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Tax residency

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fievelnewworld
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Tax residency

Postby fievelnewworld » Wed, 26 Feb 2014 3:15 pm

Hello,
I am following my girlfriend to Singapore.
She has got a job there with a Singaporean company.
My current company is HQd and located in Europe.
They are ok for me to relocate personally in Singapore, but not willing to set up and/or cover expenses of a subsidiary or rep office (the reason being there is no economic activity for them in SG)
The company's activity is food production, and I am in charge of selling all over the world (except Singapore)
Basically, a lot of overseas travelling for me, and no professional activity related to Singapore: I just need my laptop and phone and can operate from my home in Singapore.
Could you please advise me what kind of visa would match my profile, so I can benefit from tax residency in Singapore (more than 183 days in the country)
Is a long term visa pass ok?
Thank you

Beeroclock
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Postby Beeroclock » Wed, 26 Feb 2014 4:01 pm

I will let others comment on the visa/immigration side (if you were married could try for Dependent's Pass and Letter of Consent, but I don't think that's possible in your case).

However just to point out that tax residency is different from the visa/immigration requirement. You also need to consider your home country's rules re: tax residency/non-residency. E.g. Australia, US etc... even if you pay tax in Singapore, you might have to pay the additional tax in your home country if you do not qualify as a non-resident there (or worst case double tax if there is no tax treaty between your home country and Singapore!).

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Postby beppi » Wed, 26 Feb 2014 4:36 pm

There is no visa type for what you want to do. All visa that allow any type of work in Singapore are tied to a locally registered entity.
It has been done under the radar, and some even argue that this is legal as long as no commercial activity happens in Singapore or with Singaporean businesses, but I am not so sure (asking the authorities, and thus waking them up, is certainly not a good idea).
In any case, you will have to get your visa based on other reasons (e.g. DP) and you will not be taxed in Singapore.

fievelnewworld
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Postby fievelnewworld » Wed, 26 Feb 2014 6:02 pm

Thank you for your valuable input.

I am French and would certainly prefer to be taxed in Singapore than France.
there is a tax treaty between our countries, so no risk of double bill...

To be tax resident in SG then,
It seems the only way would be to set up either a new company, a rep office or a subsidiary, so i can get a work permit.
As far as Im aware, packages for those are around $5000 + necessity to rent an office space (no home office address accepted) circa $2000/month
that adds up...

Please correct me if i'm wrong
Any tips would be greatly appreciated,
Thank you

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Postby Beeroclock » Wed, 26 Feb 2014 11:23 pm

fievelnewworld wrote:Thank you for your valuable input.

I am French and would certainly prefer to be taxed in Singapore than France.
there is a tax treaty between our countries, so no risk of double bill...

To be tax resident in SG then,
It seems the only way would be to set up either a new company, a rep office or a subsidiary, so i can get a work permit.
As far as Im aware, packages for those are around $5000 + necessity to rent an office space (no home office address accepted) circa $2000/month
that adds up...

Please correct me if i'm wrong
Any tips would be greatly appreciated,
Thank you
Australia has tax treaty too so no risk of double bill but unless you qualify as non resident (which is not that easy, need at least a 3 year contract) you will still pay them the incremental which means you effectively are taxed at the Australian tax rates. Not sure about France but suggest you check it.

For company setup, suggest you search the business forum here and/or internet.

PNGMK
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Postby PNGMK » Wed, 26 Feb 2014 11:31 pm

You need a dependents pass from your gf. As such you need to be married or 'officially' defacto (common law marriage). That will save you all that money and be far more legal.

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Postby Strong Eagle » Thu, 27 Feb 2014 2:52 am

o a search on "starting business" and/or "letter of consent" to find threads on the subject.

You can have a home address for your business, as your registered address. You can set up a company for a lot less than SGD 5000. You need to find a CPA who will supply you with a resident (nominee) director.

fievelnewworld
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Postby fievelnewworld » Fri, 07 Mar 2014 1:06 pm

Thank you for your feedback and apologies for late reply. travelling...

Right.
If I register a Rep Office, I could then get employment pass
I just need to find a way to have the RO registered as my home address.

Questions:
Since the RO cannot pay taxes in SG, as it is not allowed to generate income,
can the Chief of the RO, ie me, be taxed on his income in Singapore?

Any tips for efficient CPAs in Singapore?

Thank you

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Postby PNGMK » Fri, 07 Mar 2014 2:15 pm

Strong Eagle wrote:o a search on "starting business" and/or "letter of consent" to find threads on the subject.

You can have a home address for your business, as your registered address. You can set up a company for a lot less than SGD 5000. You need to find a CPA who will supply you with a resident (nominee) director.


He could use his gf as the resident director.

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Postby beppi » Fri, 07 Mar 2014 3:53 pm

fievelnewworld wrote:Questions:
Since the RO cannot pay taxes in SG, as it is not allowed to generate income,
can the Chief of the RO, ie me, be taxed on his income in Singapore?

Yes, this will be treated just like any other employment income.

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Postby Strong Eagle » Fri, 07 Mar 2014 11:35 pm

fievelnewworld wrote:Thank you for your feedback and apologies for late reply. travelling...

Right.
If I register a Rep Office, I could then get employment pass
I just need to find a way to have the RO registered as my home address.

Questions:
Since the RO cannot pay taxes in SG, as it is not allowed to generate income,
can the Chief of the RO, ie me, be taxed on his income in Singapore?

Any tips for efficient CPAs in Singapore?

Thank you


You won't qualify for a Rep Office. From my comments in another thread:

Here is what I know.

First, the representative office program is administered by a completely separate entity from the ACRA, the government branch that registers and monitors businesses, companies, and partnerships.

Their main website is at http://www.iesingapore.gov.sg/, and you can apply online at https://roms.iesingapore.gov.sg/. Terms and conditions for setting up a RO can be found here: https://roms.iesingapore.gov.sg/tncbusiness.aspx

Once you have your RO registered, your next step is to go to the Ministry of Manpower (MOM) and apply for an employment pass. Documentation requirements can be found here: http://www.mom.gov.sg/foreign-.....uired.aspx

My view is that you will need to apply as an overseas employer but don't hold me to that... I've not set up a RO. http://www.mom.gov.sg/Document....._Form8.pdf

My view is also that you should get hold of a local accounting firm familiar with RO's, for two reasons. First, getting an employment pass from MOM will virtually require a SingPass, a local ID to transact business online. Even if you go the manual route, you'll still want a local address. Second, RO's are relatively few and far between, and you may need a local rep to work with MOM in getting your employment pass. There is absolutely no information that I am aware of that would shed light onto what criteria MOM would use in granting an EP for a RO... I am assuming that it would be rather automatic if IE Singapore approves your RO and you meet the other EP criteria.

As to your other questions: You should not have a problem renting a serviced office... a logical way to go for a RO... but I do not think you can engage in a lease for space without a valid work permit... your right to residency in Singapore.

You will need to supply names of at least one representative in order to register the RO and seek an employment pass. As I noted earlier once your RO has been approved and been given a UEN, your RO then applies for the EP.

I in no way endorse the company at the link below, I have never used them, and I think their rates amount to extortion (you should be able to find a local accountant to do this for half the amount shown). Nevertheless, I offer up their webpage to give you a sense of the steps and documents required. http://www.guidemesingapore.co.....ackage-ro1

a) Register your RO with IE Singapore
b) Apply for an EP with MOM
c) Acquire a serviced office... there are lots in Singapore... from cheap to prime, class A offices... Servcorp, for example... I kept my company there for years.

Hope this helps.


You will need to form a company. You have two choices. If you are actually working as a salaried/commissioned person for the company, then you will want to form a private limited that is wholly owned by your European company. They own all the shares. You become a director. The company applies for your EP. You will pay Singapore personal income tax.

This will complicate life for your company. You are not doing business in Singapore, and as such earn no revenues, but there will need to be annual filings in Singapore and you company will have to account for the Singapore company in its European books. You also have the issue of where revenues from your sales activities will be recorded.

Generally, you will want a CPA to help set up this kind of company as there are several documents that must be submitted by the European company. It is my view that unless your company is completely unknown, Singapore is generally OK with setting up a company in this manner, and if your salary/commission is above the P1 employment pass rate, then you should not have an issue. You'll also need to CPA to work through all the financial details of the subsidiary versus parent company.

The alternative is for you to become a contractor to your company. In this case you form a private limited with you as sole shareholder. You perform your work as a contractor and your company is paid, not you. In this scenario your corporate taxes will be zero (unless you are absolutely, screamingly raking in the dough).

Since you would be able to demonstrate a track record, and contracts that provide you with immediate income and employment, I judge that you chances of approval would be pretty good. This would also be a simpler route for your company to take.

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Postby Strong Eagle » Fri, 07 Mar 2014 11:39 pm

PNGMK wrote:
Strong Eagle wrote:o a search on "starting business" and/or "letter of consent" to find threads on the subject.

You can have a home address for your business, as your registered address. You can set up a company for a lot less than SGD 5000. You need to find a CPA who will supply you with a resident (nominee) director.


He could use his gf as the resident director.


Good catch.

fievelnewworld
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Postby fievelnewworld » Mon, 10 Mar 2014 10:22 pm

Thank you.

However, I still dont get why I wouldnt qualify as tax resident as i would have an EP and getting income for the French company for operating the RO.
+
Still have the French labour law on my side.

The other option is indeed to become a contractor.
easy for the company, but the whole insurance package would have to be covered by me then, and need a solid contract under which law?

if things turn sour in the future, we all need to cover our backs.

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Postby Strong Eagle » Mon, 10 Mar 2014 10:54 pm

fievelnewworld wrote:Thank you.

However, I still dont get why I wouldnt qualify as tax resident as i would have an EP and getting income for the French company for operating the RO.
+
Still have the French labour law on my side.

The other option is indeed to become a contractor.
easy for the company, but the whole insurance package would have to be covered by me then, and need a solid contract under which law?

if things turn sour in the future, we all need to cover our backs.


Yes, you would be a tax (and legal) resident of Singapore with an RO, but...

Your problem in setting up a RO is that you would need to lie to IE Singapore about your actual activities. https://roms.iesingapore.gov.sg/tncbusiness.aspx (See Annex 1A) because you actually are generating revenue for your company, just not in Singapore. You also need to renew annually and my sense is that they will want to know about your activities at each renewal.

Again, the legal options available to you are:

a) Your company establishes a wholly owned Singapore subsidiary. The advantage to the company is Singapore tax rates on net profit, probably less than they pay now.

b) You start your company and become a contractor. Your contract would naturally be enforceable wherever you want it to be enforceable... that's pretty common language.

As for insurance, etc, you compute the amount of non salary/commission benefits you are getting (retirement, medical, life, etc) and factor that into the actual rates you charge your company for your work. It's actually a pretty good way to go unless you already have a substantial pension plan that you might be in danger of losing.


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