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Main differences between Singapore Branch and Singapore Subsidiary

The two most important options for foreign companies incorporating in Singapore are either registering a Singapore branch office or a Singapore subsidiary company. Both types of offices can be fully foreign owned and can even be managed from overseas. However, each of those two companies have their own characteristics and it is highly important that foreign business owners first learn about branch offices and subsidiaries in Singapore and understand what is right for their specific situation. Some of the main differences between the two types of companies are as follows:
1) Legal Status: A Singapore subsidiary company has its own legal status. This type of business is considered separate from their owners or shareholders. Being a separate legal entity, these companies can own property in their own name, they can enter into contracts and also be in a different business activity than its parent company. A Singapore branch office is considered as a legal extension of its head office located overseas. Due to this, the branch office needs to have the same name and be in the same business activity as its parent company. Branch offices do not have a separate legal identity from its owners.
2) Asset Protection: Continuing from the above point, since subsidiary companies have their own legal status, liabilities, debts or legal claims against the Singapore subsidiary is not passed on to its owners. This means the personal assets of the shareholders are always safe and their liability is to the extent of their capital investment in the company. On the other hand, branch offices do not offer the same protection to their owners as they are simply a legal extension of the head office. Hence any legal claim against the Singapore branch can be directly passed on to the parent company located overseas.
3) Staff Requirements: Singapore subsidiary companies need to appoint at least one local resident director in their company. They must also appoint a local resident company secretary. As far as branch offices are concerned, they must appoint at least one local agent who will represent the foreign company or the branch in front of government agencies in Singapore.
4) Filing Returns: Singapore subsidiary companies need to submit their own books of accounts, profit or loss statement and balance sheet when filing annual returns in Singapore. However, branch offices may be required to submit the audited accounts of the parent company as well since it is simply an extension of the foreign head office.

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