A foreign corporation eager to examine potential opportunities in Singapore and the region may contemplate erecting a representative office before devoting to any forms of investment that come with erecting a subsidiary or branch office.
Unlike a subsidiary or a branch department, a Singapore representative office is glimpsed as a liaison office and as such has no lawful status. It cannot administer any business actions of an earnings-generating nature. Finance and associated businesses are not liberalized areas and consequently, the authorization procedure for a representative office of such organizations can be relatively complicated. For most other areas, the representative office authorization procedure is simple, determining the foreign corporation is a conventional entity and the extent of deliberate actions plunges within the extent of a representative office.
Singapore Representative Office as a Business Entity
A Foreign Company & Representative Office retains no legal significance and it is barely an expansion of the foreign corporation. It must not perform any business actions of earnings yielding nature. Since it lacks legal significance, a representative office is restricted from inferring contracts, intervening or unlocking a Letter of Credit, leasing a warehouse, getting involved in trading, etc. It can just commit to actions such as administering market exploration and feasibility surveys.
So, a representative office is an interim administrative office that is prepared to organize and coordinate nonmarketable actions of a foreign company.
Singapore Representative Office
- A representative office is not a distinct entity from the parent firm and the parent firm is implicitly credible for all the detriments of the representative office.
- The name of the Singapore representative office shall be similar to that of the parent firm. In the case where the name occurs simultaneously with an already occurring local firm, administrations will make a judgment on a case-by-case purpose.
- A representative office may commit a minor number of local workers as support staff but must elect a chief representative staff member from the head office who will relocate to Singapore and supervise its actions. Since a representative office cannot be implicated in commercial actions, the faculty stability should be adequate and maintained to the crucial minimum.
- Any change(s) to the representative office (such as a change in address, change in representatives, registered activities, etc.) must be instructed to councils in advance i.e. at least one month preliminary to the change taking impact. In case of modifications in the name of the parent firm, the announcement must be escorted by a copy of the name’s Certificate of Change from the parent firm.
- Evidence regarding the parent company’s actions and communication details of the representative office in Singapore can be made public at the intention of authorities.
- Foreign Company & Representative Office in Singapore is not an incorporated corpse and thus, none of the filing regulations committed on the incorporated beings or registered corporate bodies is acceptable to it. A representative office need not conserve any statutory papers or accept tax returns in Singapore.
- A Singapore representative office is enabled to attain enrollment numbers to receive and ship specimen products and substances from the parent company. Nonetheless, a representative office is precisely restricted from implicating in trading actions using the central registration number.
- In case the parent company comes to be stagnant, the representative office must similarly de-register.
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