The Requirements For Representative Office Singapore Setup
One outstanding way for foreign businesses to expand their business potential is by setting up a Representative Office (RO) in Singapore. Not only is Singapore an excellent territory to invest a business in but it is also a good central point within which to reach out to other countries in Asia.
What is a representative office? A Representative Office Singapore is primarily an administrative extension of a foreign company, known as the parent or head company, and thus it is not a separate incorporated entity. Its name should be the same as the name used by the parent company. As a consequence, a representative cannot engage in commercial revenue-generating activities, and therefore need not file corporate annual tax returns. Setting up a office in Singapore is considered to be a safe business scheme before making the decision to committing for a more permanent, long-term business in the country. This is because a representative is allowed only to exist up to three years with a mandatory renewal every year. Through this short period, an investor is given more opportunities to assess the business situation in Singapore before finally deciding to set up a more stable and fixed company. The foreign company is given more time to do market research, promote brand identity, and more opportunity to work with local companies and agents.
These are the basic features of a Singapore representative office:
- A representative office should bear the name of its parent foreign company unless it is being used by an existing business and is deemed indecent and vulgar by the authorities. If this is the case, ACRA will allow a foreign company to choose a different name for its Singapore representative office.|If this happens, ACRA will permit the foreign company to select a distinct name for its Singapore representative office.}
- The permit of this office is renewed annually, but after three years, it is no longer allowed to operate since ACRA believes that this period is enough for any foreign companies to determine the potential of their services or products in Singapore.
- Upon expiration of the office term, it is advised that foreign companies should be looking for other legitimate options such as branch office or subsidiary company to let their business stay in the city-state. Subsidiary company is a proper legitimate option because it is permitted to transact income-generating activities.
- Chief representative from the main office is the one who directed the Singapore representative office.
It is prohibited to conduct profit-generating and commercial activities.
The requirements needed in setting up a office differ on the type of business that its foreign company is engaged in. For setting up a representative for banking and insurance, you need to register with the Monetary Authority of Singapore (MAS). It is the MAS that lays down the requirements for the application for registration of a office. As for setting up a representative office for all other industries, applications for registration are to be made with the International Enterprise (IE) of Singapore, and the required documents are to be submitted to it, which lays down the guidelines to be complied with by the applicant.