Representative Office Registration
If your company is not ready yet to commit to Singapore fully, Singapore offers an option to set up a Representative Office in the country that can be used to used to perform marketing assessment. This helps the business assess the potential for its business, the overall business environment, the regulatory requirements, etc. without actually creating a new company in Singapore. But a Representative Office is allowed to perform a very limited set of activities and may not be a worthwhile investment.
According to Singapore’s corporate laws, a foreign company can establish itself in the country either in the form of a subsidiary company or a branch office. Most companies choose the subsidiary company route; however, a Representative Office in Singapore offers a third option which can be used to “assess the viability” of a foreign company’s business in the country.
Concept of Singapore Representative Office
A Representative Office (RO) is a temporary establishment that a foreign (i.e. parent) company registers in Singapore to assess its business potential in the country. The Representative Office does not have any independent legal status in Singapore such as that enjoyed by a subsidiary or local private companies.
A Representative Office is a good temporary option for companies that are not yet ready to establish a full-fledged office in Singapore. It avoids the complexity of having to register a company in Singapore and comply with ongoing filing requirements.
Scope of Activities
Singapore allows Representative Office in the country to conduct market research as well as feasibility studies. This includes the assessment of customer’s requirements, demand of a product, gathering information on compliance requirements for Singapore companies, etc.
However, International Enterprise (IE) Singapore, the statutory government agency responsible for registration of Representative Offices, prohibits these offices from carrying on other activities such as entering into business contracts, issuing invoices or receipts, opening and receiving letters of credit, providing any services for a fee, etc.
Registering the Office
Companies in the manufacturing, trading, trade, logistics, and services sector can register a Representative Office with IE Singapore. Other sectors such as banking, insurance, and finance can also set up representative offices in Singapore. However, they come under the scope of the Monetary Authority of Singapore (MAS) and have to be registered in accordance with the guidelines set out by the MAS.
Following are the conditions and requirements for registering a Representative Office in Singapore:
IS YOUR COMPANY ELIGIBLE ?
A foreign company can set up a Representative Office in Singapore if it fulfils the following qualifying conditions:
- The sales turnover of the foreign company must be at least US$ 250,000;
- The foreign company must be established for a minimum period of 3 years;
- The proposed number of staff for the Representative Office should not exceed 5.
A Representative Office in Singapore must comply with all the Terms and Conditions set out by IE Singapore. If the Representative Office does not abide by these terms, IE Singapore can de-register it.
The following documents must be submitted with the application:
- Certificate of Incorporation of the foreign company, and
- The latest audited accounts of the foreign company.
The application of the Representative Office must be submitted online on the IE Singapore website. In the case of renewal of application, the documents and information must be updated.
TIME AND COST TO REGISTER THE OFFICE
After submission of the application and the required documents, it takes around 5 working days for approval by IE Singapore.
The processing fee for a fresh application or for renewal of an application is $S200. IE Singapore accepts payments made either by cheque, bank draft or credit card. IE Singapore does not accept cash payments.
RENEWAL OF THE REGISTRATION
On approval, the registration of the Representative Office is valid only for one year and has to be renewed annually. You can renew the office for a maximum period of 3 years. IE Singapore sends the Representative Office a renewal notice 2 months prior to the expiry. After renewing the registration yearly for a continuous period of 3 years, the foreign company can either incorporate a subsidiary or branch office in Singapore to expand its business. It cannot continue to have the Representative Office after 3 years.
Other Key Requirements
If you are planning to register a Representative Office in Singapore you must keep in mind certain requirements. These are:
- The name of the office must either be the same or similar to the foreign company. The office has to state that it is a “Representative Office Registered in Singapore” on its letterheads, name cards etc.
- The office must appoint a staff member from the foreign company or a Singapore resident employee of the foreign parent company who will act as a representative of the parent company and execute operations in the Singapore office.
- In the case of a change in the name of the foreign parent company, the Representative Office must inform IE Singapore within 1 month with a copy of the parent company’s change in name certificate. The Representative Office has to inform IE Singapore in the case of change in address, telephone or fax numbers.
A foreign company can establish a Representative Offices in Singapore to assess the viability of its business in the country. Once the company understands the scope of its business in Singapore it can set up a permanent establishment in Singapore either in the form of a branch office or a subsidiary company.
Due to the limited activities that a Representative Office can perform, it is not a recommended structure. But if you feel that this is correct structure for your situation, you should the assistance of a corporate services provider to help set it up. The corporate services provider can help in all stages of registration starting from initial document preparation to approval.