Importance Of Opening A Singapore Representative Office

By Author: Ray Noels
Total Articles: 1
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Exploring the business potential of a market before making huge investments is in most cases a good option. It is especially true to foreign companies that is deemed as high risk but is otherwise profitable in the long run. As recommended by most professionals, the Singapore representative office is the perfect place to establish businesses as one tries to avoid great losses.

So Why Open a Singapore Representative Office?

A Singapore representative office is also allowed to act as a liaison office of its parent company from abroad, particularly during the negotiation deals. It also performs extensive market research and feasibility study. However, this office is not allowed to enter in to any business contract since it is prohibited to conduct activities which are "commercial" in nature.

According to the Accounting and Corporate Regulatory Authority (ACRA), a representative office is not treated as a legal business entity but merely an administrative arrangement that is only allowed to conduct the following activities: oversee the activities of its parent company's local distributors and agents; establish ...
... business contacts for its main office; provide customer care service except those which involve repair and technical services; and conduct market research. On the other hand, these are the activities a Singapore representative office is not allowed to perform: lease warehouse facilities; provide services or products for fees and other profit-generating undertakings; enter in to legal contracts and agreements; and store and ship goods in Singapore.Since the foreign company's representative office is prohibited from storing and shipping goods to Singapore, they should request local agents to do such activities in their behalf.

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.

Resource Box:

Rikvin is the leading Singapore Company Solutions Specialists. It has successfully helped thousands of foreign entrepreneurs form a Singapore Representative Office. Our office is located at Raffles Place, in the heart of the Singapore business district. ("CBD") If you're in our neighborhood and want to discuss any aspect of our service then feel free to come in to our offices during business hours.