Representative Office: An Ideal Business Model for Foreigners Wanting to Conduct Market Research

Online, September 16, 2010 (Newswire.com) - Company registration specialist AsiaBiz Services believes that a Singapore representative office is the most recommended business model for foreign companies "planning to conduct market research before engaging in full-blown operation and investing huge sums of capital." To know more about reporesentative office, follow the link: http://www.rikvin.com/business-types/singapore-representative-office/

"There are three business models for foreign companies planning to have a presence in Singapore. However, the most ideal is the representative office particularly to foreign entrepreneurs who want to test the viability of their products and services," AsiaBiz Services spokesman said.

Aside from market research and "business exploration," AsiaBiz Services added that this business model can also perform liaison works on behalf of its parent company abroad, provide non-technical customer care support, and oversee the activities of local distributors and agents of its main headquarter.

It is important to note that a representative office is prohibited to provide services for fees and other activities that can generate revenue. Aside from this limit, this arrangement is also prohibited to enter into business contracts, issue receipts and invoices, engage in trade (including import and export), and lease warehouse facilities.

Meanwhile, a representative office should be only treated as a short-term arrangement since the Singapore government does not allow a foreign company to operate this for more than three years.

"Foreign entrepreneurs are required to renew their permit for their representative office every year. But after a three-year period, they should register a Singapore branch office or Singapore subsidiary company if they want to continue their presence in the country and conduct business activities that can generate revenue," the company registration specialist added. To know more about branch office, follow the link: http://www.rikvin.com/incorporation/singapore-branch-office-registration/

To register a Singapore representative office, foreign companies should file their application to the Monetary Authority of Singapore (MAS) if they are in the banking and insurance sectors. And for business organizations operating in other industries, they should register their auxiliary office to the International Enterprise (IE) Singapore.

Meanwhile, it is a legal requirement for foreign companies to appoint and relocate a chief representative from the main office who will manage and oversee the activities of a representative office. It is also important to note that this arrangement only allows a limited number of staff which is based on the decision of the authorities.

After conducting market research which has revealed the viability of a business, foreign companies may delist their representative office anytime they want to and register a subsidiary company or branch office if they want to engage in revenue-generating activities, trading, and other commercial activities.