Singapore Representative Office Is A Wise Protection For Foreign Businesses

By Author: Diane Paz
Total Articles: 172
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It is wise to perform a series of studies and market research on the feasibility of the business before pouring out huge investments especially those whose market are deemed risky but promising.

With this, some foreign companies in Singapore have registered a representative office which is designed to perform non-commercial activities that aim to determine the profitability and viability of their products and services.

If a particular business proves to be feasible then it would be safe for an investor to engage in a full-blown business activity and spend considerable amount in investments.

As stated in the Singapore law, a representative office is not a legal business entity but rather an arrangement which is administrative in nature and should therefore be non-commercial and profit-generating.

According to the Accounting and Corporate Regulatory Authority (ACRA), these are the only activities a representative office can engage to: establish business contacts, oversee its parent company's local distributors and agents, conduct extensive market research, and perform liaison services without entering ...
... in to a legal contract.

On the other hand, a Singapore representative office is not allowed to engage in activities that generate profit like leasing warehouse facilities, leasing office to different organizations, entering in to any agreements and contracts, and undertaking activities that are commercial in nature.

Meanwhile, these are the basic information about a representative office:

1. The registration of the representative office by a foreign company should be on an annual basis for a period of three years. After three years, the company can no longer be registered as a representative office. Therefore, in order for the company to continue its operation in the country it must be registered on a different arrangement such as a subsidiary company or a branch office.

2. A representative office should bear the same name as the parent company unless otherwise the name has been used by another company in Singapore or are deemed as indecent and vulgar by Singapore authorities.

3. As a legal requirement, a chief representative officer from the main headquarter should be appointed and act as a head in the office.

4. A parent company is legally liable for the acts and losses of its Singapore representative office.

5. There is a limited number of foreign and local workers that is authorized to be employed in a representative office. In addition, the said workers are prohibited to engage in activities that are commercial in nature.

6. Because a representative office is not an incorporated company, it is not a requirement to perform corporate legalities and formalities such as submitting the tax returns, maintaining statutory documents, and conducting general meeting.

7. It is required that this office should inform other business organizations by means of communications materials, name cards of the staff and name plaque.

AsiaBizSetup is a leading corporate services firm that assists entrepreneurs and investors start a Singapore company with setting up a Singapore representative office and other corporate services. The firm provides a range of services to assist the success of the Singapore offshore company, including opening Singapore corporate bank accounts.