Foreign companies looking to explore opportunities in Singapore or around the region may consider the option of setting up a Representative Office (RO). Find out the scope of business activities, registration criteria and process of setting up a RO.
A foreign company interested in exploring potential opportunities in Singapore and the region, may consider setting up a representative office before committing to any forms of investments that comes with setting up a subsidiary or branch office.
Unlike a subsidiary or a branch office, a Singapore representative office is viewed as a liaison office and as such has no legal status. It cannot conduct any business activities of profit yielding nature. Finance and related industries are not liberalised sector and consequently the approval process for representative office of such organisations can be quite elaborate. For most other sectors, representative office approval process is a straightforward process, assuming the foreign company is an established entity and the scope of planned activities falls within the scope of a representative office.
This guide will provide details on setting up a representative office in Singapore. To learn about the different registration options available to foreign companies, refer to the foreign company registration options in Singapore guide.
Singapore Representative Office as a Business Entity
A Singapore representative office has no legal status and it is merely an extension of the foreign company. It must not conduct any business activities of profit yielding nature. Since it lacks a legal status, a representative office is prohibited from concluding contracts, negotiating or opening Letter of Credit, getting involved in trading, leasing a warehouse, etc. It can only engage in activities such as conducting market research and feasibility studies.
In a nutshell, a representative office is a temporary administrative office that is set up to manage and coordinate non commercial activities of a foreign company.
Key Facts about Singapore Representative Office
- A representative office can engage in the following type of market research or feasibility studies:
- Gather information about markets and clients
- Carry out research to ascertain information regarding product demand, price expectation and end user requirements
- Collect information regarding the procedure of setting up a permanent business entity in Singapore
- Build trade contacts and handle product inquiries
- Participate in trade shows and exhibitions
- A representative office is not a separate entity from the parent company and the parent company is implicitly responsible for all liabilities of the representative office.
- Name of the Singapore representative office shall be the same as that of the parent company. In case where the name coincides with an already existing local company, authorities will make a decision on case by case basis.
- Representative office is of a temporary nature and can only operate in Singapore for a maximum of three years from its commencement date. After the three-year period, if the parent company wishes to continue its operations in Singapore, it must register as a subsidiary company or a branch office. The representative office will need to be renewed annually during the three-year period.
- A representative office may engage a small number of local employees as support staff but must appoint a chief representative staff member from the head office who will relocate to Singapore and oversee its activities. Since a representative office cannot be involved in commercial activities, the staff strength should be reasonable and kept to the essential minimum. The authorities have stipulated that a representative office can hire only up-to a maximum of five employees.
- Any change(s) to the representative office (such as a change in representatives, change in address, registered activities, etc.) must be notified to authorities in advance i.e. at least one month prior to the change taking effect. In case of changes in the name of the parent company, notification must be accompanied by a copy of the name's Certificate of Change from the parent company.
- 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.
- Information regarding the parent company’s activities and contact details of the representative office in Singapore can be made public at the discretion of authorities.
- Representative office in Singapore is not an incorporated body and therefore, none of the filing requirements imposed on the incorporated entities or registered corporate bodies are applicable to it. A representative office need not maintain any statutory documents or submit tax returns in Singapore.
- A Singapore representative office is allowed to obtain a central registration number to import and export sample products and materials from the parent company. However, a representative office is strictly prohibited from involving in trading activities using the central registration number.
- In case the parent company becomes dormant, the representative office must also de-register.
- A dormant representative office or a representative office that fails to comply with the terms and conditions stipulated by the authorities will be de-registered.
- A representative office in Singapore is not allowed to conduct the following activities:
- Engaging in trade i.e. import or export
- Leasing warehouses
- Leasing its office premises to third parties
- Entering into or negotiating business contracts, issuing invoices, receiving letters of credit on behalf of its foreign parent company
- Sourcing or identifying suppliers or sources of raw materials or industrial parts
- Offering consultancy services or systems implementation
- Engaging in promotional activities such as advertising or marketing
- Coordinating activities between the foreign parent company and the clients
- Liaising with or managing regional distributors or agents as well as related subsidiaries or branches
- Conducting quality control checks or carrying out supervisory activities
Procedure and Documents Required for Representative Office Registration
In order to register a Singapore representative office, all new applications of the foreign commercial entity must satisfy the following criteria:
- The foreign parent company must have a sales turnover in excess of more than US$250,000
- The foreign parent company must be established for three years or more
- The proposed number of employees for the Singapore representative office must be five or below
The following documents are required when registering a representative office in Singapore:
- Completed application
- Copy of the parent Company’s Certificate of Incorporation or Registration Certificate, as the case may be
- Copy of the parent company’s latest annual report and audited accounts
- Duly endorsed undertaking to abide by the Terms and Conditions governing representative offices in Singapore
All documents must be in English, otherwise an official English translation of the documents must be submitted.
If your intended activities are within the scope of allowed activities and the authorities are satisfied with the documents submitted, there should not be any issues in getting your application approved. In certain cases, authorities may ask for additional information to get further clarifications pertaining to your application.
Normally, the foreign company interested in setting up a representative office in Singapore will engage a local professional corporate services firm for assistance. A professional firm will:
- assist with completing the application as per guidelines and requirements of the approving authorities
- file the necessary registration paperwork with authorities
- act as a contact point if any clarifications are needed by authorities
- upon approval of the representative office registration, file employment pass application for the staff member (from the head office) who will be relocating to Singapore
Approval and Renewal Information for Singapore Representative Office
Once approved, registration of a Singapore representative office is valid for a period of 1 year after which it must be renewed. The authorities will issue a Letter of Approval confirming the registration of the representative office.
Normally, two months before the expiry, authorities will send a renewal notice. The representative office must be renewed seven days before the expiry date. Since a representative office is a temporary arrangement, it can only be renewed for a maximum of three years. The parent company is advised to upgrade the representative office to a subsidiary or a branch office after the three-year period.
In the event that no response from the representative office, a reminder notice will be sent on the expiry date. If there is still no response, a final reminder will be sent to the Head Office one month after the expiry, providing 14 days for the Head Office to act, failing which, authorities will initiate the de-registering process of the Singapore representative office.
Bank Account Opening
Upon successful registration, a Singapore representative office can open a bank account in any of the several international and local banks in Singapore. The account opening procedure can vary across banks. The timeline for opening a bank account, upon submitting all the required documents, can vary between 2-10 working days.
Typical documents required by banks include:
- Completed and Signed Account Opening Application Form
- Photocopy of Letter of Approval from International Enterprise Singapore
- Board of Director’s Resolution sanctioning the opening of the account and the signatories to the account
- Photocopy of Certificate of Incorporation of Parent Company
- Photocopy of Memorandum & Articles of Association of Parent Company
- Photocopy of Register of Directors (or equivalent)
- Proof of Beneficial Ownership such as photocopy of Register of Shareholders or Certificate of Incumbency or Declaration of Beneficial Ownership along with IC/passport of the Beneficial owner
- Identification card/Passport copy of directors, authorized signatories and chief representatives
For more details on opening a bank account, refer to the opening a bank account in Singapore guide.
A Singapore representative office is a unique type of entity that does not have a legal status and does not generate any revenue but acts as a cost center to the parent company. A representative office is the best choice for foreign companies who are keen to explore opportunities in and around Singapore. Once the foreign company are satisifed with the market research, they may op to consider reigistering a subsidary or branch office to conduct business activites, more can be found here.
For additional information, refer to Singapore Representative Office FAQs.