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Q:
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What is a Representative Office?
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A:
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Foreign entities from the manufacturing, international trading, wholesale, trade and trade-related business sectors that are keen on exploring the viability of doing business in Singapore, or are interested in using Singapore as a launch pad into the Asia Pacific, may wish to set-up a Representative Office (“RO”). By setting up an RO, it allows a foreign entity to assess the business environment in Singapore before deciding to set up a permanent establishment.
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Q:
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How long can the RO operate for?
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A:
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The RO can only operate in Singapore for a maximum of three (3) years. Hence, its RO status must be renewed annually during this 3-year period.
ROs which decide to continue their presence in Singapore thereafter should register their operations with the Accounting & Corporate Regulatory Authority (“ACRA”) of Singapore.
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Q:
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What are the criteria to set up RO?
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A:
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All new application of foreign commercial entities must fulfil the following criteria:
The foreign parent company must have a sales turnover in excess of more than USD250,000.00
The foreign parent company must be established for three (3) years or more; and
The proposed number of employees for the Singapore representative office must be five (5) or below.
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Q:
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What is the basic structure of a RO?
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The name of the RO must be the same as the parent company;
The parent company must own 100% of the RO;
The RO must have at least one representative who can be Singapore resident or foreign staff member. The RO is required to apply for an Employment Pass with the Ministry of Manpower for the Chief Representative for relocating to Singapore to run the RO’s operations; and
A RO must confine its activities strictly to conducting market research and feasibility studies on the viability of setting up a permanent entity in Singapore, inclusive of the following: -
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Collect information about markets, competitors and/or customers.
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Conduct research on the demand for the product and/or service.
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Gather information on business regulatory requirement for subsequent set up of permanent entity.
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Cultivate trade contacts and handle product enquiries.
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Participate in exhibitions and trade shows.
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Q:
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Is the RO liable to corporate tax?
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A:
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As the RO is unable to generate revenue, it will not be liable for any corporate tax in Singapore.
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FAQ
