Guide to Registering a Singapore Representative Office
A representative office serves as a liaison agency of foreign companies that plan to explore business potentials in countries like Singapore. It has no legal identity and is not allowed to participate in any money-making ventures. The process of registering a representative office depends on the type of business being conducted. Enterprises dealing in finances and related fields may undergo a more complex procedure compared to other business sectors which often are more simple. It would help if the parent company is already an established name and the scope of work outlined falls under the function of a representative office.
Since a representative office serves as an extension of a foreign company, it is not permitted to conduct business for financial gains. Its activities are limited only to non-profit endeavors like feasibility studies and market research. As such, it cannot enter into business agreements, negotiations, trading, leasing of property, and the likes.
Important considerations for Singapore Representative Office
part of a parent company
Representative office is considered as an intrinsic part of a parent company which is indirectly responsible for any dealings of the former.
Criteria to be satisfied for setting up representative office
Any foreign company that plans to establish its presence as a rep office in Singapore must meet the following requirements:
- A minimum sales turnover of US$250,000;
- The company must be in operation for at least three years;
- The representative office adheres to the guideline that there must be no more than five employees working in the representative office
Application can still be made for representative office if the above criteria is not satisfied. However approval in that case is with authorities.
Name of representative office
The representative office will bear the name of the parent company. In case of similarity to existing Singaporean business, the proper authorities will make the final decision
Duration of three years
The representative office can only exist as it is for a maximum of three years. Otherwise, it should be transformed into either a Singapore branch office or a company subsidiary to proceed with its operation.
Chief head of representative office must be from parent company
The representative office must be headed by a chief staff member coming from the parent company. The appointed person needs to relocate Singapore to physically oversee the operations. Based on the guidelines by authorities, the office can employ a maximum of five personnel to assist the chief representative in the conduct of the office’s operations.
All official communication must disclose its nature as representative office
Name plaques, business cards, notifications, or any form of official communication bearing the name of the representative office must always include the information that it is a representative office duly registered to conduct business in Singapore
Exemption from filing requirements
Since the representative office is not incorporated, it is exempted from filing the necessary requirements expected from incorporated or registered entities. In the same token, it is not required to keep legal documents or file tax return in Singapore.
Representative office is allowed to engage in following activities
- Information gathering about clients and markets;
- Research focused on specific information related to pricing prospects, demand of product, and requirements of end-users;
- Information-gathering in relation to establishing a permanent business venture in the country;
- Establishing business contacts and answering queries regarding products;
- Trade show and exhibition participation.
Representative office is not allowed to engage in following activities
- Engaging in profit-making ventures, like import and export;
- Third party leasing of office premises
- Business contract negotiation or agreement; accepting letters of credit for the parent company; issuing of invoices
- Soliciting information regarding raw material or industrial parts sources or suppliers
- Consultancy or systems execution services
- Marketing, promotional, and advertising activities
- Liaising between clients and parent company
- Operating or managing sales agents, distributors, as well as branches or subsidiaries
- Performing quality control operations or supervisory endeavors
Documentary Requirements for Registering a Representative Office
Opening a Bank Account for representative office
Once registered, the Singapore representative office can initiate opening a bank account in any of the local or international banks operating in Singapore. Each bank has its own procedures and processing of application may take anywhere from two to ten business days.
A representative office is the most efficient way of conducting operations prior to engaging in full-time operations in Singapore. It provides a foreign company with a cost center, although its activities cannot include any profit-making ventures. The representative office can serve as the hub of the parent company in its operation within the country or across the region.