Often called a Rep Office, a Representative Office is a non-profit organisation that international businesses set up in Singapore to carry out market research, advertising, and communication.
By taking this calculated risk, foreign companies can investigate the regional market and make a name for themselves without having to engage in revenue-generating operations.
Purpose of a Representative Office
In Singapore, representative offices are considered as part of the parent corporation and not as distinct legal entities. Unless it is already in use in Singapore, the Rep Office's legal name is the same as the name of the parent firm. These type of companies are not allowed to conduct transactions, direct sales, or any other activity that generates profit. They provide a venue for international businesses to:
- Carry out market research and compile data regarding the local business environment.
- Boost the use of the parent company's goods, services, and name.
- Promote coordination and communication with regional clients, partners, and governmental organisations.
- Create connections and look into possible business ventures.
In order to carry out operations in Singapore, a local representative or sponsor is needed to help with the registration of the Rep Office and communicate with Singaporean authorities. This agent may be selected from the local market or transferred from the parent company.
Representative Offices are free from filing, accounting, and other regulatory obligations, including keeping statutory records, because they are not incorporated corporations. Since these offices don't make money, they are exempt from having to file tax returns with the Singapore Inland Revenue Authority (IRAS). They must, however, submit an application to the IRAS for a Business Registration Certificate.
Registration and Setup Process
Foreign companies may set up a Representative Office in Singapore as long as they fulfil the requirements listed below:
- The overseas business must generate at least US$250,000 in sales annually.
- The overseas business needs to have been operational for at least three years.
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The Representative Office's proposed staff size shouldn't be more than five people.
A Representative Office in Singapore has to operate by the Terms and Conditions provided by IE Singapore. IE Singapore has the right to de-register the Representative Office if certain conditions are not met.
The application process involves the submission of the following documents:
- Certificate of Incorporation of the foreign company.
- The most recent audited accounts of the foreign company.
- Completion of the designated application form.
- Identification proof for the chief officer of the Representative Office in Singapore.
Upon a successful application, the Business Registration Certificate will be issued, and renewal should be initiated one month before its expiration, whether annually or every three years, depending on the validity period.
Conclusion
International enterprises can study the local market, promote their brand, and establish vital relationships by establishing a Representative Office in Singapore. Although Rep Offices do not engage in profit-generating activities, they are a useful first step for international businesses looking to comprehend and interact with Singapore's dynamic business environment.
If you are planning to set up a Rep Office, consult with our professionals who specialize in company registration and compliance to ensure a smooth and successful establishment process.