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Importance Of Opening a Singapore Representative Office
By: Diane Paz |
| word count: 426 comments(0) views: 100 |
| Exploring the business potential of a market before making huge investments is in most cases a good option. |
Exploring the business potential of a market before making huge investments is in most cases a good option. It is especially true to foreign companies that is deemed as high risk but is otherwise profitable in the long run. With this consideration, a Singapore representative office is the perfect setup most professionals recommend to businessmen who want to avoid huge losses.
The importance of opening a Singapore Representative Office.
A Singapore representative office is also allowed to act as a liaison office of its parent company from abroad, particularly during the negotiation deals. It also performs extensive market research and feasibility study. However, this office is not allowed to enter in to any business contract since it is prohibited to conduct activities which are "commercial" in nature.
A representative office is not considered as a legal business entity but nothing else more than an administrative arrangement. A representative office is only allowed to do activities such as oversee the activities of its parent company's local distributors and agents; establish business contacts for its main office; provide customer care service except those which involve repair and technical services; and conduct market research. On the other hand, these are the activities a Singapore representative office is not allowed to perform: lease warehouse facilities; provide services or products for fees and other profit-generating undertakings; enter in to legal contracts and agreements; and store and ship goods in Singapore.Since the foreign company's representative office is prohibited from storing and shipping goods to Singapore, they should request local agents to do such activities in their behalf.
These are the basic features of a Singapore representative office:
* Unless being used by a business that is currently operating and deemed indecent and vulgar by the authorities, a representative office should carry the name of its parent foreign company. If this is the case, the foreign company will have to choose a different name for its Singapore representative office.
* The permit of this office is renewed annually, but after three years, it is no longer allowed to operate since this period is enough for any foreign companies to determine the potential of their services or products in Singapore.
* Chief representative from the main office is the one who directed the Singapore representative office.
* The Singapore representative office is not allowed to do activities that is deemed "commercial"
* After the validity of this office has expired, foreign companies should resort to another business structures such as the branch office or subsidiary company, which are allowed to conduct money-generating activities, if they want to continue their presence in the city-state. |
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