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Understanding the Process of Setting Up a Representative Office in Singapore
26/05/2023
With its strategic location and business-friendly policies, Singapore has become one of the most attractive destinations for foreign investment. Many entrepreneurs and businesses have set their sights on Singapore to explore new opportunities. If you are one of those entrepreneurs considering expanding your business in Singapore, setting up a representative office may be a suitable option.
In this article, we will guide you through setting up a representative office in Singapore. We will cover the requirements, the registration process, and the benefits of setting up a representative office.
What is a Representative Office?
An overseas company looking to explore business opportunities in Singapore may consider setting up a Representative Office to test the market and determine the viability of establishing a business in the region. However, certain restrictions and guidelines must be followed. For example, a Representative Office can only be set up for three years. Representative Offices can only engage in the collection of market information for the offshore parent company.
What are the advantages of a Representative Office in Singapore?
Representative Offices offer the following advantages for foreign entities looking to establish a presence in Singapore.
- No registration requirements with ACRA
- No minimum capital requirements
- No need to file any financial or other statutory returns with authorities in Singapore
- Low maintenance cost from a compliance perspective due to operating limits
- Allowed to obtain a central registration number to import and export sample products and materials from the parent company.
What are the Disadvantages of a Representative Office in Singapore?
While Representative Offices offer significant advantages, especially the minimal regulatory requirements, some drawbacks exist.
- A Representative Office is limited to promotion and liaison activities, market research, and organizing activities for foreign companies.
- A Representative Office is not allowed to engage in profit-making activities, sign contracts, raise invoices or letters of credit, or engage in trading activities.
- A Representative Office is not a separate legal entity; the parent company is liable for all its liabilities.
- A Representative Office can operate for a maximum of three years and must be renewed annually.
What Activities are Restricted for a Representative Office in Singapore?
Activities not permitted for a Representative Office in Singapore include:
- Engaging in trade
- Offering consultancy services
- Entering into or negotiating business contracts or issuing invoices
- Leasing warehouses
- Sourcing or identifying suppliers
- Engaging in promotional activities such as advertising or marketing
What are the requirements for setting up a Representative Office in Singapore?
Setting up a Representative Office in Singapore comes with certain requirements and procedures that must be followed. Here is a list of the requirements and documents necessary for registration:
Requirements:
- The foreign entity must have a sales turnover of more than US$250,000
- The foreign entity must have been established for more than three years
- The proposed number of staff for the representative office should not exceed five people
Documents:
- Foreign entity’s certificate of incorporation or registration certificate (in soft copy)
- Foreign entity’s latest audited accounts (in soft copy)
- It’s important to note that the application to be registered as a representative office should be made with Enterprise Singapore, and a processing fee of S$200 per year is applicable.
How do I set up a Representative Office in Singapore?
To successfully register a Representative Office in Singapore, the following steps must be completed:
- Fill out the application form to register a representative office.
- Prepare and submit the required documents, which include the foreign entity’s certificate of incorporation and the latest audited accounts.
- Respond to any additional questions or requests for information from the authorities.
- Apply for an employment pass for the staff member who will be relocating to Singapore from the head office, upon approval of the representative office registration.
- The approval process typically takes about one week, after which the establishment of the representative office can be confirmed.
What else should I know?
Once approved, the registration of a Representative Office in Singapore:
- is valid for one year and must be renewed annually.
- can only be renewed for a maximum of three years.
- after three years, the parent company must upgrade the Representative Office to a subsidiary or branch office.
How can Belaws help?
If you have a question about Representative Offices in Singapore, please speak directly with one of our experts.
You can also view our Singapore incorporation services here.
This article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of 1 hour and are conducted by our expert lawyers who are fluent in English, French and Thai.
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Frequently Asked Questions
How do I register my GST number in Singapore?
You can register your GST number in Singapore by submitting an application online through the Inland Revenue Authority of Singapore (IRAS) website using your SingPass or CorpPass account. Alternatively, you can also submit a hard copy of the application form to the IRAS.
Who needs to register for GST in Singapore?
Businesses that make taxable supplies of goods and services and have an annual turnover of more than S$1 million are required to register for GST in Singapore. However, businesses that have an annual turnover of less than S$1 million may choose to register for GST voluntarily.
When should I register for GST in Singapore?
You should register for GST in Singapore within 30 days of your business exceeding the annual turnover threshold of S$1 million, or if you anticipate that your business will exceed the threshold within the next 12 months.
What does it mean to be GST registered in Singapore?
Being GST registered in Singapore means that your business is registered with the Inland Revenue Authority of Singapore (IRAS) and is authorized to charge GST on taxable goods and services provided to customers. GST-registered businesses can also claim input tax credits on GST paid on business purchases and expenses.
Is GST number the same as business number in Singapore?
No, GST number and business number are not the same in Singapore. A GST number is a unique identification number assigned by the Inland Revenue Authority of Singapore (IRAS) to businesses that are registered for GST. On the other hand, a business number in Singapore generally refers to the Unique Entity Number (UEN) which is a standard identification number used by government agencies to identify businesses.
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