singbusiness

How to set up a Representative Office

Representative Office

General Characteristics
Registration
Representatives
Compliance

 

General Characteristics

A representative office (RO) is usually set up when a foreign company wishes to establish a presence in Singapore, but does not (yet) intend to actually carry on any business there. A RO has no legal status, but is merely an administrative arrangement and primarily designed for non-commercial activities. Legally , a RO is not a business entity per see and not allowed to perform any activity with the purpose to generate profits.

Permitted Activities

  • conducting market research
  • conduct feasibility studies
  • supervise the activities of its main headquarter’s local agents and distributors
  • act as a liaison office during a negotiation deal
  • provide customer support

Prohibited Activities

  • enter in to a business contract
  • provide repair and technical services
  • ship or store goods in Singapore without a designated local distributor or agent
  • lease warehousing facilities lease or office(s) to other establishments for a fee
  • issue invoices/receipts
  • open/receive letters of credit

 

Registration

Application before the International Enterprise (IE) is mandatory through a professional business registration firm. To set up an RO in banking and insurance, you need to register with the Monetary Authority of Singapore (MAS). As the RO is not permitted to operate beyond maximum three years as it is regarded of temporary nature, it can be delisted any time and replaced by a branch office or subsidiary company.

  • a duly certified copy of the certificate of the foreign parent company’s certificate of incorporation in English or an official English translation
  • foreign parent company’s latest annual report and audited account
  • duly endorsed undertaking to abide by the Terms and Conditions governing the representative offices in Singapore
  • For processing fee see here

When the parent company is relatively new and there are no annual report and audited accounts , you can self-declare the needed information and provide other supporting details such as company brochures, contracts, website, etc. in support of your application.

The authorities will issue a Letter of Approval confirming the registration of the representative office.

If the parent company becomes dormant, the representative office must be de-registered.

Representatives

A representative office may engage local employees as support staff but must appoint and relocate to Singapore a chief representative staff member from the head office to oversee the RO's activities.

The Representative must hold himself out as the ‘Representative’ of the foreign company, and not its ‘manager’, ‘sales representative’ or use any other designation which would connote that the foreign company is carrying on business in Singapore.

Compliance

None of the corporate filing requirements imposed on incorporated companies or branches of a foreign corporation must be complied with.

A representative office must clearly state that it is a representative office registered in Singapore on its name plaque, name cards of its staff and other communication materials such as stationary of publications, iIn all listings in directories (e.g. the telephone directory) and in any signboards or notices outside the premises of the representative office.

The words ‘Representative Office’, ‘Regional Representative Office’ or such other suitable description as the foreign company may determine should appear to clearly indicate the nature of the office.

A representative office enjoys special income tax treatment and the tax authorities do not normally seek to tax a representative office. This practice is based on the theory that the RO carries on no business and hence has no profits here to tax.