How to Setup A Singapore Representative Office

4 min read|Last Updated: February 6, 2024|

Regulated by The Accounting and Corporate Regulatory Authority (ACRA), foreign companies can establish a Representative Office (RO) in Singapore to explore business opportunities before committing. An RO allows assessment of the business environment without engaging in profit-yielding activities.

However, for sales purposes, incorporating a private limited company is advisable.

Permitted Activities Under a Singapore Representative Office

The representative office aims to assess product or service demand, similar to conducting market research in the country.

Here is a list of activities that this company type is allowed to engage in:

  • Conduct competitor and consumer analysis

  • Engage in market research to identify market gaps, supply and demand, pricing strategy

  • Network and build connections with key industry players and suppliers

  • Participate in trade shows in exhibitions

  • Prepare any documentations or do research for future company incorporation in Singapore

Additionally, there are limitations on the activities conducted by representative offices, including:

  • Engage in business activities or sign contracts with any form of businesses

  • Issue invoices or receive any credit

  • Lease property

Requirements to set up a Representative Office in Singapore

The requirements for a RO setup in Singapore are:

  • The sales turnover of the foreign company must be at least US$ 250,000;
  • The foreign company must be established for a minimum period of 3 years;
  • The proposed number of staff for the Representative Office should not exceed 5.

Documents Required to Start a Singapore Representative Office

The following documents must be submitted:

  • Completed Singapore representative office 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

Timeline, Fees & Validity for Representative Office in Singapore

Setting up a RO in Singapore typically takes 5 working days for approval, with a processing fee of $200 payable by cheque, credit card, or bank draft only. No cash is accepted.

Following approval, you’ll receive a one-year validity Letter of Approval, along with a renewal notice sent approximately 2 months before expiry.

Should there be no response for the renewal of representative office, the authorities will proceed to strike off. Take note that you can only renew for a maximum of 3 years.

Comparison Between RO, Branch & Subsidiary Company in Singapore

Foreign companies setting up in Singapore have multiple avenues to do so. See below for a comprehensive comparison between branch office, subsidiary company, and representative office and what sets them apart from each other.

Singapore Branch Office Singapore Subsidiary Company Singapore Representative Office
Legal Type: Not a separate legal entity but an extension of the parent company Separate legal entity distinct from its parent company Has no legal status, a temporary administrative arrangement
Liabilities: Liabilities incurred by the branch office extend to parent company. Parent company can limit liabilities to subsidiary. Liabilities incurred by the representative office extend to parent company.
Taxation: Taxed a flat corporate tax rate of 17% as non-resident entity, local tax benefits and exemption not available Taxed a flat corporate tax rate of 17% as Singapore resident entity, local tax benefits available Not applicable
Validity Period: Registered forever until closed Registered forever until closed You must renew it every year for a maximum of 3 years. You need to evaluate and renew the RO status annually.

A Representative Office of a foreign commercial entity can operate in Singapore for up to three years, subject to annual evaluation and renewal. If they wish to continue beyond this period, they must register with the Accounting & Corporate Regulatory Authority (ACRA) of Singapore.

At what point would it be strategically ideal for you to convert your Representative Office?

  • When you’re generating local Singapore sales for HQ, you would have tax substance in Singapore and should register a local company and invoice locally.
  • Convert your RO whenever it benefits your tax planning, I.e. tax rates for HQ is high in jurisdictions like Australia or USA. Commonly heard and known, Singapore has a favourable tax regime. Read more about it here. A company’s effective tax rate for the first $100,000 profit is estimated about 7%.
Angela

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FAQs

Is the Tax exemption for Start-ups expected to be revoked?2020-06-23T12:55:00+08:00

The tax exemption for start-ups which has been offered by the Singaporean government is currently expected to remain in place for the foreseeable future. The government has always had the intent to develop entrepreneurship in the country. Therefore, it would like to keep this exemption in place to foster the development and growth of start-ups in Singapore.

Why is a company Business profile necessary during Incorporation?2020-06-23T12:54:42+08:00

The information listed within a company business profile is important because it verifies the details about the company. The company business profile proves that the company is genuine and devoid of the intent to deceive its customers. For this reason, the company business profile (along with the certificate of incorporation) is required for all of the company’s contractual and legal activities.

Who is allowed to Incorporate a company in Singapore?2020-06-23T12:54:13+08:00

There are no restrictions on the identity of those who plan to incorporate a company in Singapore. Anyone who fulfills all of the necessary criteria is allowed to do so. However, those who fail to fulfill the criteria may not incorporate a Singapore company until they have done so. 

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