Representative Office in Singapore – Requirements & Procedure

Varun Hariharan

19 Jan, 2021

A representative office in Singapore is understood as an office which does not have the capacity to carry out a business in Singapore. If a company does not want to set up an office in Singapore, then the company can go for the process of establishing a representative office in Singapore. This type of office is also known as a representative corporation or a liaison office in Singapore. Usually, the functions carried out by a representative office are not business oriented. This office is established mainly to carry out research requirements or market analysis for the parent company.

The activities carried out by a Singapore Representative Office are limited to certain circumstances. It is not suitable to open this form of office in Singapore, if the company is not planning to establish prospective operations in the future at Singapore.

What is the Legal Status of a Representative Office in Singapore?

Companies that are incorporated in Singapore, be it private companies or public companies have some status known as limited liability. Apart from this status, companies are a separate legal entity independent of the shareholders and directors of the company.

Usually when a representative office is established in Singapore, the entity does not have a separate legal status. It is just a form of extension of the foreign company. Coming to the authority, there is no form of express or implied authority of this company to enter into any form of contracts, agreements or negotiations on behalf of the parent company.

Activities which are permitted by a Representative Office in Singapore

The following are the activities permitted by a representative office in Singapore:

• Market Research
• Research and Development
• Marketing
• Advertising
• Project Research
• Liaising with Parent Company on prospective establishment requirements

While all the above activities are permitted for a representative office, the office is not permitted to carry out any activities related to carrying out business, sales or execution of projects.

Requirements to be considered before opening a representative office in Singapore

The following are the requirements to consider before opening a representative office in Singapore:

1. Sales Revenue
2. Year of Establishment
3. Number of Employees
4. Bank Account
5. Legal Compliance

• Sales Revenue- For setting up or establishing a representative office, the amount of sales revenue of the foreign parent company must be more than USD 2, 50,000. This amount will include the amount of revenue derived from the sales of the business.
• Year of Establishment- The foreign parent company must be established for a period more than 3 years outside Singapore. Hence this is one of the main requirements for setting up a representative office in Singapore.
• Number of Employees- The office in Singapore must have specific number of employees to operate. The number of employees of the office in Singapore must be lesser than five.
• Bank Account- Once the office is established, it should immediately open a corporate bank account in Singapore. This is a mandatory requirement for the representative office as transactions would be credited to this account. Apart from this, the foreign parent company can transfer setting up funds and administrative expenses to this bank account.
• Legal Compliance- The representative office must comply with the requirements of the Companies’ Act of Singapore (Chapter 50). Apart from this the requirements of the ACRA must also be complied and adhered by the representative office.

Procedure for Setting up a Representative Office in Singapore

The following procedure has to be considered for setting a representative office in Singapore:

• Satisfy Eligibility Requirements
• File Application
• Submit Documents
• Approval
• Opening a Bank Account

Satisfy Eligibility Requirements– First and foremost all the requirements mentioned above must be satisfied by the applicant. Here the applicant would be the foreign parent company. The turnover, revenue and the number of employees of the representative office must be compliant with the requirements of the authority.

File Application- If the applicant meets all the requirements for setting up a representative office in Singapore, then the application must be filed to the respective regulatory authority in Singapore. The respective regulatory authority in Singapore is the ACRA and the Registrar of Companies in Singapore. Along with the application, specific documents have to be submitted.

Submit Documents– In the next step, the applicant would have to submit documents as required by the authority.

The following documents have to be submitted to the authority:

• Certificate of Incorporation (Attested Copy of the Parent Company)
• Registration Certificate
• Memorandum of Association and Articles of Association of the Company
• Copy of the Accounts and Audit Report Maintained by the Parent Company
• Terms and Conditions related to working of the Representative Office in Singapore
• Any other documents as required by the authority.

All the documents submitted must be in English language. If such documents are not in English, then they should be translated. Copies of the translation must also be provided to the authority.

Approval- In the next step, the authority would review the application along with the submitted documents. If there are no discrepancies related to the application, then the same would be approved by the respective authority. Usually it takes about seven to ten working days for the authority to make an approval. The approval from the authority would be communicated through a letter of approval to the registered email of the applicant. The certificate of registration for this representative office is valid for a period of one year. It is mandatory to renew this certificate every year. It must be carried out at least seven days before the expiry of the certificate.

Opening a Bank Account- After the letter of approval is obtained by the applicant, the same can be provided to the respective bank for opening a corporate bank account in Singapore. Usually this would take about two to ten working days to open a corporate bank account in Singapore. The applicant has to research on the best bank to open a corporate bank account.

Hence the applicant has to follow the above eligibility requirements and procedure to open a representative office in Singapore.

Conclusion

Read our article:Company registration in Singapore: Requirements and Procedure