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Rep, Branch or Subsidiary--which one is the right one?

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CAtoSing
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Rep, Branch or Subsidiary--which one is the right one?

Postby CAtoSing » Thu, 04 Sep 2014 9:33 pm

Hello Everyone

I've read several posts on this topic, but feel my situation is a bit different so thought I'd add another post... or I'm just looking for some comforting assurances :-)

I live in the US and work for a Norwegian company. My company has been incorporated in Norway since 1996 and has annual turnover of a few million USD. We have distributors throughout Asia Pacific, including Singapore, and do all our business through them.

I, along with my family, will be relocated to Singapore in order to offer better support to our distributors in the region, including in Singapore. The idea is to be in the same time zone as most of our customers in the region and also to save time/cost in visiting them (I'm getting tired of flying across the Pacific....)

My "daily work" will be meeting with existing/potential customers, as well as our distributor in Singapore, to help them define product specifications, answer technical questions, etc. I will NOT, however, engage in any trading, quoting, importing/exporting of anything, holding of any kind of inventory, shipping/receiving, invoicing, hiring of staff, etc. I will also not generate any type of *direct* income as we will not be selling anything. All of these activities will be done by our distributors, which are established corporations in Singapore. In other words, my job will be merely to serve as a technical resource that’s locally available to our distributors (as they seek to gain business for our Norwegian HQ) and customers (as I help them use our products).

Further to the above, note that we intend to maintain our presence in Singapore for a maximum of 3 years. After this time, we will decide whether to fully incorporate in Singapore, hire local staff, etc. Until then, it will be just myself working from a non-HDB home-office.

So given this information, which of the three types of entities (RO, Branch or Subsidiary) would be the appropriate entity for our case? My bosses are fairly green at this type of endeavor and we also don't have a corporate relocation company to help me out, so I'm trying to keep everything as simple and as inexpensive as possible.

Much appreciate any wisdom from the pros!

Thanks.

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Strong Eagle
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Postby Strong Eagle » Thu, 04 Sep 2014 11:17 pm

I don't think you qualify for a representative office. See this thread for more details but the main thing is that you are in a customer support role, which is not allowed, as in, "Non Allowable RO Activities - Provide service, support and manage distributors, agents, representatives and customers in the region".

ftopic98727.html&highlight=representative+office

This leaves you with the option of setting up a branch or subsidiary. The difference, as I understand it, is that a branch operates under the original company's articles of incorporation and those articles must be approved by ACRA as meeting minimum requirements. In this case, there is no stock issued. Filing fee is $1200.

A subsidiary is incorporated in Singapore using Singapore standard memorandum and articles of incorporation. Stock is issued (it can be $2 if you wish) which is owned by the parent company. Filing costs are $300.

I don't see the point in a branch. It might make some difference in accounting for the net worth of a company but since you're not planning on generating revenue, this is pretty much a wash.

You will need to engage a CPA to set up a foreign branch or subsidiary, mainly because you have to submit a bunch of documents from the parent company. See this link for more details.

ftopic102601.html&highlight=representative+office.

See also the ACRA website: https://www.acra.gov.sg/components/wire ... ageid=1048

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Postby ScoobyDoes » Fri, 05 Sep 2014 10:59 am

Strong Eagle wrote:I don't think you qualify for a representative office. See this thread for more details but the main thing is that you are in a customer support role, which is not allowed, as in, "Non Allowable RO Activities - Provide service, support and manage distributors, agents, representatives and customers in the region".



SE: I don't want to ask a dumb question but....... what's a Rep. Office supposed to do if it doesn't do any of what's "Non-allowed"?

Any Rep. Office I know promotes product and services whilst having orders and follow-up through an agent or directly back to a facility overseas.
'When Lewis Hamilton wins a race he has to thank Vodafone whereas in my day I used to chase the crumpet. I know which era I'd rather race in.'

SIR Stirling Moss OBE

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Strong Eagle
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Postby Strong Eagle » Fri, 05 Sep 2014 9:11 pm

From the IE Singapore website:

Allowable RO Activities

Conduct market research and feasibility studies on the viability of setting up a permanent entity in Singapore inclusive of the following:-

· Collect information about markets, competitors or customers.
· Conduct research on the demand for the product or service; potential customers’ needs and price expectation.
· Gather information on regulatory requirement related to establishing a permanent entity in Singapore.
· Cultivate trade contacts and handle product enquiries.
· Participate in exhibitions and trade shows.


If they are doing anything else, they are in violation of the regulations. An RO can operate for only a max of 3 years and must be reviewed annually. It's hard for me to see how someone could be performing the activities you mentioned within a RO unless they are simply lying on their reapplication.

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Postby CAtoSing » Sat, 06 Sep 2014 2:03 pm

Thanks for confirming my thoughts, SE. I will be engaging a CPA to help setting up the Branch Office (we prefer that over a Subsidiary).

I'm shopping around for a good CPA and already have a few contacts, but if anyone out there has any recommendations, I'd appreciate it (not sure of the policy on business recommendations on the forum, is this ok? Apologies if not). I'll be doing this fully remotely as I won't be in Singapore until January, so looking for a good CPA who can address concerns, answer questions, etc. as in addition to opening the BO I'll also need EP and Dependent Pass.

Thanks again for the help!

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Postby Strong Eagle » Sat, 06 Sep 2014 9:50 pm

I'll PM you my accountant information. I've used her for ten years. Not the cheapest, not the most expensive and I think she probably has the knowledge to set up a branch or subsidiary.


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