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Setting up of a company by an EP Holder

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MrBlueandWhiteCup
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Setting up of a company by an EP Holder

Postby MrBlueandWhiteCup » Sat, 12 Nov 2016 3:05 pm

Hi

This may have been posted in other threads as well and I did spend some time to find out about this but still not very clear. So, I am creating a new thread and hopefully the members can help, esp Strong Eagle, who has tonnes of knowledge in this area

Background - I recently finished my Msc from NTU and now looking to create a tech startup in Singapore. Currently, I am on EP.

I had spoken with a consultant regarding the procedure to go about starting a company while being on EP. Here is what he suggested,

It is completely possible for EP holder to start a company! Ideally, get a partner to work as local director but if not possible then the consultant will form company with his local resident director and apply for my EP in that new company. Once, the EP is approved the local director will resign and I will become the director of my company while being on EP in my startup company. He said, "you can wish to give salary to yourself or may not. Upto you"

He also mentioned that "be prepared to spend 3-4 months in the whole process as the EP will most likely get rejected in the 1st instance and we will have to go for appeal"

My questions:-
1. Is this the correct procedure? Leave aside the Entre Pass as the requirements are too strict there.
2. If the local resident director appointed by the consultant resigns and I am made the director (while being on EP in the same company) then who will sign all the legal documents and sales invoice? Me??
3. My team who will work on the product development are already on EP in Singapore. If, they want to join me as cofounders, will they get EP in the new startup? They need to be sure as they would not want to resign from their existing company and then apply for EP in my company coz then the risk is too high for them if the new EP is rejected.
4. If the cofounder EP is approved, then can he become a shareholder in the same company? Is it allowed?
5. Does the new startup have to necessarily give salary to them? Basically, they are cofounders and they would not be taking salary.

There are many questions like these but this should be enough to give all you guys an idea. Can you help?

Thanks in advance
MrBlue&WhiteCup

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Re: Setting up of a company by an EP Holder

Postby ComingSoon » Sun, 13 Nov 2016 6:17 pm

Hi,

Not an expert, but I think it'll be tough to do what you are suggesting. Here's why:

First, a company needs to be older than 6 months to apply for EP for the Director. Otherwise Entrepass is required.

Second, if your company is older than 6 months but younger than one year then MOM is going to want proof that your company is viable. The easiest thing to do is wait until 1 year of revenue can be declared, but you probably don't want to wait that long.

See https://notable.com.sg/definitive-guide ... singapore/.

Third, it's illegal to work for 2 companies at the same time on EP. I guess if you are using a representative director and NOT a director yourself then you might be able to skirt this rule, but I wouldn't recommend it. If MOM thinks you are acting in the capacity of a director while on EP with another firm then they could make life pretty rough for you.

Finally, to say that you can pay yourself a salary, or not is absurd. If you are on EP for your new company do you really think MOM will let you stay in SG if you have a token salary?

Your questions:
1. See above. This isn't easy. I would get a number of expert opinions before taking action.
2. If you are the Director then you are in charge.
3. They might be able to get EP, but perhaps not. It all depends on how viable MOM thinks your business is. If you had angel or government support then they might view it in a more positive light. Better to wait till their EP is approved before resigning the existing position.
4. Shareholders and EP are separate issues. Pretty much anyone can be a shareholder.
5. If they are on EP then they HAVE to have a salary. Why would MOM let them stay if they don't have a salary?

Good luck!!

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Re: Setting up of a company by an EP Holder

Postby Strong Eagle » Mon, 14 Nov 2016 3:44 am

ComingSoon wrote:Hi,

Not an expert, but I think it'll be tough to do what you are suggesting. Here's why:

First, a company needs to be older than 6 months to apply for EP for the Director. Otherwise Entrepass is required.


False. You can form a company and immediately apply for an EP for the director.

Second, if your company is older than 6 months but younger than one year then MOM is going to want proof that your company is viable. The easiest thing to do is wait until 1 year of revenue can be declared, but you probably don't want to wait that long.

See https://notable.com.sg/definitive-guide ... singapore/.


MoM's assessment of viability is based upon the experience of the applicant, the business plan, and the cash available to the company. 6 months and 1 year don't mean anything.

Third, it's illegal to work for 2 companies at the same time on EP. I guess if you are using a representative director and NOT a director yourself then you might be able to skirt this rule, but I wouldn't recommend it. If MOM thinks you are acting in the capacity of a director while on EP with another firm then they could make life pretty rough for you.


True - you can only be a director of a company for which your EP has been issued. Companies can and do have outside directors but the OP would be very hard pressed to make that case since he will be running the company.

Finally, to say that you can pay yourself a salary, or not is absurd. If you are on EP for your new company do you really think MOM will let you stay in SG if you have a token salary?
.

At the very least needs to pay at least the minimum salary required for an EP.

Your questions:
1. See above. This isn't easy. I would get a number of expert opinions before taking action.
2. If you are the Director then you are in charge.
3. They might be able to get EP, but perhaps not. It all depends on how viable MOM thinks your business is. If you had angel or government support then they might view it in a more positive light. Better to wait till their EP is approved before resigning the existing position.
4. Shareholders and EP are separate issues. Pretty much anyone can be a shareholder.
5. If they are on EP then they HAVE to have a salary. Why would MOM let them stay if they don't have a salary?

Good luck!!
[/quote]

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Re: Setting up of a company by an EP Holder

Postby Strong Eagle » Mon, 14 Nov 2016 4:09 am

MrBlueandWhiteCup wrote:Hi

This may have been posted in other threads as well and I did spend some time to find out about this but still not very clear. So, I am creating a new thread and hopefully the members can help, esp Strong Eagle, who has tonnes of knowledge in this area

Background - I recently finished my Msc from NTU and now looking to create a tech startup in Singapore. Currently, I am on EP.

I had spoken with a consultant regarding the procedure to go about starting a company while being on EP. Here is what he suggested,

It is completely possible for EP holder to start a company! Ideally, get a partner to work as local director but if not possible then the consultant will form company with his local resident director and apply for my EP in that new company. Once, the EP is approved the local director will resign and I will become the director of my company while being on EP in my startup company. He said, "you can wish to give salary to yourself or may not. Upto you"

He also mentioned that "be prepared to spend 3-4 months in the whole process as the EP will most likely get rejected in the 1st instance and we will have to go for appeal"


  1. Your consultant has the basic process correct.
  2. You had better pay yourself a salary. The obvious question is: How are you going to live and eat in Singapore without a salary? If you plan on living off savings until the company starts making money, then you need to put that money into the company as stock or a loan, then pay yourself a salary. You have to pay yourself the minimum amount required for the EP.
  3. An EP can start a company.
  4. An EP can only be a director of the company for which the EP is issued.
  5. If you do it right, you won't need to appeal an EP. I've written a lot on this subject. You need to have a business plan. You need your resume to reflect the skill sets that the company needs.

Be aware that the reason the Entrepass rules were tightened so much is that people were scamming the system, getting to live in Singapore by starting a company when they had no money, no skills, and no business sense to make the company go.

While MOM issues EP's to recently created companies, they are going to scrutinize your application carefully. If you have prior relevant experience, if you have a potential client base ready to line up, if you are in a 'desirable' business, and if you have the money to keep the company alive to break even, then _maybe_ you will get your EP.

My questions:-
1. Is this the correct procedure? Leave aside the Entre Pass as the requirements are too strict there.
2. If the local resident director appointed by the consultant resigns and I am made the director (while being on EP in the same company) then who will sign all the legal documents and sales invoice? Me??


You will be the managing director and will have responsibility for the company. You will also be the signatory to the bank accounts.

Be aware that a rented director from a consultant is a real live director and has all the duties and responsibilities of a company director, which cannot be reduced by agreement. Therefore, your rented director could screw you, and you could screw the director through illegal acts and failure to act in a proper manner.

Thus, virtually all rented director consultants will require that they do all your accounting, they will want to apply for EP's for your company, they will want to see monthly bank statements, and more... just to make sure you're not going to screw them.

3. My team who will work on the product development are already on EP in Singapore. If, they want to join me as cofounders, will they get EP in the new startup? They need to be sure as they would not want to resign from their existing company and then apply for EP in my company coz then the risk is too high for them if the new EP is rejected.


As with you, you must demonstrate that the co-founders are qualified, that you have the money to pay them, and that the skills you need from them can't be found in local Singaporeans. There is no guarantee that an EP will be approved and there is a substantial risk it will not.

Again, it comes down to whether or not MoM thinks you have a viable business, what your business plan looks like, what their resumes look like, and how much money you have to sustain yourself and the business until it becomes profitable.

4. If the cofounder EP is approved, then can he become a shareholder in the same company? Is it allowed?


The person can be a shareholder regardless of whether they have an EP or not.

5. Does the new startup have to necessarily give salary to them? Basically, they are cofounders and they would not be taking salary.

There are many questions like these but this should be enough to give all you guys an idea. Can you help?

Thanks in advance
MrBlue&WhiteCup


Your failure to pay salaries will be the kiss of death for your entire idea. How are you and these people you want to hire as co-founders going to live without a salary? How will you meet minimum salary requirements for an EP without actually paying a salary?

How are you going to avoid looking like (to MoM) a bunch of bums with an idea but no money and no knowledge as to how to run a business.

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Re: Setting up of a company by an EP Holder

Postby ComingSoon » Mon, 14 Nov 2016 8:30 am

Strong Eagle wrote:
ComingSoon wrote:Hi,

Not an expert, but I think it'll be tough to do what you are suggesting. Here's why:

First, a company needs to be older than 6 months to apply for EP for the Director. Otherwise Entrepass is required.


False. You can form a company and immediately apply for an EP for the director.

Second, if your company is older than 6 months but younger than one year then MOM is going to want proof that your company is viable. The easiest thing to do is wait until 1 year of revenue can be declared, but you probably don't want to wait that long.

See https://notable.com.sg/definitive-guide ... singapore/.


I stand corrected. Apologies to the OP.

On https://www.guidemesingapore.com/reloca ... -entrepass they state that a company less than 6 months old can apply for an EP or Entrepass.

I would say however that MOM is going to seriously scrutinize any application from a brand new company. If you visit the entrepass page they are indicating that companies less than 6 months old should go the entrepass route. No one in their right mind would go for entrepass over an EP if they didn't need to.

If you apply for an EP right after starting your company (pre-revenue) then one of the easiest ways they can evaluate your company would be your paid up capital. I would try to make this as high as possible so they know you can support operations for the duration of your EP.

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Re: Setting up of a company by an EP Holder

Postby MrBlueandWhiteCup » Tue, 15 Nov 2016 1:10 pm

Hi Guys!

Thanks for helping out. Here is what I understand. Please correct if I am getting it wrong

1. Key Requirement to set up a company are:
a. At least one shareholder (individual or corporate entity)
b. One resident director. Can be a citizen, PR or an existing EP holder/Entrepass holder.
c. One company secretary
d. Paid up capital
e. Physical address
f. Company Bank account

2. The resident director need not be the shareholder. Full shareholding can rest with the foreigner.

3. An EP Holder can open a Pte Ltd and apply for EP in his company and become director. No need for any other local director or anything. Correct? Technically, would that mean that I can form a company with another EP holder also?

4. The founder or cofounders must have to be given salary from the new company accounts. This means that if they wished to sustain themselves on personal savings then those savings must be transferred in the company’s paid up capital.

5. The salary must match the minimum level set up MOM for EP, which is $3600.

6. For a startup to apply for EP, a business plan is to be presented detailing the core business proposition, funding raised from any source. If a letter of intent can be arranged from any prospective client/customer mentioning that they would be interested in your product then it will help the business case.

7. There is no limit to the number of EP that the startup company can apply. If the business plan is good with strong paid up capital then 2-3 EPs can be approved.

Appreciate your comments on the following:-

1. It is like a chicken and the egg situation for me. I am on EP with a local company already. But I want to resign and fund my startup with my friend as a cofounder. Do I need to first resign from my local company and then open startup and immediately apply for new EP? OR I register my new company with ACRA first, and immediately apply for new EP. When the new EP is approved then resign from my local company?

2. When do they ask to submit the business plan, angel funding details, letter of interest from prospective clients etc? Is it during the company formation with ACRA or during application for my EP as director?

3. Can the angel investor’s address be used as the new company address? Alternatively, is the use of residential address allowed as a business address? Will residential address be viewed negatively?

4. Since, it is startup the salary will be far less than what we are currently earning. Would MOM object to that?

5. Strong Eagle I saw that you put good emphasis on hiring a very experienced consultant and not a Muppet. Would you recommend some of them?

Thanks in advance!

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Re: Setting up of a company by an EP Holder

Postby MrBlueandWhiteCup » Thu, 17 Nov 2016 11:15 am

Hi Strong Eagle,

I reviewed your post on EntrePass and got to understand the process better. So, I am replying to my earlier post.



Thanks for helping out. Here is what I understand. Please correct if I am getting it wrong

1. Key Requirement to set up a company are:
a. At least one shareholder (individual or corporate entity)
b. One resident director. Can be a citizen, PR or an existing EP holder/Entrepass holder.
c. One company secretary
d. Paid up capital
e. Physical address
f. Company Bank account

2. The resident director need not be the shareholder. Full shareholding can rest with the foreigner. – STILL NOT CLEAR

3. An EP Holder can open a Pte Ltd and apply for EP in his company and become director. No need for any other local director or anything. Correct? Technically, would that mean that I can form a company with another EP holder also? - EXISTING EP HOLDER DO NEED A RESIDENT DIRECTOR. ANOTHER EP HOLDER CANNOT BE USED AS A RESIDENT DIRECTOR AS BY DEFINITION BEING A DIRECTOR IS CONSIDERED A FULL TIME JOB

4. The founder or cofounders must have to be given salary from the new company accounts. This means that if they wished to sustain themselves on personal savings then those savings must be transferred in the company’s paid up capital. A FULL BUSINESS PLAN SHOULD DEFINE THE PROJECTED REVENUE AND EXPENSES

5. The salary must match the minimum level set up MOM for EP, which is $3600. THIS IS THE MINIMUM SALARY LEVEL. FOR SUSTAINING A FAMILY OF 3, A SALARY LEVEL OF 6-7K IS IMPORTANT

6. For a startup to apply for EP, a business plan is to be presented detailing the core business proposition, funding raised from any source. If a letter of intent can be arranged from any prospective client/customer mentioning that they would be interested in your product then it will help the business case. DETAILED DOCUMENTS AS MENTIONED IN PREVIOUS POSTS BY STRONG EAGLE ARE NEEDED

7. There is no limit to the number of EP that the startup company can apply. If the business plan is good with strong paid up capital then 2-3 EPs can be approved. IF THE BUSINESS PLAN IS STRONG TO SHOW THST 2-3 EPs ARE REQUIRED TO GENERATE LOCAL EMPLOYMENT THEN MOM CAN GRANT

Appreciate your comments on the following:-

1. It is like a chicken and the egg situation for me. I am on EP with a local company already. But I want to resign and fund my startup with my friend as a cofounder. Do I need to first resign from my local company and then open startup and immediately apply for new EP? OR I register my new company with ACRA first, and immediately apply for new EP. When the new EP is approved then resign from my local company? – OPEN PTE COMPANY WITH A LOCAL RESIDENT AND THEN APPLY FOR EP WITH STRONG BUSINESS PLAN? I STILL NEED ADVISE ON THE SHAREHOLDING PATTERN? WILL ALL SHAREHOLDING BE IN THE NAME OF THE RESIDENT DIRECTOR?

2. When do they ask to submit the business plan, angel funding details, letter of interest from prospective clients etc? Is it during the company formation with ACRA or during application for my EP as director? NEED CONFIRMATION IF THIS IS REQUIRED DURING EP APPLICATION?

3. Can the angel investor’s address be used as the new company address? Alternatively, is the use of residential address allowed as a business address? Will residential address be viewed negatively? NEED CONFIRMATION

4. Since, it is startup the salary will be far less than what we are currently earning. Would MOM object to that? NEED CONFIRMATION

5. Strong Eagle I saw that you put good emphasis on hiring a very experienced consultant and not a Muppet. Would you recommend some of them? CONFUSED AS IN SOME POSTS YOU (STRONG EAGLE) HAVE ADVISED AGAINST IT AND EVEN MENTIONED THAT THIS CAN BE VIEWED NEGATIVELY, WHILE IN OTHER POSTS YOU HAVE MENTIONED THAT THERE ARE SOME GOOD AGENCIES TO WORK THIS OUT

Thanks in advance!

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Re: Setting up of a company by an EP Holder

Postby Strong Eagle » Sat, 19 Nov 2016 4:00 am

MrBlueandWhiteCup wrote:Hi Strong Eagle,

I reviewed your post on EntrePass and got to understand the process better. So, I am replying to my earlier post.



Thanks for helping out. Here is what I understand. Please correct if I am getting it wrong

1. Key Requirement to set up a company are:
a. At least one shareholder (individual or corporate entity)
b. One resident director. Can be a citizen, PR or an existing EP holder/Entrepass holder.
c. One company secretary
d. Paid up capital
e. Physical address
f. Company Bank account

2. The resident director need not be the shareholder. Full shareholding can rest with the foreigner. – STILL NOT CLEAR


Shareholders and directors are completely different entities. Shareholders own the company by purchasing shares. Your rights as a shareholder to the profits of the company are determined by the number of shares and the class of stock you own. All stock market investors own a part of the company but have absolutely no say in how the company is run... except for appointing directors.

Directors run the company. Directors are appointed to their positions by shareholders in a meeting called for that purpose. Depending upon the memorandum of incorporation, this usually requires a simple majority vote, sometimes a two thirds majority vote.

Directors can be shareholders or they can own no stock whatsoever. For small companies, the director and shareholder are often one and the same... the shareholder who has 100 percent of the stock and has been appointed director by himself as shareholder.

Singapore doesn't care whether the shareholders are local or foreign. For a non exempt private limited, foreign companies can also hold shares in a local Singapore company. Exempt private limited companies shareholders must all be real persons, foreign or otherwise, not legal entities.

Singapore also doesn't care if directors are local or foreign EXCEPT THAT there must always be one locally resident director. See more below.

3. An EP Holder can open a Pte Ltd and apply for EP in his company and become director. No need for any other local director or anything. Correct?


No, not correct. To qualify as locally resident director, you must be one of the following:

  1. Singapore citizen
  2. Singapore permanent resident
  3. An EP holder where the EP is issued by the company for which the EP holder is a director

Your problem is that you, as an EP are free to form a company and become its shareholder, but, because your EP is not with the company you just formed, you cannot be its director.

If you give up your EP in order to apply for an EP with your newly formed company, you cannot be a locally resident director because you have no EP that makes you locally resident.

Therefore, the only way to become a director of your company is to form the company with a locally resident director, and have that director apply for your EP for the company. Most people do not want the legal liability associated with being a director of a company they know nothing about, and therefore, you will probably have to rent a director from one of the companies that do this. It will not be cheap.

Technically, would that mean that I can form a company with another EP holder also? - EXISTING EP HOLDER DO NEED A RESIDENT DIRECTOR. ANOTHER EP HOLDER CANNOT BE USED AS A RESIDENT DIRECTOR AS BY DEFINITION BEING A DIRECTOR IS CONSIDERED A FULL TIME JOB


Again, you cannot be a local director of a company unless your EP is with that company, so YES... another EP holder in another company cannot be used as a resident director. Only a citizen or PR can be the initial director.

4. The founder or cofounders must have to be given salary from the new company accounts. This means that if they wished to sustain themselves on personal savings then those savings must be transferred in the company’s paid up capital. A FULL BUSINESS PLAN SHOULD DEFINE THE PROJECTED REVENUE AND EXPENSES


Your business plan should include pro forma financial statements for project profit and loss for at least 3 years, preferably 5. Everybody knows that the numbers are made up, and, if you make up ridiculous numbers, you'll be denied your EP. Consider: You invent a better toothbrush. In your pro forma financials you say you are going to sell 3 million into Singapore because they are so great. Everyone knows this is bullshit... you'll never get that kind of market penetration or your EP.

Your business plan needs a lot more information as well so that the authorities know you are competent. See http://www.herberts.org/miscdocs/Sample ... ntents.pdf.

You have to remember that it used to be very easy to start a company in Singapore. Then all sorts of people started abusing the system by forming companies as an easy way to get a free ride into Singapore. They had no experience, they had no money, and once in Singapore, they tended to disappear, or find a job with another company.

So the authorities cracked down. If you cannot demonstrate a real business, and you cannot demonstrate experience, and you cannot demonstrate the likelihood of obtaining customers, you will not be approved for an EP. That's life these days.

5. The salary must match the minimum level set up MOM for EP, which is $3600. THIS IS THE MINIMUM SALARY LEVEL. FOR SUSTAINING A FAMILY OF 3, A SALARY LEVEL OF 6-7K IS IMPORTANT


Two things: First, you must pay enough to meet the minimum requirements or you can't qualify for an EP. Second, the authorities can easily see how much you are making right now. So, if you actually have savings to be able to live, then putting that money into the company and paying yourself is a way to show that you have sufficient resources.

If you're not going to pay yourself anything, and you don't have any medical insurance, then the gahmen is going to be real concerned that you will become a ward of the state, and they will probably prefer that you go do your startup in your home country. Again, it's because of past abuses... you must demonstrate adequate finances to be considered.

6. For a startup to apply for EP, a business plan is to be presented detailing the core business proposition, funding raised from any source. If a letter of intent can be arranged from any prospective client/customer mentioning that they would be interested in your product then it will help the business case. DETAILED DOCUMENTS AS MENTIONED IN PREVIOUS POSTS BY STRONG EAGLE ARE NEEDED


Yes - and as per this business plan summary - http://www.herberts.org/miscdocs/Sample ... ntents.pdf

7. There is no limit to the number of EP that the startup company can apply. If the business plan is good with strong paid up capital then 2-3 EPs can be approved. IF THE BUSINESS PLAN IS STRONG TO SHOW THST 2-3 EPs ARE REQUIRED TO GENERATE LOCAL EMPLOYMENT THEN MOM CAN GRANT


Technically, this is correct but MoM will be looking closely at why you are not hiring locals. So, if three or four of you are planning to create a new product, then it is essential that you business plan detail how you have been working together, how your team has the special knowledge to create the product, and why/how the local population lacks the skills for the project. Otherwise, it may look like you are just creating a company so your buddies can get an easy EP.

This is why a well thought out business plan is so important. Money, business sense, special knowledge.

Appreciate your comments on the following:-

1. It is like a chicken and the egg situation for me. I am on EP with a local company already. But I want to resign and fund my startup with my friend as a cofounder. Do I need to first resign from my local company and then open startup and immediately apply for new EP? OR I register my new company with ACRA first, and immediately apply for new EP. When the new EP is approved then resign from my local company? – OPEN PTE COMPANY WITH A LOCAL RESIDENT AND THEN APPLY FOR EP WITH STRONG BUSINESS PLAN? I STILL NEED ADVISE ON THE SHAREHOLDING PATTERN? WILL ALL SHAREHOLDING BE IN THE NAME OF THE RESIDENT DIRECTOR?


There is no "chicken and egg" situation. You would follow a process similar to this:

  1. Form your private limited with you as the single shareholder. You only need one dollar of paid up capital and unless there is a reason for more paid up capital (impress clients, mainly), that is all you will ever need. Do ensure that your memorandum of incorporation allows the company to issue several hundred thousand shares if it wishes to in the future.
  2. Hire your rented director. This rented director will perform several functions, including:
  3. Open a bank account. Your rented director will provide the directors resolution that will allow you to be the signatory on the account.
  4. Put some money into the account... the more the better. Update your financial statements to show that you have made loans to the company, that the company will eventually pay back from profits.
  5. Have your director file for an EP for you. File this manually so you can include your business plan and supporting documentation as there is no easy way to file all this stuff online. If your rented director does file online it will probably be rejected... then you appeal manually with all the documents.
  6. IF you are approved to become the director, you will get an IPA. Terminate employment with your current employer and go collect your new EP. You can't have two EP's at the same time, so make sure you're new one is approved, then resign and hand in old EP, then collect new EP.
  7. Register yourself as the new managing director of your company and fire your rented director.

Meanwhile:

  1. If your co-founders are going to dump money into the company, execute a loan agreement with them so that they become creditors to the company. Put their money in the bank and update your financial statements.
  2. Determine how you are going to participate in profits. For example, if you are going to divide everything 50/50, then your co-founder and you will have an equal number of shares. Have your co-founder buy in and put her/his one dollar in the bank.
  3. Now apply for an EP for your co-founder. With luck you'll be able to work with the same person that granted your EP, and, be prepared for justifications as I stated earlier.
  4. If your co-founder EP is granted, then she/he resigns from current company and picks up new EP just as you did.
  5. If your co-founder does not get EP, then pay back the loan, buy back the shares.

2. When do they ask to submit the business plan, angel funding details, letter of interest from prospective clients etc? Is it during the company formation with ACRA or during application for my EP as director? NEED CONFIRMATION IF THIS IS REQUIRED DURING EP APPLICATION?


They never "ask". They don't give a shit. They are setup to process EP's from established companies. You must submit your documentation with your EP, then work it through the system.

3. Can the angel investor’s address be used as the new company address? Alternatively, is the use of residential address allowed as a business address? Will residential address be viewed negatively? NEED CONFIRMATION


What angel investor? In any case, the answer is no, and investor's address ,aka, a shareholder, should not be used as the address. Residential addresses can be used, probably won't make a lot of difference... BUT... if you are a sole director, you are required by law to have an outside secretary... that would be the best address to use. Otherwise, use your address.

4. Since, it is startup the salary will be far less than what we are currently earning. Would MOM object to that? NEED CONFIRMATION


Not really... in fact, you could feature it in your business plan. Note your current high salary as evidence of how skilled and experienced you are. Note that you are taking the minimum salary necessary to support yourself in order to conserve cash in the company. Note that your salary will rise as profitability rises. Salaries of all people need to be in your pro forma statements.

5. Strong Eagle I saw that you put good emphasis on hiring a very experienced consultant and not a Muppet. Would you recommend some of them? CONFUSED AS IN SOME POSTS YOU (STRONG EAGLE) HAVE ADVISED AGAINST IT AND EVEN MENTIONED THAT THIS CAN BE VIEWED NEGATIVELY, WHILE IN OTHER POSTS YOU HAVE MENTIONED THAT THERE ARE SOME GOOD AGENCIES TO WORK THIS OUT

Thanks in advance!


They are ALL muppets. Your big problem is that you will need to find a director to get your company started up. It used to be that any CPA firm in town would provide a director, and for cheap. Not any more. You will have to rent a director from a firm that specializes in doing this.

You will pay for the director. They will make you use their accounting services so they can be sure that you are not doing anything illegal. They will want to file all your EP's to make sure you're not trying to pull a fast one. They will insist on filing all legal documents and tax returns. They will do all these things because they want to know that you will not screw the rented director and leave him/her civilly or criminally liable. You will have to pay for each of these services.

I don't recommend any of these services because I've never used one. My experience with them is that they are all barely functional... they know the process but will be pretty useless in handling appeals because they are actually pretty non creative in problem solving.

MrBlueandWhiteCup
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Re: Setting up of a company by an EP Holder

Postby MrBlueandWhiteCup » Wed, 23 Nov 2016 12:59 pm

@Strong Eagle - Thank you for the detailed revert. Really appreciate it!
I have been busy for last 3 days finalising the product design with my co-founder. After your detailed talk I now have better clarity and can have a more fruitful discussion with the CS tomorrow. Let's see how his works out for me!

qiqi20
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Re: Setting up of a company by an EP Holder

Postby qiqi20 » Tue, 24 Jan 2017 10:32 am

ComingSoon wrote:Hi,

Not an expert, but I think it'll be tough to do what you are suggesting. Here's why:

First, a company needs to be older than 6 months to apply for EP for the Director. Otherwise Entrepass is required.

Second, if your company is older than 6 months but younger than one year then MOM is going to want proof that your company is viable. The easiest thing to do is wait until 1 year of revenue can be declared, but you probably don't want to wait that long.

See https://notable.com.sg/definitive-guide ... singapore/.

Third, it's illegal to work for 2 companies at the same time on EP. I guess if you are using a representative director and NOT a director yourself then you might be able to skirt this rule, but I wouldn't recommend it. If MOM thinks you are acting in the capacity of a director while on EP with another firm then they could make life pretty rough for you.

Finally, to say that you can pay yourself a salary, or not is absurd. If you are on EP for your new company do you really think MOM will let you stay in SG if you have a token salary?

Your questions:
1. See above. This isn't easy. I would get a number of expert opinions before taking action.
2. If you are the Director then you are in charge.
3. They might be able to get EP, but perhaps not. It all depends on how viable MOM thinks your business is. If you had angel or government support then they might view it in a more positive light. Better to wait till their EP is approved before resigning the existing position.
4. Shareholders and EP are separate issues. Pretty much anyone can be a shareholder.
5. If they are on EP then they HAVE to have a salary. Why would MOM let them stay if they don't have a salary?

Good luck!!


I found a reliable resource that you should check out: http://www.singaporelawwatch.sg/slw/att ... oyment.pdf

An EP holder is only allowed to work for the employer as specified on his EP.
The same EP holder can also be appointed to the Board of Directors of the
employer without having to notify the MOM. S Pass and Work Permit holders
are not allowed to be appointed to the Board of Directors of any company in
Singapore.
It is also possible for the EP holder to take up secondary directorship positions
in other companies. In the past, we were aware of the administrative guideline
that the MOM needs to be notified and their approval sought if the EP holder
is to take up such secondary roles but this was not widely publicised. We had
previously assisted clients to submit various documents to seek MOM's
approval. The LOC will be granted to the EP holder in the event of an
approval.

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Re: Setting up of a company by an EP Holder

Postby MrBlueandWhiteCup » Fri, 26 May 2017 1:59 pm

Have your director file for an EP for you. File this manually so you can include your business plan and supporting documentation as there is no easy way to file all this stuff online. If your rented director does file online it will probably be rejected... then you appeal manually with all the documents.


@Strong Eagle - For filing of EP, MOM says only Sponsorship Form and education certificates are required. My question is - How do you submit other documents like Business Plan, Financial Statement, Product PPT? Does the officer at the counter accept all other information? Is there another way of going about it? Am I missing something??

I understand if other documents are being submitted then I would require a covering letter, explaining all the supporting documents. Is there a specific format that you would recommend??

MrBlueandWhiteCup
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Re: Setting up of a company by an EP Holder

Postby MrBlueandWhiteCup » Fri, 26 May 2017 2:36 pm

Just Checked on MOM site for manual submission for EP. Here, is what it says - "Manual Submission is only for companies not registered in Singapore"

Is it True? Have they changed the rule? How to submit all the supporting documents?

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Re: Setting up of a company by an EP Holder

Postby ecureilx » Fri, 26 May 2017 8:50 pm

MrBlueandWhiteCup wrote:Just Checked on MOM site for manual submission for EP. Here, is what it says - "Manual Submission is only for companies not registered in Singapore"

Is it True? Have they changed the rule? How to submit all the supporting documents?

You submit supporting documents electronically if asked.

What did I miss ?

Mom been discouraging manual submission for so long .. like 10 years ?

MrBlueandWhiteCup
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Re: Setting up of a company by an EP Holder

Postby MrBlueandWhiteCup » Mon, 29 May 2017 12:13 pm

ecureilx wrote:
MrBlueandWhiteCup wrote:Just Checked on MOM site for manual submission for EP. Here, is what it says - "Manual Submission is only for companies not registered in Singapore"

Is it True? Have they changed the rule? How to submit all the supporting documents?

You submit supporting documents electronically if asked.

What did I miss ?

Mom been discouraging manual submission for so long .. like 10 years ?


From what I know and have read on this forum, the supporting documents (financial sheets, business plan etc) cannot be submitted online. Without these documents EP will be rejected as it is a startup company with no product or financial revenue.

Can we not submit the EP form manually?


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