Advantages and Disadvantages of a Singapore Representative Office

Advantages and Disadvantages of a Singapore Representative Office

In some cases, a Singapore representative office may be a good choice for your business. However, unless you know all of the other options, you may not be able to make the right decision. A representative office in Singapore may not be the best choice, in some situations.

Good Reasons to Consider a Singapore Representative Office

You may be uncertain about expanding your business. You will not have to make any long term commitments for business.

You may wish to "test the waters" on a new market. Perhaps you are unsure how your business will do in Singapore. A representative office can be a good way to look at the current market.

You may wish to research the market and business environment of a foreign country. This is the perfect way to accomplish this. You will be free to conduct research for your company in Singapore.

Perhaps you are considering several countries for expansion. Your budget may not allow you to currently expand to several countries. A representative office may be a good way to get good information about other countries.

Your research can be done firsthand. You will not have to rely on reports and records that can sometimes be subjective.

Good Reasons to Not Consider a Singapore Representative Office

1. You may wish to conduct business in a foreign country. You cannot do this if you register as a representative office. Your representative office will not be allowed to sell products or to ship products.

2. You may wish to establish a separate business entity from your main business. If so, you will have to consider other options for this. Your representative office must have the same name as your company. Your company will be liable for any actions taken by your representative office, also.

3. You may wish to take advantage of the many tax benefits from new business. You cannot do this with a representative office. For one thing, you cannot conduct normal business that will result in profit.

4. You may have problems with negotiations or business deals. Your representative office may participate in negotiations. However, the office has no power to be a part of the contract. You will need a company official if your company needs to finalize any deals.

5. You may wish to offer customer service through your representative office. It will be very limited, as you cannot give advice or engage in any repair services. Your customer service must be confined to answering questions on the behalf of your parent company.

Summary

There are several good reasons to consider registering a Singapore representative office. It is an excellent way to look into possible business expansions without any long term commitments. You will be free to conduct market research for your company. This will give you firsthand knowledge of the business environment in Singapore.

However, there are several reasons to consider other options. You will not be allowed to conduct usual business like selling or shipping. You cannot conduct normal customer service like giving advice or repairing products. Even though you can negotiate business deals, you will not be authorized to finalize them.

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