Singapore is an attractive business hub that offers pro-business policies, a strong legal system, and a world-class infrastructure, all while being strategically located for access to both regional and global markets.
Foreign companies looking to establish a business presence in Singapore often choose to either open a branch office or a subsidiary company. The business structure of your choice will have a direct impact on your business costs, operations, and much more. Hence, you should understand the differences between a branch and a subsidiary in Singapore.
This article aims to demystify the decision of choosing between setting up a branch office and a subsidiary company in Singapore. We will cover key differences in legal structure, liability, costs, and tax implications you must know. We will also introduce Wise Business, a banking alternative to help simplify your finances and enable you to manage multiple currencies cost-efficiently, regardless of your business structure.
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Here are three key differences between establishing a branch office and a subsidiary company in Singapore.
A branch is legally recognised as an extension of the parent company, while a subsidiary company is considered a separate legal entity incorporated in Singapore.
You should also note that a branch office of a foreign company must have a locally resident authorised representative, while shares of a subsidiary can be held by the foreign company as the sole shareholder².
If you are unsure where to start, read our ultimate guide on how to start a business in Singapore as a foreigner.
As a legal extension, the parent company is directly liable for its branch company’s debts and obligations. Comparatively, a subsidiary offers limited liability, shielding the parent company from the subsidiary's debts and obligations.
As an extension of a foreign parent company, a branch company will be taxed as a non-resident entity. On the other hand, a subsidiary will be taxed as a Singapore entity and would be eligible for existing tax incentives, grants, and exemptions.
Both branches and subsidiaries are required to comply with the annual filing requirements by the Accounting and Corporate Regulatory Authority (ACRA) and the Inland Revenue Authority of Singapore (IRAS).
A branch office will be required to submit both the parent company's and the branch office’s financial statements, while a subsidiary company will only need to file financial statements related to the business operations of the subsidiary.
Foreign businesses looking to incorporate in Singapore should be familiar with local regulations and ACRA’s registration process. Refer to our step-by-step guide on how to register a company in Singapore.
Here’s a list of considerations that could help you select the best business structure for your needs:
While there are pros and cons to both branch and subsidiary structures, a common pitfall is the underestimation of costs, especially when it comes to fees from necessary transactions.
Corporate banks are notorious for slapping on hefty foreign currency conversion fees and hidden exchange rate markups that drive your costs up quickly, especially when it comes to international payments. Wise Business was designed as a banking alternative that offers low fees and the mid-market exchange rate - the exchange rate you see on Google without markups.
Foreign companies must engage a registered corporate service provider to register a branch office in Singapore, as foreigners do not have access to SingPass⁴. The corporate service provider can be a corporate secretarial firm, accounting firm, or law firm that is registered with ACRA.
You will require the following documents to register a branch office in Singapore:
There will be a fee of SGD 300 to register a branch of a foreign company, on top of the fee from your corporate service provider. While approval can be given within 15 minutes, processing time could take between 14 to 60 days should approval be required from any relevant government agencies.
There are no specific minimum capital requirements to register for a branch. However, you should note that your company’s authorised capital will need to be declared during the registration process.
Setting up a subsidiary company in Singapore is akin to setting up a local company. For a step-by-step guide, refer to our article on how to start a business in Singapore. Foreign companies without access to SingPass or Corppass will need to engage a registered corporate service provider as well.
The registration fee for a subsidiary company in Singapore is SGD300, on top of the fee from your corporate service provider. Approval is fairly quick as well if your registration does not require additional approval from any government agencies.
There is a minimum capital requirement of SGD1 to incorporate a subsidiary.
On top of the registration fees and minimum capital requirement, you should also factor in the cost for secretariat services that can help with both accounting and administrative work, and compliance management and service.
As mentioned above, a branch company will be taxed as a non-resident entity, while a subsidiary will be taxed as a Singapore entity and will be eligible for existing tax incentives, grants, and exemptions.
Foreign companies are required to lodge all financial statements, including those from their Singapore branches, as part of their annual filings with ACRA⁵.
Subsidiary companies will only need to file financial statements related to the business operations of the subsidiary.
In Singapore, a branch is legally recognised as an extension of the parent company. It must bear the same entity name and operate in the same business activities as its parent company.
On the other hand, a subsidiary company is considered a separate legal entity. Hence, it can be incorporated with a unique name and enjoy greater flexibility in its choice of business activity.
A branch office is considered an extension of its foreign parent company. Hence, all liabilities and debts of the branch are borne by the parent company. This means that if the Singapore branch is sued or incurs debt, the parent company’s assets may be exposed. The branch must also file the parent company’s audited accounts in Singapore, making the parent’s financials visible locally.
However, a subsidiary registered in Singapore is a separate legal entity from its foreign parent. The parent company’s liability is limited to its shareholding in the subsidiary, and creditors cannot pursue the parent’s assets for the subsidiary’s debts.
While foreign companies will need to engage a registered corporate service provider to set up either a branch or a subsidiary, a branch office is generally easier to set up, as its information, structure, and constitution follow the parent company’s. You will be required to provide certified copies of the parent companies’ incorporation documents.
On the other hand, a subsidiary company requires a separate constitution. That said, the subsidiary company is treated like a local company, giving you access to benefits like tax incentives, the ability to set up a local bank account easily, and more.
While having a local bank account could make it easier to build trust within Singapore, businesses that work with regional or global partners and clients would need to manage multiple currencies efficiently. Wise Business is a multi-currency account that lets you hold and manage 40+ currencies while enjoying low-fee transactions and saving on hidden foreign exchange markups. With the ability to integrate with popular accounting software, you can skip the hassle of having to manually consolidate financial transactions across multiple branches or subsidiaries, simplifying your accounting workflow instantly.
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Branches and subsidiaries are taxed at Singapore’s standard corporate tax rate, which is 17% at the point of writing. While branch offices are considered non-residents for tax purposes, only income derived in Singapore will be taxed⁶.
A subsidiary offers greater autonomy in decision-making, flexibility to diversify into new business areas, and access to local grants, financing, and tax benefits. A subsidiary is also perceived as a Singapore company, making it easier to build trust, secure contracts, and establish long-term partnerships locally and regionally, providing the foundation required for successful international expansion independent from its parent company.
A branch is an extension of the parent, taxed only on Singapore income but with no liability protection or local incentives. A subsidiary is viewed as a separate local entity, offering limited liability, tax benefits, and greater operational flexibility.
For international businesses looking to expand to Singapore, branch offices are faster and simpler to set up, but tie liabilities, profits, and reputation directly back to the parent company. Comparatively, setting up a subsidiary company may require more effort upfront but offer limited liability, access to tax incentives, operational flexibility, and stronger local credibility. You should weigh the differences between a branch’s and a subsidiary’s legal requirements, tax structure, and costs when choosing a suitable business structure.
Regardless of the business structure you prefer, if your business handles international payments and holds multiple currencies, you would be familiar with the costs of foreign currency conversion fees and hidden exchange rate markups. Wise Business offers an alternative that will always give you the mid-market rate with transparent conversion fees starting from 0.26%.
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Sources:
Sources checked on: 8 Sep 2025
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This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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