Employment pass from my own Singaporean business?

[AllBiz]

I've been looking into buying a Singaporean business and employing myself as a director or manager. I've also read that MOM doesn't like this scheme and looks out for it before issuing Employment passes. If anyone's attempted this, I'd like to hear how your experience went.

[Strong Eagle]

I don't think you will have any other alternative. If you've read my threads about the Entrepass, it is now essentially limited to certain types of business or those that receive venture capital funding. Keeping the Entrepass is also much more difficult because of expenditure requirements and staffing.

While I didn't contact MOM about buying a business, I did ask them about how a professional would go about getting started, and whether or not a person starting a business then applying for an EP would be approved.

Their response was that each application would be reviewed on a case by case basis, and my sense from posts on this board is that if you are qualified, experienced, have customers or potential contracts, and can support yourself to profitability, you'll get your EP. If, however, you look like a scammer, you'll get nowhere at a high rate of speed.

I also know of two people who opened restaurants and were able to get EP's... each of them put a couple hundred thousand into the business.

If you want semi informed opinion of whether or not you'd be successful, I'd need to know what type of business and the amount of capital you are going to put into it. Otherwise, you ought to run on down to MOM and schedule an appointment to discuss.

[AllBiz]

Thanks for the feedback. I've bought 2 beauty salons in the US and sold one of them for a significant profit; the other one is still under my ownership. I have a track record of raising revenues and valuations on these little businesses (even with my current business I have not sold, I can quantitatively show an increase in valuation).

My background can support a case for strong management and business system development, although I'd say my real specialty is in raising revenues. I am an American citizen with a bachelors degree in finance from a state school. I have no experience in finance sector employment however.

If I come to Singapore, the plan is to do the same thing I've been doing in the United States, which is buying salons, improving them, and selling them at a higher multiple of earnings. I have no problem holding them long-term either, if it's better for visa reasons. I would employ myself as a single or multi unit manager.

I see two possible issues:

1) Salons aren't in a tech or other desirable industry (to MOM) based on what I've read. If this is a major issue I could port my skill set into a different kind of small business that is more tech focused (I would have to learn the nuances of a new industry, but marketing skills for any type of B2C service business are essentially the same).

2) Capital investment. I could put down about $50,000-$70,000 right now, more if I wait. Thing is, I'd rather not as that would greatly slow down my ability to grow and expand. One of my early mentors taught me how to pursue motivated sellers in real estate, and I've used the same techniques to find motivated sellers of businesses. That's how I got into the salons; I would find sellers who wanted to get out, negotiate little to nothing paid up front, payment terms over 3 to 5 years, while using my cash to improve marketing and raise revenues.

In an ideal world I would do the same thing for the acquisitions in Singapore (motivated seller, negotiated payment terms for full price or close to it) and keep all my cash for marketing. If this is unrealistic though, I will put down money.

[Strong Eagle]

My view is that you are definitely out of the running if you want to buy a salon... under the old Entrepass rules, hair salons were one of the types of businesses that were specifically excluded from Entrepass consideration, presumably because these were/are small businesses run by and for local individuals.

You can't walk ten feet anywhere in Singapore without tripping over a propped open front door of a salon... some are upscale... most are not. They are local... an auntie starts the business and hires a couple of people... there it is. Walk into Lucky Plaza and/or Far East Plaza... you'll wonder how so many shops right next to each other can stay in business. I think, but don't know, that with cheap prices the competition might be cutthroat.

I suppose that if you had a business plan which would grow a small business and add employees it might be acceptable to MOM... but I don't know.

[AllBiz]

I thought that might be the case, thanks for sharing. I guess I'll spend another year or two working on developing a track record in a more desirable small business niche before coming to Singapore.

EDIT: As I think about this more, perhaps we might not be looking at this the way the MOM would. We're still talking in terms of buying a business, because practically that is what I'm doing. But by seeking an employment pass, perhaps the industry doesn't matter as much, and a strong background as a marketing director will see the pass through.