Is Franchise regulated in Singapore?
There are currently no laws governing franchising in Singapore. However, the Franchising and Licensing Association of Singapore (FLA), being the non-governmental organisation that serves as the country’s leading franchise body, has a set of Code of Ethics that they recommend for parties to adhere to.
The Code is only binding on members of FLA. However general laws surrounding commercial activity in Singapore will also apply to those involved in franchising. These laws include the Competition Act, the Unfair Contract Terms Act, and the Multi-Level Marketing and Pyramid Selling (Prohibition) Act. Certain industries such as real estate and insurance are also subject to separate regulations.
Do email us at email@example.com if you wish to have a copy of the Code of Ethics and our Franchise Team can send the copy to you.
What is the registration process to have the franchise registered in Singapore?
There are no regulations surrounding franchising in Singapore, and neither are there are any registration requirement for franchises in Singapore.
We do, however, recommend that franchisees register their relevant trademarks at the IP Office in Singapore before venturing into any franchise arrangements with third parties.
What are the criteria for a company to be allowed to franchise in the country?
There are no restrictions on any foreign company or local company to franchise their business in Singapore. As there are no regulations, there are no specific criteria that Franchisors need to meet as well.
What tips can we provide to Franchisors or Franchisees?
Whilst there are no formal contractual requirements for franchise agreements, it is highly recommended that all contracts be in writing and, if not already in English, have an English translation provided, as this is the recognised working language of Singapore. It is also worth noting that, except in special circumstances, there is no implied duty of good faith imposed on either a franchisor or franchisee.
Withholding taxes apply to payments to foreign franchisors, such as royalties and management fees.
It is advisable for all agreements to be reviewed by local lawyers to ensure that the terms therein are localised for the Singaporean business landscape.
Examples of popular Singaporean franchises:
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