Representative Office in Singapore
Singapore, from the past few years, has established itself as a reputable financial and regional trading centre. It is the world’s busiest transshipment port and a top location for investments in the Asia Pacific region. Factors such as its strategic location, competitive workforce, pro-business environment and forward-looking economic policies positions Singapore as a natural gateway to Asia and the region. Naturally, an investor will find it ideal to set up their business in Singapore.
A foreign company which is interested in establishing its presence in Singapore but does not intend to actually carry out any business there can get in the country by establishing a representative office. Such foreign companies by setting up a representative office can analyze, interpret and understand the potential of Singapore and surrounding markets for their business. After completing Singapore representative office registration, the RO is considered as a temporary setup engaging mainly in administrative tasks such as market research and feasibility studies.
Business Activities Allowed for an RO in Singapore
Since a representative office is established in a foreign country with a purpose of conducting market research and feasibility studies on the viability of establishing a permanent business, Singapore allows following activities for an RO establishing in their country:
- Gathering information on competitors and customers in the market
- Conducting market research on product demand, customer requirements, and price expectations
- Collecting information on setting up a permanent business entity in Singapore
- Building trade contacts and answer product inquiries
- Participating in trade shows and exhibitions
Business Activities Not Allowed for an RO in Singapore
A representative office in Singapore cannot indulge in the following activities:
- Engaging in trade activities like import or export
- Leasing warehouses
- Leasing its office premises to third parties
- Entering into or negotiating business contracts, issuing invoices, receiving letters of credit on behalf of its foreign parent company
- Sourcing or identifying suppliers or sources of raw materials or industrial parts
- Offering consultancy services or systems implementation
- Engaging in promotional activities such as advertising or marketing
- Coordinating activities between the foreign parent company and the clients
- Liaising with or managing regional distributors or agents as well as related subsidiaries or branches
- Conducting quality control checks or carrying out supervisory activities
Prerequisites for Establishing an RO in Singapore
- The company’s turnover must be more than US$250,000
- The company must be established at least for 3 years before entering into Singapore to form an RO
- The staff strength in an RO must not be more than 5
- The name of RO must be the same as the parent company
- The parent company must own 100% of the RO
- The office must have one chief executive who should look after the operation of the RO
How to Establish an RO in Singapore?
The representative office registration is done by International Enterprise (IE) Singapore. Register with the same by filling up an application form which is easily available online on the official website of IE. The IE takes around 5 business days to approve the application. Once approved, they will send a Letter of Approval via email. The registration is valid for one year and is subject to a renewal annually. International Enterprise Singapore sends out a renewal notice two months prior to the expiry of the registration. It is mandatory for the renewal to be completed seven days before the expiration date. A representative office must upgrade to a Branch Office or a Subsidiary Company after a period of three years.
Documents Required to Establish an RO in Singapore
- Certificate of incorporation of the parent company
- A completed application form
- The latest annual reports and audited accounts of the parent company
- An endorsed undertaking which states that the representative office will abide by the terms and conditions governing the representative offices in Singapore
Note that all the documents must be in English or an official English translation of the documents must be submitted.
Renewal Procedure of an RO in Singapore
Since a representative office registration is valid for one year, there is an option to renew it annually to continue with the operations. The IE will send you a notice 2 months prior to the renewal deadline of a representative office. Just like the registration process, the RO must be renewed by submitting an application through IE’s website. Typically, audited financial statements are not required for renewals. However, IE may still require the parent company to submit the latest financial statements in order to renew a representative office. A representative office can operate for a maximum of 3 years in Singapore.
If you are looking for setting up a representative office in Singapore, then we at Business Setup Worldwide can help you with it. Contact us today for information related to the same.