Singapore ranks first in the world as the city with the highest potential for investments. It outranks the world as the most enterprise-friendly and easiest place to conduct business. Singapore boasts of having the best business environment not only in Asia Pacific but also in the world. These are just some of the attributes and recognition that make Singapore an ideal location for businesses.
Many entrepreneurs opt to test the waters and assess the feasibility of setting up a company in Singapore before committing to investments. In this case, putting up a Representative Office may be a sound option. By definition, a Representative Office is a temporary arrangement provided to foreign businesses in order to evaluate and study Singapore’s business environment. It is ideal for foreign entities who are seeking to explore the local market, manage non-income generating business operations, or utilize Singapore as a launch pad and gateway to tapping market opportunities in Asia Pacific.
Applications for a Representative Office are coursed through International Enterprise (IE) Singapore. The registration process is relatively straightforward. The requirements are as follows:
√ A minimum non-refundable S$200 processing fee is applicable.
√ Foreign entities must provide a softcopy of its Certificate of Incorporation or Registration Certificate, whichever is applicable. The documents must be either in English or an official English translation.
√ A softcopy of the latest Audited Account of the foreign company must be attached in the application.
√ The Representative Office is required to agree and comply with the terms and conditions of IE Singapore. Failure to comply with stipulated terms and conditions may result to de-registration of a Representative Office.
Additional requirements that Representative Office must satisfy the following:
√ The foreign entity must have a sales turnover of more than US$250,000.
√ The foreign entity must have been established for at least three (3) years.
√ The Representative Office must have less than five (5) employees
A Representative Office is strictly mandated to limit its activities to market research and business feasibility studies. It is strictly prohibited to conduct any form of income yielding activities such as engaging in trade, entering into business contracts, negotiating sales, and the like. IE Singapore has provided a list of permissible business activities that a Representative Office may execute while in Singapore:
√ Gather information on regulatory requirements that are related to putting up a permanent entity in Singapore.
√ Conduct research on Singapore’s market, the business’ competitors, and on potential customers.
√ Collect information on product or service demand, price expectation and needs of potential customers.
√ Manage enquiries about the product.
√ Develop trade contracts.
√ Take part in trade shows or exhibitions.
The government believes that three years is an adequate amount of time for businesses to decide if Singapore is a suitable location for its operations. Hence, a foreign commercial entity’s Representative Office may operate in Singapore for a maximum of three years upon its commencement, given that its status is evaluated and renewed by IE Singapore on an annual basis.
Starting a business in Singapore provides companies with a wide range of commercial opportunities. In the event that a Representative Office decides to extend its stay longer than the required time period, it will be obligated to register at the Accounting & Corporate Regulatory Authority (ACRA).
Engaging a professional service provider for the registration or incorporation of your business allows for a smoother and more efficient process. Our Singapore incorporation specialists can help you establish your business in the city-state. Check out the scope of our Singapore Incorporation Packages tailored to suit your needs