USC is prestigious in Singapore
Singapore: strategies to enter the market
Tips for setting up a representative office or branch
A liberal economic system with low taxes, duty-free and a stable, predictable legal framework is one of the key success factors of Singapore as a location. A company can be set up quickly and inexpensively, as there are hardly any restrictions.
Further information can be obtained from the one-stop government agency Enterprise Singapore, which also has an office in Frankfurt, or the accounting and corporate regulatory authority (ACRA).
The higher operating and living costs for seconded personnel are offset by a well-functioning infrastructure and well-trained personnel, high productivity and political and economic stability. In addition, there is an attractive tax system for both income and corporate taxation, as well as incentives for high-tech sectors.
The Singaporean company law, which is based on the Companies Act 1967, provides for various types of company.
Representative office (representative or liaison office)
The opening of a mere representative office is the weakest form of market presence for a foreign company. This may not conclude any independent contracts, carry out any deliveries, issue any invoices, etc. Registration can initially also take place for a limited period of time, for example for purposes of market research or market exploration. You can also register for a representative online.
The following types of company are also possible:
Sole proprietorship is the name of the registration for the sole trader. He is liable for all liabilities with his private assets.
Partnership is an amalgamation of several natural persons to form a partnership. It can be established by between two and 20 personally liable partners. However, it has no legal capacity and corresponds roughly to the German general partnership (oHG).
The limited partnership corresponds roughly to the limited partnership under German law and has at least one unlimited personally liable partner and other partners who are only liable with their contribution, but are excluded from the management.
The partner with unlimited liability can be a natural or a legal person. The limited partnership does not have its own legal personality. The partners are subject to personal income tax on corporate profits.
- Limited liability partnership (LLP)
The legal form of the limited liability partnership (LLP) combines elements of the partnership with those of a corporation. The liability of the partners is limited to the capital contribution. From a tax point of view, however, the LLP is treated like a partnership; that is, it is not subject to corporation tax. Rather, the profits are skimmed off through the income taxation of the individual shareholders. The LLP must be entered in the commercial register (registrar).
Companies are subject to the provisions of the Companies Act, a distinction is made between private company and public company. Private companies have one to a maximum of 50 shareholders and are easier to set up and manage, but are subject to restrictions on the transferability of shares. In addition, the maximum number of shareholders is limited to 50. Public companies have at least seven shareholders and can issue freely tradable shares. The legal forms also differ in specific liability law peculiarities.
Private companies are easier to set up and have less complex corporate administration and structure than public companies. That is why this form is generally preferred by foreign investors.
- Branch office
A foreign company can set up a legally dependent branch instead of an independent subsidiary. This is not regarded as an independent legal person, its activities are attributed to the parent company. It must therefore also be responsible for all liabilities. Therefore, every foreign company should carefully consider which of the two forms to choose.
Registration takes place online via the Bizfile Internet platform. Signatures have been replaced by an electronic identification system. In place of formal declarations, which previously had to be submitted to public institutions (courts, notaries, etc.), electronic declarations are being made within the Bizfile system. Incorrect electronic information is also subject to criminal penalties, as was the case with previously certified documents.
By completely switching to e-filing, the registration time of a company could be reduced from five days to (in simple cases) 15 minutes; the cost of registration also fell noticeably.
Tip:More information on setting up a branch can be found in the “Practical Guide for Foreign Investors - Singapore” by the law firm Respondek & Fan Pte Ltd, Singapore, as well as in the GTAI publication “The Right Compact Singapore”.
You can find more information about Singapore in the article: "The tiger country Singapore has to tighten its belt" by Ernst Leiste, on the online application "Export Plus", Reguvis Fachmedien GmbH.
Source: "Export Plus Online", Reguvis Fachmedien GmbH, Cologne
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