Singapore Expats

Company in SG or HK?

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gpy
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Company in SG or HK?

Post by gpy » Fri, 17 May 2024 6:35 pm

Hi,

I am in SG under DP, my partner has an EP.
Since it is hard to get a new job I plan to start a freelance activity in project management consulting.
Initially I wanted to register a Pte. Ltd. but the whole thing about the visa worries me.

-I start with no capital.
-I plan to take no salaries for a few months and to reinvest all the incomes back in the company. => so I can't apply for EP nor EntrePass due to salary threshold
-I do not plan to hire anyone. (Freelance)


Hence my questions:
1- If I exclusively work with companies outside of SG (UAE, US, EU) and since I will be the sole owner of my company, my understanding is that I don't need any WorkPass (nor to hire myself) to be able to sign contracts and to do the job. Right or Wrong?
2- What would be the maintenance cost? I understand we still need to hire a local secretary? Do I need to pay someone else full-time all year long?
3- What happen if we leave SG? Can I still operate my company from abroad, fully remotely?

Or should I incorporate in HK? I have no ties with HK, which bothers me. Meanwhile I have lived in SG for 7y, I know the system here and who to talk to.

Thanks ~
by Strong Eagle » Fri, 17 May 2024 11:59 pm
gpy wrote:
Fri, 17 May 2024 6:35 pm
Hi,

I am in SG under DP, my partner has an EP.
Since it is hard to get a new job I plan to start a freelance activity in project management consulting.
Initially I wanted to register a Pte. Ltd. but the whole thing about the visa worries me.

-I start with no capital.
-I plan to take no salaries for a few months and to reinvest all the incomes back in the company. => so I can't apply for EP nor EntrePass due to salary threshold
-I do not plan to hire anyone. (Freelance)


Hence my questions:
1- If I exclusively work with companies outside of SG (UAE, US, EU) and since I will be the sole owner of my company, my understanding is that I don't need any WorkPass (nor to hire myself) to be able to sign contracts and to do the job. Right or Wrong?
2- What would be the maintenance cost? I understand we still need to hire a local secretary? Do I need to pay someone else full-time all year long?
3- What happen if we leave SG? Can I still operate my company from abroad, fully remotely?

Or should I incorporate in HK? I have no ties with HK, which bothers me. Meanwhile I have lived in SG for 7y, I know the system here and who to talk to.

Thanks ~
I'm afraid that you have confused working for a company that has no physical presence in Singapore with contracting into a company that has no physical presence in Singapore, via your own company or sole proprietorship.

Yes, the line I'm talking about here is fine... but given my understanding of how Singapore does things, this is the conundrum you face:

a) You can be EMPLOYED by a foreign company that has no physical presence and does no business in Singapore. Example: You could be working remotely for the 40 person firm, Acme Accounting, located in Houston, Texas. They pay you a salary or hourly rate into your Singapore bank account or any other bank account anywhere in the world.

You do not need a company because you are employed by another company and you are working as an individual. You report your income to IRAS since you are earning your income as a permanent resident in Singapore. IRAS has confirmed this to me in writing and I expect that they would do the same for you. The bottom line is that your foreign employment in no way affects the ability of a Singaporean to get a job.

b) You can CONTRACT into companies, as a Singapore sole proprietor or pte ltd, that have no physical presence in Singapore nor do any business in Singapore but now your status has changed. You are no longer employed by your foreign company, you work for your own local company, and therefore, you need to get the appropriate work passes to run a business in Singapore. Why? Because there is no guarantee and no way to stop you from also contracting with local businesses, which means that you do, in fact, potentially affect the jobs of Singaporeans.

So, there is the fine line that I mentioned. I suppose that you could approach foreign companies as an individual person and sign a contract as an individual person, to be considered to be employed remotely by that company. However, doing it this way means that you're not running a business and therefore not able to take business expenses such as travel, office space, etc. You can only report your remote income to IRAS.

It has been more than 10 years since I ended my own project management company, with offices in Singapore, Hong Kong, Thailand, Malaysia, and Australia so things have changed somewhat. I understand that a DP can no longer start a business as a sole proprietor and work on a LOC but must create a pte ltd and apply for an EP. This is the hurdle you face to start your own consulting business.

You say you start with no capital. That's not the way to go. You know that you have living expenses that must be paid. So, you loan your company the money necessary to pay your salary to meet the EP. It's a wash for you personally... loan the company money and get it back in salary... but it meets the financial requirements of starting a business. (Parenthetically, if you're not planning on earning enough money each month to cover your EP salary, then you really do fall through the cracks when it comes to Singapore business regulations... there is no room for part timers... and again, this goes to the heart of EP's... not to give foreigners a job, parttime or otherwise, but to attract specifically needed skills).

As for your other questions: Yes, as a sole director, you must have a separate corporate secretary registered with the ACRA (you'd want one anyway unless you know all the ins and outs of maintaining corporate records per the ACRA).

Yes, you can continue to run your Singapore company remotely, should you leave, BUT, when you leave you must:

a) Have a locally resident director, and this is not easy to do because they have criminal and civil responsibility for the acts of your company

b) You become a non-resident director and your remuneration is automatically taxed at 24% and withheld BEFORE the money is sent to you.

I'm much more fuzzy on Hong Kong. I know you can be a non-resident director there without tax consequences. I don't think you need a normally resident director but you do need a local registered agent. You'll need to appear in person to open a bank account. You will have a hard time opening a Singapore bank account for a foreign registered company... money laundering and all that.

Hope this helps.
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Re: Company in SG or HK?

Post by Strong Eagle » Fri, 17 May 2024 11:59 pm

gpy wrote:
Fri, 17 May 2024 6:35 pm
Hi,

I am in SG under DP, my partner has an EP.
Since it is hard to get a new job I plan to start a freelance activity in project management consulting.
Initially I wanted to register a Pte. Ltd. but the whole thing about the visa worries me.

-I start with no capital.
-I plan to take no salaries for a few months and to reinvest all the incomes back in the company. => so I can't apply for EP nor EntrePass due to salary threshold
-I do not plan to hire anyone. (Freelance)


Hence my questions:
1- If I exclusively work with companies outside of SG (UAE, US, EU) and since I will be the sole owner of my company, my understanding is that I don't need any WorkPass (nor to hire myself) to be able to sign contracts and to do the job. Right or Wrong?
2- What would be the maintenance cost? I understand we still need to hire a local secretary? Do I need to pay someone else full-time all year long?
3- What happen if we leave SG? Can I still operate my company from abroad, fully remotely?

Or should I incorporate in HK? I have no ties with HK, which bothers me. Meanwhile I have lived in SG for 7y, I know the system here and who to talk to.

Thanks ~
I'm afraid that you have confused working for a company that has no physical presence in Singapore with contracting into a company that has no physical presence in Singapore, via your own company or sole proprietorship.

Yes, the line I'm talking about here is fine... but given my understanding of how Singapore does things, this is the conundrum you face:

a) You can be EMPLOYED by a foreign company that has no physical presence and does no business in Singapore. Example: You could be working remotely for the 40 person firm, Acme Accounting, located in Houston, Texas. They pay you a salary or hourly rate into your Singapore bank account or any other bank account anywhere in the world.

You do not need a company because you are employed by another company and you are working as an individual. You report your income to IRAS since you are earning your income as a permanent resident in Singapore. IRAS has confirmed this to me in writing and I expect that they would do the same for you. The bottom line is that your foreign employment in no way affects the ability of a Singaporean to get a job.

b) You can CONTRACT into companies, as a Singapore sole proprietor or pte ltd, that have no physical presence in Singapore nor do any business in Singapore but now your status has changed. You are no longer employed by your foreign company, you work for your own local company, and therefore, you need to get the appropriate work passes to run a business in Singapore. Why? Because there is no guarantee and no way to stop you from also contracting with local businesses, which means that you do, in fact, potentially affect the jobs of Singaporeans.

So, there is the fine line that I mentioned. I suppose that you could approach foreign companies as an individual person and sign a contract as an individual person, to be considered to be employed remotely by that company. However, doing it this way means that you're not running a business and therefore not able to take business expenses such as travel, office space, etc. You can only report your remote income to IRAS.

It has been more than 10 years since I ended my own project management company, with offices in Singapore, Hong Kong, Thailand, Malaysia, and Australia so things have changed somewhat. I understand that a DP can no longer start a business as a sole proprietor and work on a LOC but must create a pte ltd and apply for an EP. This is the hurdle you face to start your own consulting business.

You say you start with no capital. That's not the way to go. You know that you have living expenses that must be paid. So, you loan your company the money necessary to pay your salary to meet the EP. It's a wash for you personally... loan the company money and get it back in salary... but it meets the financial requirements of starting a business. (Parenthetically, if you're not planning on earning enough money each month to cover your EP salary, then you really do fall through the cracks when it comes to Singapore business regulations... there is no room for part timers... and again, this goes to the heart of EP's... not to give foreigners a job, parttime or otherwise, but to attract specifically needed skills).

As for your other questions: Yes, as a sole director, you must have a separate corporate secretary registered with the ACRA (you'd want one anyway unless you know all the ins and outs of maintaining corporate records per the ACRA).

Yes, you can continue to run your Singapore company remotely, should you leave, BUT, when you leave you must:

a) Have a locally resident director, and this is not easy to do because they have criminal and civil responsibility for the acts of your company

b) You become a non-resident director and your remuneration is automatically taxed at 24% and withheld BEFORE the money is sent to you.

I'm much more fuzzy on Hong Kong. I know you can be a non-resident director there without tax consequences. I don't think you need a normally resident director but you do need a local registered agent. You'll need to appear in person to open a bank account. You will have a hard time opening a Singapore bank account for a foreign registered company... money laundering and all that.

Hope this helps.

gpy
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Re: Company in SG or HK?

Post by gpy » Sun, 19 May 2024 3:03 pm

Thanks @Strong Eagle, that's quite helpful :)

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Re: Company in SG or HK?

Post by Strong Eagle » Tue, 21 May 2024 1:30 am

I refer you to this link. Looks like hiring a Singaporean has to be part of the LOC game.\

https://www.mom.gov.sg/passes-and-permi ... ligibility

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Re: Company in SG or HK?

Post by Strong Eagle » Tue, 21 May 2024 1:37 am

I'm not advocating this, and, were you to create a Hong Kong company, you would indeed be working remotely for a company that does no business in Singapore. It would be an interesting way for DP's to work in Singapore without needing a work permit, and really, would not be violating the intent or the spirit of the regulations that allow DP's to work for remote companies without a work pass. Perhaps more in depth research into forming and running a Hong Kong business would be warranted... the Chinese thugs running Hong Kong, notwithstanding.

Malaysia might be another place to incorporate although their corporate tax rate is 24 percent and I don't know if they have any relief like Singapore does.
I'm much more fuzzy on Hong Kong. I know you can be a non-resident director there without tax consequences. I don't think you need a normally resident director but you do need a local registered agent. You'll need to appear in person to open a bank account. You will have a hard time opening a Singapore bank account for a foreign registered company... money laundering and all that.

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