Derivatives Options

Strategically located at the cross roads of East and West, Singapore is a natural choice for companies who wish to create a foothold in the Asia region. Setting up in a foreign country, however, requires knowing the local regulations and opportunities. If not, you could easily make the wrong choices.If your company wishes to create a presence in Singapore, there are three options available. You can set up a Branch Office, a Subsidiary Company or a Representative Office, and the registration must be carried out by a professional firm in Singapore.The three options differ significantly and the one you choose will depend strongly on your company’s business plan and strategic goals.Subsidiary CompanyA subsidiary company is a locally incorporated private limited company whose majority shareholder is another local or foreign company. As Singapore allows 100% foreign ownership in companies, you may incorporate a local limited liability company in Singapore and own 100% of the shareholding. This is the most preferred registration option for most foreign companies as it is tax efficient and carries several benefits. The subsidiary company is considered separate from your company; even if you are the only shareholder and any liability of the subsidiary will not be extended to your company.The subsidiary company you set up can have a different name from your company and it will be treated as a Singapore resident company, which means that it will be eligible for tax exemptions and incentives available to local companies. Keep in mind, however that the subsidiary must have at least one director who is a Singapore Resident (e.g. citizen, permanent resident, or employment pass holder), and there must be a registered office in Singapore where the statutory documents of the company are kept.Representative OfficeIf your interest in Singapore is simply to explore the market or manage company affairs without conducting any business for profit, you can set up a representative office in Singapore. This is a temporary setup with no legal persona that can undertake promotional and liaison activities on behalf of your company. While the office cannot enter into any contract or engage in trading directly, it can engage in negotiations of contracts and deals, as long as the parent company concludes them. A representative office can also engage in customer service but only to the point of answering queries on behalf of your company. It cannot render technical advice or repair services. Also, the representative office must be staffed by someone from your company’s head office, who can then engage Singaporean support staff. Unlike with a subsidiary company, your company will bear implicit liability for the activities of a representative office in Singapore.Branch OfficeA branch office is a registered legal entity of your company, much like a subsidiary company. It will, however, be treated as an extension of your company, which means that your company will bear ultimate responsibility for any liabilities arising from it. Also, the branch office is considered a non-resident entity and therefore, is not eligible for tax exemptions and incentives that local companies receive.Your Singapore branch office must have the same name as your company and must be approved first before branch office registration. Also, your branch office must appoint 2 agents who are residents in Singapore to accept services of process and notices and it must have a registered office address in Singapore.The branch office can conduct any type of business activity that falls within the scope of your company and can repatriate its earnings and capital. The portion of the branch office’s income that comes from operations carried out outside Singapore will not be subject to taxes. Only the earnings derived from its operations in Singapore will be subject to the prevailing local corporate tax rates.For more information, please visit http://www.asiabizservices.com