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New Business - questions

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waky
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New Business - questions

Post by waky » Sat, 10 Aug 2019 5:30 am

Dear all,

I hope you can help me out with my questions and you can give me some advise. Currently I'm working as an SME(Subject Matter Expert) for a US company remotely from Europe. My work also means that I need to travel through Europe and MEA region to customers. Meanwhile, I'm also trying to put together a product with some friends which we would like to position t o different IT companies and in addition, I'm also having different Sales Agent contract with small companies trying to sell their product in the EMEA region through my contacts.

My wife would like to have a break of work for a period of time, hence, we decided why not to move too Singapore. We would like to experience the life and visit around SE Asia, but also to try to grow my future business.

I was reading all the 100s posts on this and I learned a lot, however, I might post the same questions so I would like to apologies in advance. My idea is the following. To keep my remote job with the US company (they do not have any legal entity in SG) and "relocate" to work with the customer from Asia. Meanwhile, I would like to create a business through which on one hand I would like to try to sell the products which I'm creating (we will have a MVP in 3-6 months from now) to IT companies in SG and in addition the products that I already sell in Europe also in SG. In order to have legal status in SG I would like to apply for the EP through my company. As I understood, I would need to have a business plan, a local director, some upfront paid capital etc. Now my questions :

1. First a general questions, do you think that the above scenario would give me the legal right to stay in SG and bring my family on DP visa?

2. I was thinking, that until i really have some traction with selling solutions (either my own or the one which I represent), I could fund my salary in SG by transferring the salary that I get as an SME to my SG company, pay the tax in SG? Would you think it will work ? Does the SG IRS will "care" from where the money comes from into my company ?

3. I tried to find a post where I could find a reference to some company in Singapore who give me guidance on how to open the business, loan a local director, do my taxes, etc. Any recommendation ?

4. As I read, the EP which you receive on your own company could be for 1 or 2Y, is that correct?

5. What should be the upfront capital that I should put into the company?

Just want to outline that I want to have this process legally done, want to pay my taxes in SG, I want my kids to go to daycare/school, etc so everything should be be done like in the books.

Hope all of you people could help me out with your recommendation/suggestions/guidance.

Thank you in advance.

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PNGMK
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Re: New Business - questions

Post by PNGMK » Sat, 10 Aug 2019 9:21 am

1. Yes an EP would give you a DP.
2. I see no reason why not.
3. There are plenty around - PM me if you can't find one.
4. Don't know.
5. Doesn't matter. It can be $1.
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
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Re: New Business - questions

Post by waky » Sat, 10 Aug 2019 8:10 pm

Thank you PNGMK for your response.

So in the above scenario could I get my EP then ?

In regards to 4) what is the minimum duration of an EP visa ?

In regards to 5) in case I only put $1 they will not ask them self how I would sustain myself ?

6) Can I create the business in SG and apply in EP while I'm on a 90 days tourist visa or is better to do it online from my home country ?

Thank you in advance for your responses.

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Strong Eagle
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Re: New Business - questions

Post by Strong Eagle » Sat, 10 Aug 2019 11:35 pm

I have replied inline to your questions, below.
waky wrote:
Sat, 10 Aug 2019 5:30 am
Dear all,

I hope you can help me out with my questions and you can give me some advise. Currently I'm working as an SME(Subject Matter Expert) for a US company remotely from Europe. My work also means that I need to travel through Europe and MEA region to customers. Meanwhile, I'm also trying to put together a product with some friends which we would like to position t o different IT companies and in addition, I'm also having different Sales Agent contract with small companies trying to sell their product in the EMEA region through my contacts.

My wife would like to have a break of work for a period of time, hence, we decided why not to move too Singapore. We would like to experience the life and visit around SE Asia, but also to try to grow my future business.

I was reading all the 100s posts on this and I learned a lot, however, I might post the same questions so I would like to apologies in advance. My idea is the following. To keep my remote job with the US company (they do not have any legal entity in SG) and "relocate" to work with the customer from Asia. Meanwhile, I would like to create a business through which on one hand I would like to try to sell the products which I'm creating (we will have a MVP in 3-6 months from now) to IT companies in SG and in addition the products that I already sell in Europe also in SG. In order to have legal status in SG I would like to apply for the EP through my company. As I understood, I would need to have a business plan, a local director, some upfront paid capital etc. Now my questions :

1. First a general questions, do you think that the above scenario would give me the legal right to stay in SG and bring my family on DP visa?
So, the first thing to understand is that the whole idea of issuing work permits and allowing foreigners into the country was to enable local companies to hire foreign talent where the expertise did not exist locally. You have to remember that everything around hiring foreigners is about making it better for Singapore and not the foreigner.

And then everybody and their dog had the same idea as you... let's go to Singapore and form a company and live the good life. And the big companies in Singapore wanted to hire contractors and not employees, so why not? And so the gahmen created the Entrepass program, and if you were breathing and could create a business plan, you were in. Little things like startup capital didn't matter.

People abused the ever loving shit out of the program as an easy way to get the legal right to live in Singapore. People with no money, no expertise, and no business experience would get their EP, then disappear into the woodwork, only to be hired into another company locally, which was their entire intent in the first place.

The gahmen cranked down hard on the Entrepass program, so hard in fact, that you had to have a personal note from god, a ton of venture capital money, gold plated teeth, the blessings of the scientific community, and commit to a totally f*cking atrocious local compensation and hiring plan to get your pass. If you haven't read my dated, yet still relevant thread from way back when, you should. viewtopic.php?f=22&t=93619

The gahmen eventually realized that their overly restrictive rules were killing entrepreneurial investment in Singapore and they have relented. So now the gahmen has relaxed the rules and you can get into the country with your own business in a couple of ways, one being the modified Entrepass rules (https://www.mom.gov.sg/passes-and-permits/entrepass), and the other ways, which I describe in more detail, below.

So... the answer to your question is, "yes", it is possible to do what you want but because so many people have shit in the swimming pool, you better have a real business, real business acumen, some money, and the gift of gab to be able to prove it all up.

I'd add that it sounds like you are of European descent. If you're English, German, French, Spanish, or of other western European background, that's good. If you're eastern European (Romanian, Russian, the 'Stans, etc), you got more of a problem because it's these folks trying to scam the government, just like it was our subcontinent neighbors in the past.
2. I was thinking, that until i really have some traction with selling solutions (either my own or the one which I represent), I could fund my salary in SG by transferring the salary that I get as an SME to my SG company, pay the tax in SG? Would you think it will work ? Does the SG IRS will "care" from where the money comes from into my company ?
Here's the deal. A legal resident of Singapore can earn money from a foreign company so long as the foreign company has no legal presence in Singapore and provides no goods and services in Singapore. Works OK for someone on a DP or LTVP. This isn't going to work so well for you. The gahmen is going to ask, "How are you going to build and run a business in Singapore when you are working for someone else?" And really, doesn't it sound scammy as shit... you want to backdoor yourself into Singapore so you can live here, but really, your income comes from somewhere else? "Transfer" money into a company from where? Are you money laundering? You see the problems with this idea? But, see more below as a way around.
3. I tried to find a post where I could find a reference to some company in Singapore who give me guidance on how to open the business, loan a local director, do my taxes, etc. Any recommendation ?
Here's the deal. If I were your advisor (and I am... just making a very poor hourly rate), here's what I would tell you. You must understand two things about a Singapore registered private limited company. It must have a normally resident, ie, legally living in Singapore, director, and that directory is civilly and criminally liable for the actions of the company.

Most people that try to get into the country with their own business use a firm that rents a director. They are going to be the single, sole shareholder of the company. They don't meet all the requirements of the Entrepass. And they usually get screwed in one (or both) of two ways.
  1. It costs a lot of money to get a rented director who will be you normally resident director. You will also pay a lot of money for accounting services because this company will want to know every transaction in and out of your bank account, every EP you apply for, every contract that you sign. Because, if you're a money launderer, or you're running underage Russian girls into Bangkok, it's their director that gets royally f*cked.
  2. The rented director companies are too stupid to create proper business plans, to ensure that there is proper capital. So, they think they'll get an EP by stating that the foreign dude is going to make $8,000 per month. Fab! Big dough! Only, there is no revenue from the company to pay for the salary, nor is there any capital. Bzzzzzzt!!! No EP for you.
So, this is a shitty way to try and get a foot into Singapore. If you want to increase your chances of getting into Singapore, and use the income that you are currently making as part of your seed capital, then you've got to take a different approach. You'll want to create a wholly owned subsidiary of a foreign company.
  1. If you haven't done so already, you need to be a legal incorporated entity in whatever country you are already living in. A corporation, ie, a private limited, is the best, but an LLC might work. If you're getting paid directly as a private contractor, that needs to change. You need to become an employee of your company and your clients need to pay your company, not you.
  2. Your foreign company uses a CPA to form a wholly owned subsidiary, a private limited, in Singapore. It owns all the stock, not you. It will be sending employees to manage and run the local Singapore firm. It will be appointing local directors. It will be funding the Singapore startup to profitability. It will be providing its intellectual property and business expertise to get the Singapore company off the ground.
Can you see the difference? You're not some unknown clown coming in to form a private limited and make your way in Singapore, you are a foreign company with a track record, with money, with expertise, that wants to open new doors in Singapore. The money you are earning now becomes an investment loan into the Singapore company by your foreign company.

You don't need a rented director because you form your company with a local CPA who lists a foreign director who will become resident on a date certain, usually the data that the company starts business. You do need a local CPA to act as your secretary and to handle your taxes.
4. As I read, the EP which you receive on your own company could be for 1 or 2Y, is that correct?
It is whatever MoM decides to award you. Big MNC's get 3 year EP's. You'll get 1 year if MoM thinks you're a scammy bastard, won't last, but probably won't do a runner or become a financial liability to Singapore. They don't think you'll make it. You'll get 2 years, or maybe more, if MoM and Spring think you've got a reasonable chance of making it. They will wait to see if you succeed.
5. What should be the upfront capital that I should put into the company?

This question is rather disturbing for it means you haven't thought through your business and you're going to end up f*cked. How much money do YOU think you need for upfront capital? Do you think there is a magic number so that the gahmen says, "Ahhhh... looks like Johnny very good... he's got $20,000 in paid up capital?"

No! That's bullshit. What does your business plan say?
  1. How much money will it cost you to get your company started in Singapore... all in?
  2. What are your anticipated revenues in year 1 through 5?
  3. What are your anticipated expenses in year 1 through 5?
  4. When is your anticipated break even date, the date that the company can support itself?
  5. How much money will you need to keep the company running until your break even date?
  6. How much money do you need to live until the company is profitable and can pay your salary?That's your food, your rent, your wife, school for the kiddies.

Bottom line: You say you have an income stream. You will have expenses. If you don't have enough capital to cover the difference between your income stream from your foreign company and your local company and personal costs, you're f*cked. You're f*cked because SPRING will see that your business plan is full of holes. And you're personally f*cked because you've set yourself up for failure by guaranteeing you will run out of money before the business is a go.

Edit: You did ask, "paid up capital", and PNGMK is correct that $1 will do the trick from the regulatory perspective. But, what are you going to do to convince the authorities that you can start your company and support yourself through profitability? You put money in a company bank account. You can do it as a loan or you can do it as equity, ie, paid up capital. The thing is, a loan, so long as there is money in the bank, can be immediately paid back, and presto, no money in the company. When the money is in the bank as a result of an equity purchase, you can still get it back out, but winding up a company takes more work.

Therefore, I would use some combination of paid up capital and loans to the company. You should be reading between the lines here that you don't fund your living expenses privately, you fund your company so that it pays you your living expenses.

That's my SGD 0.02.
Just want to outline that I want to have this process legally done, want to pay my taxes in SG, I want my kids to go to daycare/school, etc so everything should be be done like in the books.

Hope all of you people could help me out with your recommendation/suggestions/guidance.

Thank you in advance.

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PNGMK
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Re: New Business - questions

Post by PNGMK » Mon, 12 Aug 2019 9:01 pm

There was never a 0.2 cent coin

Image
I not lawyer/teacher/CPA.
You've been arrested? Law Society of Singapore can provide referrals.
You want an International School job? School website or http://www.ISS.edu
Your rugrat needs a School? Avoid for profit schools
You need Tax advice? Ask a CPA
You ran away without doing NS? Shame on you!

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Strong Eagle
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Re: New Business - questions

Post by Strong Eagle » Mon, 12 Aug 2019 9:35 pm

Right you are. How about

Image

waky
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Re: New Business - questions

Post by waky » Tue, 13 Aug 2019 5:53 pm

First of all thank you for your response, hence, please see mine and some additional questions.
So, the first thing to understand is that the whole idea of issuing work permits and allowing foreigners into the country was to enable local companies to hire foreign talent where the expertise did not exist locally. You have to remember that everything around hiring foreigners is about making it better for Singapore and not the foreigner.

And then everybody and their dog had the same idea as you... let's go to Singapore and form a company and live the good life. And the big companies in Singapore wanted to hire contractors and not employees, so why not? And so the gahmen created the Entrepass program, and if you were breathing and could create a business plan, you were in. Little things like startup capital didn't matter.

People abused the ever loving shit out of the program as an easy way to get the legal right to live in Singapore. People with no money, no expertise, and no business experience would get their EP, then disappear into the woodwork, only to be hired into another company locally, which was their entire intent in the first place.
Although I understand that this was done before, do not want to come to the the country to abuse anything just want to live there for 1Y - 2Y while I really try to expend my future business. In my defense I have more than 10 years of international experience in the Telecom market working for different companies, however, recently I started for myself hence creating a product and trying to sell it.
The gahmen cranked down hard on the Entrepass program, so hard in fact, that you had to have a personal note from god, a ton of venture capital money, gold plated teeth, the blessings of the scientific community, and commit to a totally f*cking atrocious local compensation and hiring plan to get your pass. If you haven't read my dated, yet still relevant thread from way back when, you should. viewtopic.php?f=22&t=93619

The gahmen eventually realized that their overly restrictive rules were killing entrepreneurial investment in Singapore and they have relented. So now the gahmen has relaxed the rules and you can get into the country with your own business in a couple of ways, one being the modified Entrepass rules (https://www.mom.gov.sg/passes-and-permits/entrepass), and the other ways, which I describe in more detail, below.

So... the answer to your question is, "yes", it is possible to do what you want but because so many people have shit in the swimming pool, you better have a real business, real business acumen, some money, and the gift of gab to be able to prove it all up.
The business is real and I have a real plan to try to sell the products in Singapore telecom market and through SE Asia as well. For sure if this will work out, the idea is also to have a local people either for support or/and development.
I'd add that it sounds like you are of European descent. If you're English, German, French, Spanish, or of other western European background, that's good. If you're eastern European (Romanian, Russian, the 'Stans, etc), you got more of a problem because it's these folks trying to scam the government, just like it was our subcontinent neighbors in the past.
I do not know if it helps, I'm Hungarian and Romanian. Although I understand what are you saying, I cannot change in this moment my nationality and it is what it is.
2. I was thinking, that until i really have some traction with selling solutions (either my own or the one which I represent), I could fund my salary in SG by transferring the salary that I get as an SME to my SG company, pay the tax in SG? Would you think it will work ? Does the SG IRS will "care" from where the money comes from into my company ?
Here's the deal. A legal resident of Singapore can earn money from a foreign company so long as the foreign company has no legal presence in Singapore and provides no goods and services in Singapore. Works OK for someone on a DP or LTVP. This isn't going to work so well for you. The gahmen is going to ask, "How are you going to build and run a business in Singapore when you are working for someone else?" And really, doesn't it sound scammy as shit... you want to backdoor yourself into Singapore so you can live here, but really, your income comes from somewhere else? "Transfer" money into a company from where? Are you money laundering? You see the problems with this idea? But, see more below as a way around.
I do not do illegal stuff, the idea was till the business is picking up a usual sales cycle takes somewhere between 3-6 months if you know the customer. In this particular case, I have some connections in the region but building some trust and then eventually selling it it will take 6 - 9 months. Till then, in case I'm there I need to pay apartments, food etc hence I will work in parallel for this company giving advise so I can pay the bills. That was the idea.
3. I tried to find a post where I could find a reference to some company in Singapore who give me guidance on how to open the business, loan a local director, do my taxes, etc. Any recommendation ?
Here's the deal. If I were your advisor (and I am... just making a very poor hourly rate), here's what I would tell you. You must understand two things about a Singapore registered private limited company. It must have a normally resident, ie, legally living in Singapore, director, and that directory is civilly and criminally liable for the actions of the company.

Most people that try to get into the country with their own business use a firm that rents a director. They are going to be the single, sole shareholder of the company. They don't meet all the requirements of the Entrepass. And they usually get screwed in one (or both) of two ways.
  1. It costs a lot of money to get a rented director who will be you normally resident director. You will also pay a lot of money for accounting services because this company will want to know every transaction in and out of your bank account, every EP you apply for, every contract that you sign. Because, if you're a money launderer, or you're running underage Russian girls into Bangkok, it's their director that gets royally f*cked.
  2. The rented director companies are too stupid to create proper business plans, to ensure that there is proper capital. So, they think they'll get an EP by stating that the foreign dude is going to make $8,000 per month. Fab! Big dough! Only, there is no revenue from the company to pay for the salary, nor is there any capital. Bzzzzzzt!!! No EP for you.
So, this is a shitty way to try and get a foot into Singapore. If you want to increase your chances of getting into Singapore, and use the income that you are currently making as part of your seed capital, then you've got to take a different approach. You'll want to create a wholly owned subsidiary of a foreign company.
  1. If you haven't done so already, you need to be a legal incorporated entity in whatever country you are already living in. A corporation, ie, a private limited, is the best, but an LLC might work. If you're getting paid directly as a private contractor, that needs to change. You need to become an employee of your company and your clients need to pay your company, not you.
  2. Your foreign company uses a CPA to form a wholly owned subsidiary, a private limited, in Singapore. It owns all the stock, not you. It will be sending employees to manage and run the local Singapore firm. It will be appointing local directors. It will be funding the Singapore startup to profitability. It will be providing its intellectual property and business expertise to get the Singapore company off the ground.
Can you see the difference? You're not some unknown clown coming in to form a private limited and make your way in Singapore, you are a foreign company with a track record, with money, with expertise, that wants to open new doors in Singapore. The money you are earning now becomes an investment loan into the Singapore company by your foreign company.
In priciaada

You don't need a rented director because you form your company with a local CPA who lists a foreign director who will become resident on a date certain, usually the data that the company starts business. You do need a local CPA to act as your secretary and to handle your taxes.
I hope I understood correctly. Currently I have a legal entity in the Netherlands. Currently we are still developing the product, hence, we do not have any customers yet. Of course in the next 3-6 months it might change.
Basically what you are you saying is that I make myself one of the employee of my own company, open a subsidiary of the Dutch company in SG and detach myself in SG in order to grow the business.
In this case you are saying that I do not need anymore a local Director on a Accounting company to pay my taxes in SG ?

[/quote]This question is rather disturbing for it means you haven't thought through your business and you're going to end up f*cked. How much money do YOU think you need for upfront capital? Do you think there is a magic number so that the gahmen says, "Ahhhh... looks like Johnny very good... he's got $20,000 in paid up capital?"

No! That's bullshit. What does your business plan say?
  1. How much money will it cost you to get your company started in Singapore... all in?
  2. What are your anticipated revenues in year 1 through 5?
  3. What are your anticipated expenses in year 1 through 5?
  4. When is your anticipated break even date, the date that the company can support itself?
  5. How much money will you need to keep the company running until your break even date?
  6. How much money do you need to live until the company is profitable and can pay your salary?That's your food, your rent, your wife, school for the kiddies.

Bottom line: You say you have an income stream. You will have expenses. If you don't have enough capital to cover the difference between your income stream from your foreign company and your local company and personal costs, you're f*cked. You're f*cked because SPRING will see that your business plan is full of holes. And you're personally f*cked because you've set yourself up for failure by guaranteeing you will run out of money before the business is a go.[/quote]

I know what you mean, I made certain calculation for my personal cost plus for the company cost and of course I will need at least 6 -12 months to have my real sale in SG / SE Asia. From a capital perspective I might be able to add 1Y into the company till it peaks up, then it would be okay for the MoM to issue the EP ?

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Re: New Business - questions

Post by Strong Eagle » Wed, 14 Aug 2019 2:19 am

waky wrote:Although I understand that this was done before, do not want to come to the the country to abuse anything just want to live there for 1Y - 2Y while I really try to expend my future business.
The government is not interested in you. They don't want people who want to come for "1Y - 2Y". You are either here to build a business and be part of the community or you are a short termer. 1 to 2 years is very short term thinking.
waky wrote:I do not know if it helps, I'm Hungarian and Romanian. Although I understand what are you saying, I cannot change in this moment my nationality and it is what it is.

I know you can't change it. I am telling you that it may well count against you as there is nothing to distinguish you from your countrymen whom are trying to get in by less honorable means.
waky wrote:I do not do illegal stuff, the idea was till the business is picking up a usual sales cycle takes somewhere between 3-6 months if you know the customer. In this particular case, I have some connections in the region but building some trust and then eventually selling it it will take 6 - 9 months. Till then, in case I'm there I need to pay apartments, food etc hence I will work in parallel for this company giving advise so I can pay the bills. That was the idea.
And I have told you the reasons that won't work. You need to restructure the income coming in as an investment in the new business, not a salary you are earning from another company. You will doom your application, and I believe that strongly enough that I'd bet money on it. Tell them you're going to be making a salary from a foreign company and let me know how your EP goes.
waky wrote:I hope I understood correctly. Currently I have a legal entity in the Netherlands. Currently we are still developing the product, hence, we do not have any customers yet. Of course in the next 3-6 months it might change.
Basically what you are you saying is that I make myself one of the employee of my own company, open a subsidiary of the Dutch company in SG and detach myself in SG in order to grow the business.
In this case you are saying that I do not need anymore a local Director on a Accounting company to pay my taxes in SG ?
Essentially, yes. But, you said you are earning money from somewhere. Not that Dutch company?
Problems. That money needs to be run through a company and not paid to you directly. As long as it is paid to you directly, you are a private contractor. It will be hard to convince Singapore to grant you the right to run a business because TUNS of people who are private contractors want to come to Singapore. Singapore doesn't want them. You need to be already running a business, with your client paying your company and you receiving a salary. That is my advice and view.
waky wrote:I know what you mean, I made certain calculation for my personal cost plus for the company cost and of course I will need at least 6 -12 months to have my real sale in SG / SE Asia. From a capital perspective I might be able to add 1Y into the company till it peaks up, then it would be okay for the MoM to issue the EP ?
Have you got a business plan? Have you got evidence of the money to support you? You have created your break even analysis for 6 to 12 months? Which is it? 6 months or 12 months? One requires twice as much cash as the other. Do you have pro forma financials to show how your Singapore company will pay you so that you can live, in the absence of revenues? You don't have this, I'd make a bet against your success in getting an EP.

Edited to add: You need to stop thinking like some dude making a few coins contracting himself out, with some idea of taking a long term holiday in Singapore while pursuing a pipe dream, and start thinking like a businessman who has a business in a foreign country who wants to start a business in Singapore.

But, don't let me stop you. Go ahead and knock yourself out. One of those rent a director companies will be only too happy to take your money, then say, "Gee, we soooo sorry... we didn't know you wouldn't get your EP. We try again... only $4,000 more dollars."

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