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When do Foreign Companies need to register a branch or company in Singapore?
We are often asked by foreign companies whether they are required to register their company in Singapore before they can carry on doing business in Singapore.
The answer is not as simple as it may appear and depends on whether the foreign company is ‘carrying on business’ in Singapore.
For example, if the foreign company is doing occasional transactions from overseas it may not need to be registered as a branch or company in Singapore.
Conversely, if the foreign company is conducting regular transactions in Singapore, it may need to register a branch or company in Singapore.
Procosec Asia is a registered company secretarial agent authorised by the Accounting and Corporate Regulatory Authority of Singapore to assist clients in setting up branches and companies in Singapore.
To find out more about our suite of Singapore company compliance services, please visit www.procosecasia.com
What are ‘Dormant’ Companies in Singapore?
Companies are occasionally set up to achieve a specific purpose and, for certain reasons, do not actually begin operations either from the date of their formation or for a particular financial year.
These are known as dormant companies. A dormant company is a company in which no accounting transaction takes place either from the date of formation or throughout a particular financial year.
In Singapore, provided certain conditions are met, dormant companies will be exempted from both:
1. Preparing financial statements for the financial year in which the company was dormant; and/or;
2. Appointing a firm of Singapore auditors.
It should be noted, however, that there are circumstances where a dormant company may nevertheless be required to comply with points 1-2 above. For example, if the dormant company is not deemed to be a ‘dormant relevant company’ due to being a subsidiary of a listed company or holding assets valued at over SGD 500,000.
To find out more about our company incorporation and compliance services in Singapore, please contact: www.procosecasia.com
What are Company Resolutions and how are they passed?
Singapore companies are required to make decisions from time to time.
For example, this could be to appoint new board members, conduct share transactions or appoint a firm of auditors.
All of these decisions, as well as many others, are made by the company by passing resolutions.
Resolutions may either be passed in writing (i.e. by signatures of all or a requisite majority of directors/shareholders) or, alternatively, at a duly convened directors/shareholders meeting.
Shareholders resolutions are either passed as ordinary resolutions or special resolutions.
• Ordinary resolutions are passed by a simple majority of those present and voting; and
• Special resolutions, on the other hand, typically require ¾ majority of all eligible votes of shareholders.
For more information as to our company secretarial services for your Singapore company, please visit www.procosecasia.com
When is it necessary to register a Branch Office in Singapore?
Foreign companies who may be involved in a transaction or plan to conduct business in Singapore will be required to assess whether they are required to register a Branch Office.
A Branch Office is an extension of the foreign company registered in Singapore.
In order to determine whether a foreign company is required to register a Branch Office in Singapore, it is important to determine the nature and extent of activity the foreign company intends to conduct in Singapore.
In Singapore, all foreign companies which establish a place of business or carry on business in Singapore must be registered as a Singapore Branch Office.
If the foreign company carries on a single transaction in Singapore and nothing else, it is unlikely that the foreign company is required to register a Branch Office in Singapore.
However, if the foreign company is otherwise involved in managing any type of property In Singapore it is likely to be required to register as a Branch Office in Singapore.
For assistance on registering a Branch Office in Singapore, please contact us at: info@procosecasia.com or visit our website: www.procosecasia.com
Issuing Shares for a Singapore company otherwise than in cash
Either prior to or following setting up of a Singapore company, it is common for shares to be issued either to founders or new incoming shareholders.
Typically, shares are issued in exchange for cash paid by the shareholder to the Singapore company.
However, it is also possible for Singapore companies to issue shares for non-cash consideration.
Such non-cash consideration could be, for example, a transfer of assets (whether tangible or intangible in nature).
When your Singapore company issues shares for non-cash consideration, it is important to ensure that the appropriate return is submitted to the Accounting and Corporate Regulatory Authority since the shares will only legally be issued once the relevant company secretarial filing is submitted.
There are also other particular requirements, and it is always advisable to contact your Singapore company secretarial agent in this regard.
For more information as to our company’s Singapore compliance services, please visit our website: www.procosecasia.com