'Contract for Service' for Spouse on Dependent pass

[metallic60]

Hi,

My spouse (Dependent pass holder, non-Singaporean, non-PR) is being offered a Contract for Service by a Management Consulting firm from India (Client) to work as an Independent consultant in Singapore on a Project (commission basis).

Before entering into the contract, need understand the below -

1. Work permit - can a Dependent pass holder engage in a "Contract for Service" as an independent consultant in SG? Are there any permissions required from MoM?
Closest information I could find is as below:
http://www.mom.gov.sg/employment-practi ... ation.aspx

2. Tax Liability - what would be the tax liability of the Independent Consultant in SG?
Closest information I could find is as below. Note that there is no Employer-Employee relationship so the Employer definition does not apply.
http://www.iras.gov.sg/irashome/page.aspx?id=1192

3. Governing Law - will the contract be legally binding to the Client in Singapore? How can commission for service provided be legally guaranteed for the Consultant in Singapore?

4. Reimbursement / Commission - Is the consultant better off in receiving the commission in INR or in SGD? I assume there will be a Double Taxation exemption for any Commission received even in India. (Exemption under Avoidance of Double Taxation Agreement (DTAs)).

Thanks.

[beppi]

1. This is legally classified as self-employed work, which (to my knowledge) is not allowed on DP (no LoC will be given and no work is allowed without one). To get an alternative visa that allows it is very complicated.
2. Income gained from work performed in Singapore is taxable here, no matter where and in which currency it is paid.
3. You are free to choose the law to govern the contract.
4. This is a matter of taste, as far as I can tell.

[PNGMK]

For item 1 you could obtain an LOC from MOM... or risk it and not declare the employment, nor have the funds remitted to Singapore.

If you here for a short time... maybe you'll be ok.... if you want to stay here for the long term - don't do it.

[Strong Eagle]

Hi,

My spouse (Dependent pass holder, non-Singaporean, non-PR) is being offered a Contract for Service by a Management Consulting firm from India (Client) to work as an Independent consultant in Singapore on a Project (commission basis).

Before entering into the contract, need understand the below -

1. Work permit - can a Dependent pass holder engage in a "Contract for Service" as an independent consultant in SG? Are there any permissions required from MoM?
Closest information I could find is as below:
http://www.mom.gov.sg/employment-practi ... ation.aspx

No. Either your spouse has to create a business/company to work for, then apply for EP/LOC or the Indian firm needs to have a legal presence and obtain a work permit. What the Indian company is proposing is not legal.

2. Tax Liability - what would be the tax liability of the Independent Consultant in SG?
Closest information I could find is as below. Note that there is no Employer-Employee relationship so the Employer definition does not apply.
http://www.iras.gov.sg/irashome/page.aspx?id=1192

Since the arrangement being proposed is not legal, this is a moot point. If your spouse creates the business/company than she/he is responsible for income tax. If she/he is working for the Indian company, she/he still pays income tax.

3. Governing Law - will the contract be legally binding to the Client in Singapore? How can commission for service provided be legally guaranteed for the Consultant in Singapore?

No, the contract won't be legally binding because your spouse cannot legally work under those terms. In any event, you can't "guarantee" any kind of a commission based promise, and all the contracts in the world mean nothing. You either trust the party with whom you are working, or you go to court to try and recover. If I had to go to court, I'd much rather do it in Singapore.

4. Reimbursement / Commission - Is the consultant better off in receiving the commission in INR or in SGD? I assume there will be a Double Taxation exemption for any Commission received even in India. (Exemption under Avoidance of Double Taxation Agreement (DTAs)).

Thanks.

I doubt seriously that the currency makes much difference. But this whole setup has the stink of a dead fish on it. Either the Indian company proposing this arrangement is ignorant of the law and how things work, or there is a scam going on here. I'd really ask them what they think they are going to do about work permits. That's the key.

[Strong Eagle]

For item 1 you could obtain an LOC from MOM...

A Singapore based entity (business or company) has to make application for a LOC. Unless the Indian company has a legal entity here or the spouse creates one, no LOC will be issued.

[PNGMK]

For item 1 you could obtain an LOC from MOM...

A Singapore based entity (business or company) has to make application for a LOC. Unless the Indian company has a legal entity here or the spouse creates one, no LOC will be issued.

True enough. The other way she could do it is to have a Singapore payroll company sign the contract and arrange for a WP and pay her the salary.

[Strong Eagle]

For item 1 you could obtain an LOC from MOM...

A Singapore based entity (business or company) has to make application for a LOC. Unless the Indian company has a legal entity here or the spouse creates one, no LOC will be issued.

True enough. The other way she could do it is to have a Singapore payroll company sign the contract and arrange for a WP and pay her the salary.

Indeed, that is absolutely correct... and I believe the override would be at least 25 percent... that's how much I would want at a minimum, given the legal requirements and responsibilities.

[PNGMK]

A Singapore based entity (business or company) has to make application for a LOC. Unless the Indian company has a legal entity here or the spouse creates one, no LOC will be issued.

True enough. The other way she could do it is to have a Singapore payroll company sign the contract and arrange for a WP and pay her the salary.

Indeed, that is absolutely correct... and I believe the override would be at least 25 percent... that's how much I would want at a minimum, given the legal requirements and responsibilities.

We had an employee (SC though) on via a payroll company - it was a lot less than 25% but of course he was an SC, not a foreigner.

[Siv]

Alternatively, if this Indian firm had a local partner/agent they work with in Singapore, that company could apply an EP thru sponsorship for the OP.

[metallic60]

The Indian firm has asked to my spouse to understand the MOM requirements before accepting the agreement - I had found it very difficult to get information on the above topic on government websites but this forum has been amazing.

I understand this is the way forward before I get into a contract -

Either your spouse has to create a business/company to work for, then apply for EP/LOC or the Indian firm needs to have a legal presence and obtain a work permit.

Thanks for pointing me in this direction!

[PNGMK]

Good to hear.