Open foreign enterprise for business expansion: Singapore
When a business becomes successful in its home market, the company often wants to expand overseas to attract new customers. Expanding a business into global markets offers many advantages, including growth and sales opportunities. To make sure everything goes smoothly, it's important to find out in advance what points to pay attention to when opening a foreign branch in 2022.
Features of branches
A branch office is a method a company can use to gain a foothold in a particular country's market. It is regarded as a dependent structure in relation to the parent company, so all its decisions and obligations fall under its responsibility.
When opening a branch abroad, there are many factors to take into account. First of all, the laws of the country that regulates its work. Regardless of the jurisdiction where it will be registered, it is necessary to:
- register the branch as a legal entity with the Commercial Register of the country where it is located, other government agencies;
- rent an office in the jurisdiction;
- hire an employee who will be responsible for the operation of the company in the country, to be responsible if the company encounters financial or other difficulties;
- hire staff in accordance with the labor laws;
- obtain special licenses and permits (if necessary).
The administrative costs of a branch are usually similar to those of a local company (this also applies to taxes). In terms of confidentiality, unless you incorporate in an offshore country, the information about the owners is usually available to the public.
Advantages of branches
- A branch is a subordinate legal entity, but has the right to conduct business in an independent manner;
- A local representative office helps build brand credibility;
- Lower registration and operating costs than when a separate business is registered;
- The liquidation procedure for a branch is simpler than for an independent company.
How to open a branch office
Expansion into other countries is not as easy as one would like, as it often involves various problems and risks. Therefore, before proceeding with registration, it is necessary to carefully analyze the situation, the market, to make certain steps:
- Make acquaintances with influential people who are related to the activities of your company. Evaluate how you can use them to expand your business, including mentoring by them;
- Assess your capital. To succeed overseas, your financial base should be solid;
- Contact an experienced and reputable market research firm. They will evaluate your company and tell you if there are prospects in that country's market;
- Marketing has to be tailored to the country where the branch will be located. Therefore, it is important to deal with cultural differences and language barriers;
- Train the employees who will be working in the branch on the specifics of your business. The success of the company's expansion will directly depend on their work.
How to register a branch office
How to open a branch office, you can consider the example of Singapore, which is ideal if you plan to expand in the Asian market:
- The local branch office must be registered with the Accounting and Corporate Resolution Authority (ACRA);
- The trade name of the branch must match that of the parent company;
- Hire a local representative who is a resident of Singapore. It can also be a foreigner who has obtained a work permit in the jurisdiction. The representative of the parent company, who is not a resident and does not have a work permit, will not be able to register a business;
- The activities of the company in Singapore must be consistent with the activities that are specified in the constituent documents of the parent company.
To register a foreign branch in Singapore it is necessary to provide certified copies of the Charter, certificate of incorporation of the parent company. It is also necessary to submit the latest version of audited financial statements and other papers. Provided the foreign company has submitted all necessary documents, the local representative office will be registered within 1-2 days.
Presence of a branch implies work in the territory of Singapore, so it will not enjoy tax benefits, as an offshore company. But its presence provides access not only to the local but also to the Asian market.
How to open a branch office quickly
If you are planning to expand your business and are wondering where best to open a branch, contact IT-OFFSHORE experts and we will help you.