Singapore.
- Time-limited. It is intended as a short-term arrangement, renewed annually for a limited number of years, after which the company is expected to set up a branch or subsidiary.
- Small team. Staff numbers are capped, and the office is headed by a representative sent by the parent.
If staff at a representative office start negotiating or concluding contracts, the parent may be treated as carrying on business in Singapore and become taxable here. Once commercial activity begins, move to a subsidiary or branch.
How to Choose
- You want to trade, hire, and grow in Singapore with limited risk to the parent → Subsidiary
- You want to use Singapore's treaties or local tax reliefs → Subsidiary
- Customers or regulators rely on the parent's balance sheet, and you accept full parent liability → Branch
- You only want to research the market for a year or two, with no revenue → Representative office
For the large majority of foreign companies, especially startups, SMEs, and groups planning a regional hub, a subsidiary is the better structure. It limits risk, unlocks Singapore's tax reliefs and treaties, and is the easiest structure to sell, restructure, or bring investors into later.
Setting Up a Subsidiary: The Steps
- Board resolution from the parent approving the subsidiary, its name, share capital, and the people who will act for it.
- Corporate documents from the parent, typically the certificate of incorporation and constitutional documents, which may need to be apostilled or legalised.
- Name approval through ACRA's BizFile+ via a registered filing agent. Check availability first with our Company Name Checker.
- Appoint the resident director, company secretary, and registered office.
- Declare registrable controllers so the register of controllers is correct from day one.
- Incorporation, usually approved within one to three working days once documents are complete.
- Bank account, tax registration, and work passes for any staff relocating from the parent.
Conclusion
Branches and representative offices have their place, but they are niche choices. If you plan to earn revenue in Singapore, hire locally, or use Singapore as a base for the region, a subsidiary gives you limited liability, access to local tax reliefs and treaties, and a structure that can grow with you.
Official Sources
Frequently Asked Questions
No. Both pay corporate tax at the same 17% headline rate on Singapore-sourced profits. The difference is access to reliefs: a branch is usually treated as non-resident, so it cannot claim the startup tax exemption, generally cannot rely on Singapore's tax treaties, and its profits may also be taxed in the parent's home country.
A branch does not have directors of its own. Instead it must appoint at least one authorised representative who is ordinarily resident in Singapore. A subsidiary needs at least one locally resident director, like any Singapore company.
No. A representative office is limited to non-commercial activities such as market research, feasibility studies, and liaison work for the parent. It cannot sign sales contracts, issue invoices, or earn revenue in Singapore, and it is meant as a temporary arrangement.
Yes, but not directly. You incorporate a new Singapore company, transfer the branch's business, assets, and staff to it, and then deregister the branch with ACRA. Plan the transfer of contracts, employees' work passes, and any tax consequences in the parent's jurisdiction.
If you are expanding a foreign company into Singapore in 2026, start with the structure question before the paperwork: a subsidiary suits almost every business that plans to earn revenue here, a branch suits a narrow group of balance-sheet-driven industries, and a representative office is only a short-term listening post. Karman sets up Singapore subsidiaries for foreign parents end to end, including the resident director, corporate secretary, and registered office. See our incorporation service to get started.