How to set up a Representative Office (RO) in Singapore

A Representative Office (RO) is an ideal vehicle for assessing business opportunities in Singapore before making any long-term or large-scale commitment. It serves as a strategic entry point, particularly for those looking to enter Singapore's competitive business landscape. However, it's crucial to note that an RO is subject to restrictions and cannot engage in revenue-generating activities such as trading, contract conclusion, fee-based services, invoicing, or opening Letters of Credit. This option is especially appealing to foreign entities in sectors such as manufacturing, international trade, wholesale, and trade-related businesses, as they explore the potential of doing business in Singapore or use it as a stepping stone into the Asia Pacific region.

Key Benefits of Establishing a Representative Office in Singapore

• Market Assessment: An RO acts as a reconnaissance tool for foreign companies, allowing them to assess demand for their products or services, understand local consumer behavior, and evaluate the competitive landscape. This information is essential for making informed business decisions.
• Risk Mitigation: By setting up an RO, companies can minimize risks associated with entering a new market. They can study local regulations, industry dynamics, and potential challenges without making significant financial or operational commitments.
• Networking and Relationship Building: An RO facilitates networking and relationship building with local businesses, government agencies, and potential partners, laying a strong foundation for future business endeavors.
• Brand Presence: While an RO cannot engage in revenue-generating activities, it provides a physical presence in Singapore, enhancing brand recognition and credibility. This presence can also support marketing and public relations efforts.
• Gateway to Asia: Singapore is often seen as a strategic gateway to the broader Asia Pacific region. Many foreign businesses use their Singapore-based ROs as a launch pad for expansion into neighboring markets, benefiting from Singapore's well-developed infrastructure and connectivity.
• Tax and Administrative Simplification: Operating an RO offers simplified administrative and tax requirements. As an RO does not have its own legal entity, it is exempt from many tax obligations and regulatory filings that other business entities must comply with, making it a cost-effective option for market exploration.

Requirements for Establishing a Representative Office

Conditions:

• The foreign company must have a minimum sales turnover of at least US$ 250,000.
• The foreign company (Parent Company) must have been established for a minimum of 3 years.
• The number of staff in the Representative Office should not exceed 5.

Documents Required:

• A complete application form (to be submitted to Enterprise Singapore for approval).
• A copy of the Certificate of Incorporation of the foreign entity.
• A copy of the latest Audited Accounts of the foreign entity.
• An endorsed and signed statement confirming adherence to the Terms and Conditions governing representative offices in Singapore.

Additional Requirements:

• The RO should be registered in the name of the Parent entity.
• The RO should include "Representative Office Registered in Singapore" on its letterheads, name cards, etc.
• The office must appoint a staff member from the foreign company or a Singapore resident employee of the foreign parent company to act as a representative and carry out operations.
• Any changes in the representative office, including address or registration activities, must be communicated in advance to the authorities.
• If the parent company relocates, the RO must be deregistered.
• A representative office has a maximum temporary duration of three years from the commencement date.

Documentation and Tax Exemption:

Since an RO does not have its own legal entity, it is exempt from taxes, statutory filings, and annual reporting requirements.

Timeline:

Setting up the RO typically takes 5 to 7 working days from the successful submission of the application.

Water and Shark's Assistance

Water and Shark (W&S) can provide comprehensive support for establishing an RO in Singapore. Their services include application processing, documentation, approval, and incorporation. As a one-stop solution, W&S also offers banking-related support services and other ancillary solutions to fulfill your business requirements.