Due to the ease of business in Singapore, opening an extensive company in the country might come as an appealing challenge and opportunity for some foreign businesses. One of the types of business entity a non-Singaporean company can establish in Singapore is a representative office. A representative office in Singapore is usually set up by foreign companies who wish to establish a presence in the country but is not yet going to be operational. A representative office in Singapore has no actual legal status. Thus, this form of business is not allowed to be operational for profit-oriented activities before actually launching a profitable activity.
However, conducting market research and feasibility studies, supervising main head quarter’s local agents and distributor’s activities, acting as a liaison office in negotiation deals, and providing customer support are a few activities that are permitted for a representative office in Singapore. As for activities that are prohibited, a representative office may not sign on a business contract, provide services such as repair and technical, ship and store goods without a local distributor in Singapore, issue invoices or receipts, and open also receive letters of credit.
A representative office before your Singapore company registration is considered one entity with the parent company. That means the parent company is responsible for the representative office’s liabilities and debts. Because it is not a separate entity, the representative office’s name must also be the same as the parent company and is unique in the Singapore market. The maximum operational time a representative can operate in Singapore is three years from the commencement date. Once it has surpassed three years time, the company must set the representative office as a subsidiary company or branch office and have the company registered for business activities in Singapore instead of getting it renewed as a representative office like the years prior. If not, the Singapore authority will de-register the Singapore representative office.
A representative office will have to be registered. The help of a professional firm for this process is advised. In order to register your company as a Singapore representative office, there are criteria to be fulfilled along with necessary documents to be provided. The foreign company of the representative office must have a sales turnover larger than US$250,000 and it has been established for more than three years. Staff to be employed in the representative office must not exceed five people. The company then needs to complete the application and attach a copy of the Company’s Certificate of Incorporation or Registration Certificate and the latest annual report and audited accounts of the parent company. The submitted documents must be translated into English.
Once successfully registered via on your own or via agency such as A1 Business, a representative office in Singapore can open up a bank for its business. In Singapore itself, there are various local banks to choose from. However, the office is free to choose to open up an international bank if desired. If all required documents by the respective bank are provided, the procedure may take up from two to ten working days.