Kennyj wrote:Hello Experts,
Need your help / advice on my situation.
I am planning to form an offshore pte company in singapore ( my company is already in its early growth stages and not registered anywhere so singapore is the first jurisdiction where we will be registering our company)
There is no such thing as an "offshore" Singapore Pte Ltd. You either have a Singapore registered company or you do not. Where your Singapore company happens to conduct its business activities is another matter
Since I am going to be the 100% shareholder and Non Resident Executive Director in this singapore company, I plan to operate this company offshore for initial period of 1 to 2 years (without paying myself a salary. I will however paying myself yearly dividends or even decide to let the funds stay in my corporate account)
a) I assume you have rented a "normally resident" director for your company? You must have a director resident in Singapore with a legal Singapore address, capable of being served notices and court orders.
b) If you want to shoot yourself in the foot with respect to every obtaining an employment pass, be sure to pay yourself in ways that ensure you will pay no income tax to Singapore. You pay yourself $10,000 in tax free dividends instead of paying yourself directors fees which are subject to mandatory withholding, and the government is going to view this rather negatively. Sure, it's legal, and it's also legal for them to tell you to piss off when you make your application for EP.
I may decide to relocate to singapore after may be 1 or 2 years to expand the business in Singapore locally and since I am the Executive Director in the company and the main decision maker, authorized signatory for all contracts, documents etc. and involved in all day to day operations of the business, how likely am I to get an employment pass after 1 - 2 years of forming this entity? ( if i also intend to open a local singapore office and hire staff to scale)
I will be paying corporate taxes applicable to me. etc. and
Of what benefit has your company been to Singapore? You pay no corporate tax on the first $100,000 of profits for 3 years, and corporate tax rates are still extremely generous after that. If you pay yourself dividends, you pay no personal tax. If you are working in a non-director capacity for the company, ie, providing the business end product, your are a foreign employee and not subject to Singapore tax. So, other than a few dollars in fees to ACRA and the costs of a resident director, of what benefit are you to Singapore?
That is the essential question you must answer if you want an EP. The Singapore authorities may well want to know why you are incorporated in Singapore at all, instead of where you will be conducting your business, given that you have only a rented director and no ties whatsoever to Singapore.
And, it's a legit question. Why wouldn't you start your business in the country of primary activity, then open a Singapore based firm when ready to expand? It might smell of tax avoidance somewhere, and Singapore doesn't like that.
Perhaps if you have a solid business plan and pro forma financials for you proposed Singapore activities, along with a successful track record outside of Singapore, you will be looked upon favorably.
I am aware of this recent statement given by the MOM minister about changes they are bringing to how MOM views employment or entrepass but still want expert opinions on this.
Would it be more logical to apply for employment pass after 1-2 years or should I file it now, or would entrepass make more sense.
The reason I don't want to go entrepass route is because I won't be able to fulfill MOM requrements about S$100K spending in the first year and so on since my business expenses are usually made out of singapore since my staff is based at U.S and so on.
I have recently been in talks with guidemesingapore guys and planning to open an offshore company through them in May.
I would really appreciate any advice, help or opinions
Thanks in advance
Again, you can't open an "offshore" company in Singapore. You can open a Singapore company with a Singapore normally resident director. Your Singapore based company can conduct business activities anywhere in the world. You can be a non-resident director, subject to non-resident taxation policies.
You don't want to go the Entrepass route and I doubt seriously that you would qualify, anyway. Have you read this thread?
http://forum.singaporeexpats.com/viewtopic.php?t=93619
Some of it is dated, and most of it is still relevant.
With respect to the $100K that you mentioned: If you have the intention of getting an EP I judge that you will need to demonstrate financial viability through projected break even of your Singapore company. If you don't have sufficient demonstrable funds for your living expenses plus the costs of the company operations, you're going to be looked upon very dimly... just look at some of the rejection threads in the Careers section... people who were going to pay themselves 'X' in salary in order to meet EP requirements with no supporting revenues or bank account.
You also ought to look at this thread about offshore operations. Then get back if you have more questions.
http://forum.singaporeexpats.com/viewtopic.php?t=110730
