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Open company, or freelance, or expat, or...?

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mimeso
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Open company, or freelance, or expat, or...?

Postby mimeso » Thu, 01 Sep 2016 4:46 pm

Hello all, I do have a plan, but I don´t know what is the best way to approach :?
My plan is to work and live in Singapore for the next 1-x years, hopefully for my actual company.
Atm I am working in an Austrian branch of a Swedish company. They had a kind of "letter-box" company (like offshore) in Singapore, but probably closed 2-3 years ago.
Most of my job is done via PC, Skype etc...

How to aproach?

Shall they re-activate the company, and hire me there? Via local contract and local payment?
Shall I stay in contract like now, but "just" work from another place, as a kind of home office?
Or shall I work as a freelancer for them, but living in Singapore? How to get the salary? Locally?

The questions are also about taxes, insurance, retire fond, etc - what is the best and correct solution, for me and the company? Cash-wise and buerocratic-wise? :D

To make it even more difficult: I´m married & have a kid, so we all want to move to SG. Heading for an EP with over 5000sgd, then it shall be no problem to carry them too. Right?
My wife will search a job there, but I guess it´s difficult to search from abroad...
Last edited by mimeso on Mon, 02 Jan 2017 11:21 pm, edited 2 times in total.

taxico
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Re: Open company, or freelance, or expat, or...?

Postby taxico » Thu, 01 Sep 2016 5:36 pm

mimeso wrote:Hello all, I do have a plan, but I don´t know what is the best way to approach :?
My plan is to work and live in Singapore for the next 1-x years, hopefully for my actual company.
Atm I am working in an Austrian branch of a Swedish company. They had a kind of "letter-box" company (like offshore) in Singapore, but probably closed 2-3 years ago.
Most of my job is done via PC, Skype etc...

How to aproach?

Shall they re-activate the company, and hire me there? Via local contract and local payment?
Shall I stay in contract like now, but "just" work from another place, as a kind of home office?
Or shall I work as a freelancer for them, but living in Singapore? How to get the salary? Locally?

The questions are also about taxes, insurance, retire fond, etc - what is the best and correct solution, for me and the company? Cash-wise and buerocratic-wise? :D

To make it even more difficult: I´m married & have a kid, so we all want to move to SG. Heading for an EP with over 5000sgd, then it shall be no problem to carry them too. Right?
My wife will search a job there, but I guess it´s difficult to search from abroad...


are you an Austrian citizen? what would you classify your job as?

are you being paid >5,000 SGD now (~3,300 EUR)?

will you be paid more when working in Singapore? (or less?)

are they willing to start a company in Singapore to hire you?

tax rates can be found at iras.gov.sg and plenty of advice on this forum itself - you just have to look, search, read.

insurance is not mandatory but recommended.

retirement funds... aka CPF in singapore - your employer has to pay, or if you're self-employed, you'd have to pay. but you can take all of it with you when you permanently leave Singapore.

have a search on the forum and you'll get a better picture.
Aut viam ad caelum inveniam aut faciam

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Re: Open company, or freelance, or expat, or...?

Postby mimeso » Thu, 01 Sep 2016 6:09 pm

Hello taxico,
Thank you for your fast reply! :)

Here are some answers on your questions:
- are you an Austrian citizen? what would you classify your job as? -> yes, Austrian citizen; Mid-Management level in Sales

- are you being paid >5,000 SGD now (~3,300 EUR)? -> it depends :D Without taxes etc I am getting about 4000eur, but in the end roghly 2000eur left in my pocket, as gov catches a lot in AT :x
But here I think is the tricky part - what is the best way? Eur salary, sent abroad? Or freelancer? Or paid in sgd? Probably getting 6k sgd, and pay everything by myself locally?

- will you be paid more when working in Singapore? (or less?) -> Atm it looks like 6-7k sgd, but it depends on which solution we can find. Probably they´ll pay a part of rental a room etc., and I will get the same as now. But we need a solution to carry my family, so I need more than 5k for the EP

- are they willing to start a company in Singapore to hire you? -> it depends on the costs & buerocracy, and if they could probably re-activate their ltd they had. Maybe it is easier & cheaper for them, but still ok for me if we can find another solution (like home office, with living there?)

I am checking a lot since weeks, and it will be more the next weeks and months. The idea is to move during spring/summer next year, so there is still enough time I guess :)
And I am planning to visit SG during cold winter here, to check more things locally = better then online sometimes

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Re: Open company, or freelance, or expat, or...?

Postby Strong Eagle » Fri, 02 Sep 2016 5:08 am

To start somewhere: If the company has been wound up, that is, closed under the rules of the Singapore Companies Act, then it will be necessary to start at the beginning. Your Swedish company would need to engage a Singapore incorporation firm to create the company (most likely a wholly owned subsidiary of the Swedish company) and to provide a "normally resident" director until such time as you come to Singapore, obtain and EP, and become the director yourself. You can expect costs in the S$1500-S$2000 range to form the company, and another S$1500 for your rented director, the one who would file the paperwork for your own EP.

It is highly unlikely that there is any company to "reactivate". A company can be considered dormant if it has not had any financial transactions but it must still hold an AGM, file annual reports, and keep a normally resident director. I could be wrong but if the Swedish company gave it up in Singapore, it wouldn't make much sense to keep paying for a director and an accountant to file annual reports. However, if they did have a dormant company, then the only costs would be to file for your EP... cheap cheap.

Takeaway #1 - If you are going to work for the local Singapore subsidiary of the Swedish company you must be employed by Singapore company in order to be its director. You must have an EP, obtained through the company. You can't work on contract because whomever was contracting you would have to obtain an EP for you anyway.

Takeaway #2 - There is no way you are going to have a "home office" or "freelance" in Singapore. You must have a valid residence permit (EP, DP, LTVP) to be able to reside legally in Singapore, and of all those passes, only the EP would allow you to work (a bit more complicated than that but all the other passes are tied to someone else's EP). You must have an EP to reside and work legally in the country.

If you are resident in Singapore and working in Singapore, then you pay your personal income in Singapore. Most of the time this means that you will not have to pay income tax in your home country but you need to verify specifics. It doesn't matter where your salary is paid from, nor where it is paid to. For example, you could work in Singapore, get paid directly from the Swedish company into a bank account located in Brazil... you still pay Singapore income tax.

It is way too early to think about retirement funds, insurance and all that extraneous stuff.

The biggest problem will be getting approved for an EP. If the Swedish firm you are referring to is well known and has a track record, you probably won't have too much difficulty. If it is virtually unknown, then you may have a problem.

Look at it this way. Let's say you're in India and you get a bright idea of how to get to Singapore. You have your brother in law form a company in India, then in turn, he says he wants to expand to Singapore with a branch company. He starts the Singapore company, and applies for an EP for you, and presto... now you can legally reside in Singapore... except, the government is wise to all these tricks and will vet your application carefully. Your Swedish company should be prepared to explain why they are reopening a Singapore branch and what your duties will be... just saying they want to let you work in Singapore probably won't cut it.

Read this, think it over, and come back with more questions.

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Re: Open company, or freelance, or expat, or...?

Postby okonu » Fri, 02 Sep 2016 10:47 am

What Strong Eagle says.

If your work can be done remotely, then it will be difficult for your company to justify why your role needs to be in Singapore vs Sweden, on top of needing to convince MOM that they need a foreigner for the role rather than a local hire. At the very least they will have to say that you need to be in same time zone as APAC customers, business development in SE Asia etc, plus need to be an expert in your companies products.

Just "I feel like being in Singapore for a few years" is not going to work.

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Re: Open company, or freelance, or expat, or...?

Postby mimeso » Fri, 02 Sep 2016 3:23 pm

Good morning all, and thank you very much for the fruitful input & tons of information!

I´ve had a meeting with my local boss yesterday evening, and he said the same - there is only one way to do that: Sweden (or probably Austria?) opens a company in SG, and I´ll get employed via there.

The 1500-3000sgd are not the problem, and the Swedish mother is one of the biggest companies here in Europe, so there are no tricks in this game :)

I think that what Strong Eagle said in the beginning is the right way to approach: the Sweds shall open a company there, organize the EP for me n my family, and I will come there afterwards and take over then. Probably our branch here in AT can do the same, but it may be more difficult to argue "why we need a branch in SG". Am I right, or shall we give it a try?

But, is another way possible too? What if I open a company in SG via local help and work then for our branch like I do now?
I am still thinking about this way, as I want to do more business in Asia (my wife is from China btw), and our company sources most of our assortment from Asia. This also means travelling to the production sites, checking the quality, searching for new producers, new ideas etc.
But if I do have my own company, then I could also work for others here in Europe. Some of my former colleagues are selling imports from Asia too - and it would be helpful to have a person "locally" with all the knowledge, and short travelling time to production sites aso.

@okonu: yes, I can understand you, and I totally agree. These are some of the problems here in AT, that everyone can come and settle down. But that´s another story.. :?
Btt - most of my work can be done from the far, but I do have huge experience in our company (vs a person from outside) and it is good to have people "from us" staying in Asia to be faster available over there. And probably we would like to expand too.

In the end, "I feel like being in SG for a few years" is my own idea, so you are right, but we do have the possibilities to bring our company forward if we go that way. So it´s more or less a win-win for both sides, if the costs are on a doable level.

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Re: Open company, or freelance, or expat, or...?

Postby Strong Eagle » Sat, 03 Sep 2016 8:15 am

A dose of reality is in order here. I judge that $5,000 per month is insufficient to support a family, especially if your child is of school age. As an EP it will be difficult, if not impossible, to get into public school and private schools are damned expensive. Rents, while easing, will take a large chunk of your salary unless you are willing to radically change your living standards over what you have now.

Good luck with your wife searching for and landing a job. Many trailing spouses find it extremely difficult, if not impossible, to land work. With the government's crackdown on "foreign talent" it will be even more difficult for her to find work because the government will be less likely to approve a work permit unless it has a large salary behind it. There are many stories buried in these forums of trailing spouses who just gave it up. Do not assume that she will be able to augment the family income.

It helps to understand why the government issues EP's in the first place. They do it so that multi-nationals will setup headquarters or research facilities or manufacturing facilities in Singapore and then hire bunches of Singaporeans at a good wage. And they issue EP's to individuals that they deem have the technical, professional, or financial skills that will improve Singapore's overall capabilities.

You don't fall into one of these categories. Sure, if it's a big ferkin Swedish MNC, and they say they want you in Singapore to grow in Asia, they will probably get what they want... no one wants to piss off a big MNC that has the potential for economic benefit.

YOU will have a much tougher time getting an EP for your own company. At a minimum, you'd want to demonstrate a solid contract so that if the gahmen does let you it, you can demonstrate at least a couple of years of guaranteed income. You'd need a solid business plan that shows how you develop the remaining Euro nations and what kind of revenues it will generate. You need to prove that you are of benefit to Singapore. If they get the idea that this is simply a scheme for you to work in Singapore, watch out... they deal with a lot of those.

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Re: Open company, or freelance, or expat, or...?

Postby mimeso » Sat, 03 Sep 2016 10:25 pm

Thank you for talking about reality! I read a lot in the last weeks and months, but no one was so clear like you, and that is good to hear.
Yes, it will be tough, and I think it´s good that Singapore closes the market a bit to help their own citizen finding a great job and moving their own country forward. Most expats are coming & going...

In the end the only real way to do it is that Sweden opens a company again, and I can work for it. And of course I am heading for more than 5000sgd :) ; atm we are talking about 6-7000sgd, but there are a lot of things to discuss depper after getting all the information and the plan how to do it.

Can you tell me where or who can organize opening the company etc? Also by PM
Is it useful if I go to Singapore now to meet people, go to Government, visit MOM etc?

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Re: Open company, or freelance, or expat, or...?

Postby Strong Eagle » Sat, 03 Sep 2016 11:21 pm

mimeso wrote:Can you tell me where or who can organize opening the company etc? Also by PM
Is it useful if I go to Singapore now to meet people, go to Government, visit MOM etc?


I very rarely answer privately.

If you Google "incorporate company Singapore", you will end up with at least half a dozen, maybe more, companies offering such services. Not having used one of these services I can offer no advice as to which might be the better deal.

It used to be that virtually any CPA in town would offer you a rented director. These people obviously didn't realize that a rented director is responsible for all acts of the company, and I judge that someone must have got burned because the companies that do continue to offer such services always include something like the following disclaimers.

  • We will appoint one of our team members as the local director for your company
  • The service is offered for statutory compliance only. The local director will not be involved in any management, financial, or operational matters of the company. You must appoint one or more other individuals (who can be foreign individual(s) including yourself) as the executive directors who will be responsible for running the company.
  • In addition to our local director fee, we also collect a refundable security deposit for the provision of our local director service. The security deposit is collected to safeguard the interests of local director.
  • You can ask our local director to resign at any time by identifying another person who will be acting as the local director. We will refund the security deposit within 5 working days after the change has been affected with ACRA.
  • You are required to engage our Registered Address, Accounting & Corporate Tax Filing service unless otherwise approved by our compliance team.
  • You are required to provide copies of your company's bank and financial statements on a monthly basis.
  • The bank account must be with a bank that's on our list of approved banks (OCBC, UOB, DBS, Citibank, HSBC). Click here for more information.


You can see they are trying hard to keep from getting their asses burned because they are on the hook for the misdeeds of the company.

As for your question, "Is it useful if I go to Singapore now to meet people, go to Government, visit MOM etc?" the answer is, "Meet whom?" Virtually all government transactions are conducted electronically. Even if you got a face to face meeting, which is unlikely, it wouldn't make any difference except perhaps, in the case of an appeal.

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Re: Open company, or freelance, or expat, or...?

Postby mimeso » Sat, 03 Sep 2016 11:32 pm

You are great, thank you, again!
After my last post I found a lot by google already, as you mention above. That´s the way to approach.
I will be in Sweden HQ the next week, then talk to our CEO how to move on.

One last point, as you mentioned the difficulties getting a job locally: what about applying for a PR? Would it make it easier then for my wife and my kid (1y old btw)?
If we move there next year, my kid still has 1-2 years until she shall go to kindergarden

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Re: Open company, or freelance, or expat, or...?

Postby Strong Eagle » Sat, 03 Sep 2016 11:58 pm

mimeso wrote:what about applying for a PR? Would it make it easier then for my wife and my kid (1y old btw)?


You've probably got a better chance of flappin' your arms and flying to the moon than you do in getting PR.

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Re: Open company, or freelance, or expat, or...?

Postby mimeso » Sun, 04 Sep 2016 12:06 am

Strong Eagle wrote:
mimeso wrote:what about applying for a PR? Would it make it easier then for my wife and my kid (1y old btw)?


You've probably got a better chance of flappin' your arms and flying to the moon than you do in getting PR.


:D :D :mrgreen: but now you have to tell the reasons, as I'm curious :mrgreen:

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Re: Open company, or freelance, or expat, or...?

Postby Strong Eagle » Sun, 04 Sep 2016 12:20 am

mimeso wrote:[ :D :D :mrgreen: but now you have to tell the reasons, as I'm curious :mrgreen:


You are a very poor candidate for PR for a number of reasons.

  1. You are of the wrong race and ethnicity to blend into Singapore culture
  2. You don't have a wife and family in the region which would tend to keep you in Singapore
  3. You work for a MNC and they can move you out again just as easily as they moved you in
  4. You don't fall into any of the buckets the gahmen uses for ethnic and demographic balancing
  5. Historically, Europeans/Americans are less likely to stay as PR's over the long haul
  6. PR is a pathway to citizenship and it is unlikely that you will give up current citizenship to become a citizen of Singapore
  7. Singapore citizens are bitching loudly about PR's taking benefits and jobs and driving up housing costs

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Re: Open company, or freelance, or expat, or...?

Postby mimeso » Sun, 04 Sep 2016 12:33 am

Good to know, thank you. This leads me to the last point for now: you mention 5k€ is a hard limit: what do you think? It's never enough :) , but on my last visit I calculated the following:
- Rental 60-80sqm for 2000-3000sgd
- Metro, phone, net, power etc for 300-700sgd
- Food (self cooking, hawkers) 1000-2000sgd
- Insurance? Cpf? What else?
-> 6-7000sgd shall be okay

Btw some of your website links are broken 404s..

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Re: Open company, or freelance, or expat, or...?

Postby taxico » Sun, 04 Sep 2016 1:26 am

mimeso wrote:...One last point, as you mentioned the difficulties getting a job locally: what about applying for a PR? Would it make it easier then for my wife and my kid (1y old btw)?
If we move there next year, my kid still has 1-2 years until she shall go to kindergarden


although possible... (and beyond what eagle has mentioned) without a shedload of sheqels it's unlikely you'll get PR as quickly or easily as you might think.

since your wife is Chinese and your child is not schooling, why not consider living in china? there's also malaysia and thailand (i could go on listing SEA countries) with visas that are relatively easy to obtain...

food at 1k - 2k seems a little low for a family of 3... (IMO)

bump up your bills by $300 (your wife and kid will wanna go around too, right? maybe a playgroup, classes, etc)...

(1.5k + 1k + 2k) that's about 4.5k/month with a company rental subsidy of 1.5k and they will also be taking care of your insurance i hope.

5,000 EUR = ~7,500 SGD

CPF will take away 37% every month (employer @ 17% and employee @ 20%) = 2,775 SGD (you cash out when you leave singapore).

your take home pay is 4,725 SGD... (before income tax @ ~415 SGD/month - about 5k/year before any relief)

in AT you save 2,000 EUR/month (~3,000 SGD). may be less in singapore.

are you happy with that?
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