A representative office is a temporary facility that allows foreign companies to assess the viability of doing business in Singapore. Such an office can be created before setting up a permanent establishment in the country. A representative office has no legal status and cannot conduct any commercial activity. Therefore, foreign companies will typically use a representative office as a stepping stone to enter Singapore prior to establishing a branch office or a subsidiary company. This article provides information about setting up a representative office in Singapore and covers the following topics:
- Key Facts
- Permitted Activities
- Registration Requirements
- Registration Procedure
- Compliance Requirements
- Renewal Procedure
- Converting to Subsidiary Company
- A foreign company can establish a representative office in Singapore for a maximum of 3 years. Furthermore, during the 3-year period, the representative office must be renewed each year.
- A representative office has no legal status and is not considered a separate legal entity. Therefore, the parent company is responsible for all liabilities of the representative office.
- A representative office cannot engage in any type of commercial activity. Rather, a representative office is used to conduct market research and assess the feasibility of establishing a permanent presence in Singapore.
- With no legal status, a representative office is not obligated to file annual returns with the Accounting and Corporate Regulatory Authority (ACRA) or annual tax returns with the Inland Revenue Authority of Singapore (IRAS).
- A representative office can be converted to an incorporated entity by registering a branch office or a subsidiary company with ACRA.
With the purpose of conducting market research and feasibility studies on the viability of establishing a permanent business in Singapore, a representative office is permitted to conduct the following activities:
- Gather information on competitors and customers
- Conduct market research on product demand, customer requirements and price expectations
- Collect information on setting up a permanent business entity in Singapore
- Build trade contacts and answer product inquiries
- Participate in trade shows and exhibitions
In particular, a representative office is not allowed to engage in the following activities:
- Engage in trade or business activities
- Enter into business contracts or negotiate sales
- Issue invoices or receipts
- Open and receive letters of credit
- Lease property
- Engage in promotional activities or provide marketing services
- Source, procure or identify suppliers of raw materials or components
- Act as the parent company’s liaison with distributors or agents
- Coordinate orders or other business activities between the parent company and its customers
- Conduct quality control checks or provide technical supervision
To register a representative office, the foreign parent company must meet the following requirements:
- The foreign parent company must generate a minimum of US$250,000 in revenue
- The foreign parent company must have been in operation for at least 3 years
- The representative office can have a maximum of 5 staff members, including an appointed representative of the foreign parent company.
Furthermore, all new applications for a representative office must include the following documents:
- A copy of the parent company’s certificate of incorporation or business registration certificate
- A copy of the parent company’s latest audited financial statements
Note that all documents must be in English or officially translated into English.
In general, foreign companies register a representative office with International Enterprise (IE) Singapore.
The registration process is completed online.
Once the application has been submitted, the foreign company must pay the S$200 registration fee. Typically, IE will process the application within 5 business days.
Once approved, IE will send a Letter of Approval confirming the registration.
It is common for foreign companies to engage the services of a corporate service provider. Such a provider can help navigate the registration from initial document preparation to final approval; the service provider can also help with the ongoing compliance obligations for the representative office.
In order to remain compliant, a representative office must adhere to the following regulations:
- The name of the representative office must match the parent company. If the parent company’s name changes, the representative office must notify IE and provide a certificate of change in name within 1 month of the name change.
- On all communication materials, a representative office must clearly print, “Representative Office Registered in Singapore”.
- A representative office must notify IE within 1 month of any change in the office address, phone number or fax number.
- A representative office must notify IE within 1 month of closing operations or after converting to a branch office or subsidiary company.
Note, since it has no legal status, a representative office is not required to file annual financial statements with ACRA or annual tax returns IRAS.
Once approved, a representative office is valid for 1 year and must be renewed annually to continue operations. Typically, IE will send a renewal notice 2 months prior to the renewal deadline of a representative office. Furthermore, the representative office must be renewed within 7 days of the renewal deadline.
Similar to the initial registration, the RO must renew 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 in Singapore for a maximum of 3 years. To continue operations after the 3 year period, the representative office must be converted into a branch office or a subsidiary company.
Converting to Local Company
A representative office can be converted into an incorporated entity in Singapore, by registering a branch office or a subsidiary company with the Accounting and Corporate Regulatory Authority of Singapore (ACRA).
In order to register a branch office or subsidiary company, Singapore requires foreign companies to engage the services of a registered filing agent, such as a corporate service provider. A corporate service provider will help collect and prepare all necessary documents and complete the filing procedure with ACRA.