I judge that they already prohibit such an idea. Here is what is going to get you.throwawaypep wrote:Hi all,
First off, let me thank the numerous contributors to this forum, i have learned a lot from you!
I hold a PEP, and i have opportunities to work as a freelance / contractor for Singapore companies. I know that you can't normally freelance if you are on an EP or PEP.
MoM doesn't care if have an employment relationship with any employer outside Singapore (i have verified this by calling them).
I'm thinking of incorporating an entity outside Singapore and invoicing my clients through that entity.
Would this plan for freelancing work?
Specifically, will MoM / ICA be fine with this, and do i risk running afoul of any labour / employment laws? From a taxation perspective, it seems that my income earned from this foreign entity will be treated as personal income tax, which i'll gladly pay
See, the only way you can declare your foreign income in Singapore is via an unregistered sole proprietorship. You file your business earnings on the SP sheet of you personal income tax.Who is not eligible
You are not eligible for the PEP if you are:
An Employment Pass holder under the sponsorship scheme.
A freelancer or foreigner who intends to work on a freelance-basis.
A sole proprietor, partner or where a director is also a shareholder in an ACRA-registered company.
A journalist, editor, sub-editor or producer.
Note: You are not allowed to start a business or conduct any form of entrepreneurial activity while on a PEP. If you intend to do so, you should apply for an EntrePass.
Whether working for your own SP is considered "employed" is a SWAG... I'd guess not, given the rules above. IF you were working for a Singapore registered firm, at a salary sufficient to cover your $144K, then I suppose you could venture off into your own activities... I understand that PEP's can do this while EP's cannot. Maybe you work out some kind of arrangement with a Singapore firm.Requirements of the pass
To keep holding a PEP, you must:
Not be unemployed in Singapore for more than 6 months at any time. Otherwise, you will need to cancel the pass.
Can't I declare my income as salary earned from a foreign corporation?Strong Eagle wrote: See, the only way you can declare your foreign income in Singapore is via an unregistered sole proprietorship. You file your business earnings on the SP sheet of you personal income tax.
Now you've got me confused. Which Singapore company is going to be signing the contract?throwawaypep wrote:The foreign corp will sign a contract with the Singapore company.
Strong Eagle wrote:You have no issues working for Singaporean firms from the UK. They simply pay you as a foreign contractor and they have their own set of corporate tax rules to follow regarding your tax treatment on the company books.
In light of what you have shared, i'm thinking of the following plan:Strong Eagle wrote: If you’re working for a Singapore entity that is not your own (ie, an arm’s length relationship)...
No, he doesn't need to have a registered company here. Let's first be clear that we are talking about arm's length transactions, ie, no shared ownership, no shared management or directorships.throwawaypep wrote:Thanks for the thorough explanation SE, i appreciate it!
You are right, i didn't know that you need a business entity in Singapore to provide goods and services in Singapore.
I scoured the forums even more over the last few days, and i saw this post you made in 2016: viewtopic.php?t=112275#p753513
Strong Eagle wrote:You have no issues working for Singaporean firms from the UK. They simply pay you as a foreign contractor and they have their own set of corporate tax rules to follow regarding your tax treatment on the company books.
Can a Singapore firm pay a UK resident as a foreign contractor? In this case, the foreign contractor is providing services in Singapore, so doesn't he need to register a company here? Or perhaps you meant that he will register a company here and provide services through it but will continue to reside and pay tax in the UK?
Here's a couple of thoughts about this plan.throwawaypep wrote:In light of what you have shared, i'm thinking of the following plan:Strong Eagle wrote: If you’re working for a Singapore entity that is not your own (ie, an arm’s length relationship)...
1. Set up an SG registered company (let's call it Raffles Consulting) in which i own no shares and hold no directorship.
2. Set up contracts between Raffles consulting and Singapore companies like Singtel and Starhub.
3. Hire employees in the UK or someplace outside SG to actually do the work.
4. Continue working at my current employer and keep my PEP. When i'm confident, leave my job and join Raffles Consulting. Assuming i can make 144k+ at Raffles Consulting, i won't have to apply for an EP or submit a business plan.
When i make the transition full time to Raffles Consulting, i likely won't be retaining the offshore contractors. Do you think demonstrating an "arm's length relationship" will be a difficult if I am the only employee of this company?
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