Another ideal business scheme which provides interested foreign companies more abilities to analyse business opportunities in Singapore is a Singapore Representative Office. This is the safer business scheme available prior to making long term or a fixed commitment. On the contrary, a representative Office is prohibited from engaging in profit-generating activities.

Below are some of the main features of a Singapore Representative Office:

1. It is like an annex to the foreign company.

2.. It must have the same name as the parent company.

3. It cannot engage in commercial revenue-generating activities, and therefore need not file for annual tax returns. But the income earned by the staff of the Representative Office including the Chief Representative is subject to personal income tax.

4. Also, compliance with the filing of legal requirements is unnecessary because it is not a business entity.

5. Negotiating any trading equipments or warehouse leasing is prohibited. However, it is permitted to lease office space.

6. To be able to support its limited administrative activities it is allowed to appoint limited number of staff– both local and foreign.

7. In order for a Singapore Representative Office to have the ability to import and export product samples it is allowed to obtain a central registration number from the Singapore Customs.

8. The scheme has only short term existence of 3 years from the time of its registration with a requirement of annual renewal.

Being able to seek business opportunities in Singapore market prior to making major investments or commitment is among the benefits of setting up a representative office in Singapore which includes foreign companies. In addition to that, it also provides a leeway to make feasibility studies and market research regarding the business and create market presence with brand identity and also it gives a good foundation to collaborate with agents and distributors locally.

However, despite being advantageous in a major way, there are little drawbacks of this business scheme which includes the limitations to engage in profit-generating activities. Also since it is a short-term setup it required to upgrade to a branch office or a subsidiary after 3 years or make another registration. In addition, it does not have a separate legal identity, and so, in effect, the foreign parent company is totally obliged to its debts, losses and liabilities.

All in all, it is wise to employ the services of a business registration firm in Singapore to be able to process the registration of any preferred business scheme accordingly.