How to open a representative office in Singapore (Beginner guide)

Opening a representative office in Singapore is a smart way for foreign businesses to explore the market. It allows companies to study opportunities without making a big financial commitment. 

This article by GLA provides a step-by-step guide. You'll learn what a representative office is, its benefits and limitations, and the requirements to set one up. We’ll also cover the registration process and key things to keep in mind. <p> Ready to expand into Singapore? Let’s get started! </p>

1. What is a Singapore representative office?

Under Singapore law, a Representative Office (RO) is a type of commercial presence that foreign companies can set up in Singapore.

Unlike other types of companies in Singapore, Representative Offices (ROs) <strong>cannot engage in profit-making activities.</strong>. Specifically, they can not <ul><li>Sign contracts or receive payments.</li> <li>Provide services for profit.</li> <li>conduct financial transactions</li></ul> ROs are strictly for market research and business liaison purposes. They serve as a temporary setup to explore opportunities without direct commercial involvement.

In adiition, a Representative Office (RO) is an extension of its parent company abroad. Since it has no separate legal status, the parent company holds 1% responsibility for all its activities, liabilities, and obligations in Singapore.

2. What activities can representative offices do in Singapore?

Under the Singapore Companies Act, a representative office is not allowed to engage in profit-making activities in Singapore. 

A Representative Office (RO) can only engage in activities funded by its parent company. It is strictly limited to non-commercial functions. Permitted activities include:

1. Participate in trade fairs, exhibitions, and showcasing products.
2. Conduct market research on potential products and services.
3. Build relationships with potential business partners.
4. Handle and responding to customer inquiries about products and services.

3. Why so many businesses choose to incorporate a representative office in Singapore?

Expanding your business internationally is an important step for growth. However, managing costs, operations, and finding the right market can be challenging.

To reduce risks, many businesses start by setting up a Representative Office (RO) in Singapore. This offers several advantages:

3.1. Market access

Singapore is a key trade gateway in Southeast Asia. It connects businesses to regional and global markets. Setting up a Representative Office (RO) allows foreign companies to explore opportunities with minimal risk. With an RO, businesses can: <ul> <li>Research the Singaporean market and surrounding regions.</li> <li>Connect with potential customers and partners.</li> <li>Participate in trade fairs, exhibitions, and business meetings. </li> </ul> This is a strategic way to understand the market before making a bigger investment.

3.2. Low invesment

Forming a Representative Office is much cheaper than incorporating a full company in Singapore It’s an ideal option for businesses that want to explore the market first, without committing to a large investment. This allows companies to test the waters and decide whether to invest long-term.

3.3. Business-friendly policies for ROs

The Singapore government offers a supportive environment for foreign businesses. It provides: <ul><li>A transparent and stable legal framework.</li> <li>An efficient electronic administrative system that makes the office opening process quick and easy.</li> </ul> This makes Singapore an attractive destination for companies looking to expand internationally. 

4. How to open a representative office in Singapore without a headache?

4.1. Requirements for the parent company

Foreign companies wishing to set up a representative office in Singapore must meet these requirements:

• The parent company must have been operating for at least 3 years.
• The parent company must generate a minimum annual revenue of SGD $250,000 per year
• The representative office can only have a maximum of 4 employees, including both foreign and local staff. The office must have one manager to oversee its operations.

If the parent company meets these conditions, it can proceed with preparing the necessary documents to register the office in Singapore.

4.2. Requirements to open a representative office 

To open a representative office, the ROs must meet these requirements:

• The office name is the same as the parent company name.
• A representative office address in Singapore. Global Links Asia can assist with registering the office address in Singapore.

5. Easy XNUMX-step process for incorporating a representative office in Singapore

5.1. Documents to prepare 

Required documents include:

• Application for opening an office.
• Copy of parent company's certificate of incorporation.
• Copy of the parent company's latest annual report and audit report.
• Additional documents such as brochures, website contracts.
• All documents must be in English and must be certified according to Singapore's government regulations. Certification should be done by an authorized authority, such as a notary office.

5.2. Registration process

6. What to do after your company has opened your ROs in Singapore

6.1. Period of operation and renewal

A Representative Office (RO) in Singapore can only operate for a maximum of 3 years and it must review its lisence for further operations.

After 3 years, the ROs must convert to another type of business structure such as a branch office. Private Limited Company (Pte. Ltd.), Partnership to continue operating.

6.2. Tax and legal issues

Even though representative offices are not separate legal entities and do not have to file taxes or submit annual financial statements in Singapore. 

your businesses must still comply with local labor laws and provide insurance for employees working at the representative office.

6.3. Compliance with information presentation

On all communication materials, the representative office must clearly state: "Registered Representative Office in Singapore"

Additionally, the representative office must notify Enterprise Singapore (IE) within 1 month about any changes to: office address and telephone or fax number.

The office must also inform IE within 1 month if it closes its operations or converts into a branch or subsidiary.

7. How can we help you register your representative office in Singapore?

GLA is proud to be a trusted partner, offering professional consulting services to hundreds of foreign businesses wishing to establish representative offices in Singapore. We can help you:

• Advise on what you need and how to open a ROs in Singapore legally, quickly, at a reasonable price
• Prepare and submit application documents.
• Prepare and apply for work permit for your foreigner employee to work in Singapore.
• Support with human resource management, website design, and tax and legal consulting.

With extensive experience and a team of skilled experts, we ensure you receive the best service to help your businesses quickly expand into Singapore.

8. FAQs about representative offices in Singapore

Highlights

• Representative offices in Singapore can only do market research and brand promotion activities. They must not engage in profit-making activities.
• To open a representative office, the parent company must have been operating for at least 3 years, have a minimum revenue of 250,000 USD/year, and a maximum of 4 employees.
• The registration process is simple. You can submit the application form to Enterprise Singapore and ACRA. Usually, the entire process takes 1-2 weeks for approval.
• A representative office can operate for a maximum of 3 years. After this period, the business must consider converting it into a Private Limited Company (Pte. Ltd.) to continue operations.