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How to withdraw money from EPC

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eco_sky
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How to withdraw money from EPC

Postby eco_sky » Mon, 10 Nov 2014 4:42 pm

Hi All,
I have just incorporated an EPC IT Consulting company , and i will run the company remotely from my own country. What will be the most Tax efficient way to withdraw money from the company to cover my monthly personal expenses?
I have done some research, below are few option i come across, some pros and cons, may not 100% correct, hence seeking advice from the expert :)

- Director Loan (interest on the loan will be tax)
- Dividend (no tax, no sure can declare dividend before end of the end or not)
- Director fee (need to pay foreign work tax since i not stay in Singapore)
- Salary (need to pay foreign work tax since i not stay in Singapore)

any advise is appreciated, thank in advance

taxico
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Re: How to withdraw money from EPC

Postby taxico » Mon, 10 Nov 2014 8:14 pm

where you at?
Aut viam ad caelum inveniam aut faciam

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Strong Eagle
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Re: How to withdraw money from EPC

Postby Strong Eagle » Tue, 11 Nov 2014 1:59 am

eco_sky wrote:Hi All,
I have just incorporated an EPC IT Consulting company , and i will run the company remotely from my own country. What will be the most Tax efficient way to withdraw money from the company to cover my monthly personal expenses?
I have done some research, below are few option i come across, some pros and cons, may not 100% correct, hence seeking advice from the expert :)

- Director Loan (interest on the loan will be tax)
- Dividend (no tax, no sure can declare dividend before end of the end or not)
- Director fee (need to pay foreign work tax since i not stay in Singapore)
- Salary (need to pay foreign work tax since i not stay in Singapore)

any advise is appreciated, thank in advance


You clearly know what the laws are. How long do you think you can make directors loans to yourself before both Singapore and Malaysia come after you for purposeful tax evasion?

How long do you think you can pay yourself dividends, especially in the first 3 years where you may pay no corporate tax on the profits for those dividends, before the Singapore government begins to ask why there are no salaried employees or directors in the business and demand that you start paying "reasonable" salaries, or again, charges you with tax evasion?

I am sure you are not the first person to think of this, and Singapore is well aware of attempts to minimize foreign tax paid.

Even if you do pay a salary and are subject to 15% withholding, you may get a better deal since Singapore has a tax treaty with Malaysia and I believe the Singapore tax is less.

eco_sky
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Re: How to withdraw money from EPC

Postby eco_sky » Tue, 11 Nov 2014 4:44 pm

thank Strong Eagle for your advice, just have a doubt, since i physically not in Singapore, can i get salary from Singapore? If yes, do i need a employment pass?

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Strong Eagle
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Re: How to withdraw money from EPC

Postby Strong Eagle » Sat, 15 Nov 2014 3:52 am

eco_sky wrote:thank Strong Eagle for your advice, just have a doubt, since i physically not in Singapore, can i get salary from Singapore? If yes, do i need a employment pass?


I need to know more. You say you incorporated the company. Does that mean you are the sole shareholder?

You must then have a director in Singapore who is your locally resident director, correct?

Are you also listed as a foreign director in the books, or only a shareholder?

Do you have any employees in Singapore other than your resident director? Do you have other expenses?

And, if I may ask, why bother to incorporate in Singapore at all? I think the answer hinges on whether you are considered a resident or non-resident company.


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