Thanks for your insights. I do have two questions:Strong Eagle wrote:The people telling you that you can limit the powers of a director are full of crap. Think about it. A director is the leader of the company by statute. Take away her powers, then have the company commit a financial crime. Who is responsible? Nobody? Wrong! The director is responsible and that cannot be undone.
You can probably prevent the director from having access to your bank account, and, it is very unlikely that a local bank, at this point, is going to open an account where the only signatory is a foreign director. It makes it far too easy to launder money, especially if you are also the signatory on a foreign bank account. Maybe the Amazon angle will work... you won't know it until you talk to bank officers.
A rented director or "nominee" as folks love to say is a full fledged director of the company with all the powers and duties of a director. Check out the Singapore Companies Act for a complete list. You can screw the director and the director can screw you. Most outfits renting a director these days will require that you handle all taxes, accounting, hiring, EP's, and auditing through them so they can keep an eye on you. They usually demand monthly bank statements as well. $2,000 to $3,500 for the director each year, another $2,000 and up for the financial services.
Why would you open a corporation in the USA? You could start a LLC instead, and all income passes through to you on your own income tax report. Same if you open a Subchapter S company. No tax, other than personal.
If you are managing the company, how are you planning on paying yourself? Payments to foreign directors and professionals are taxed immediately through withholding at the rate of 22%. Pay yourself $1,000, send $220 to IRAS and the remaining $780 to yourself.
Think you're going to try to get around this by paying dividends instead? Probably can do for a while... but sooner or later IRAS will take a look at your company and realize that you are providing professional services.
You mentioned that the corporate tax rate in the USA is 39%... rarely paid, BTW. But, if you wanted a USA entity, you would never form a corporation. You would form either an LLC or a Subchapter S corporation, both of which are pass-through vehicles for company income... no tax at the company level, and you still have the protection of a legal company entity. So, if you wanted a USA entity, form an LLC in just about any state that allows foreign owned LLC's. LLC's are treated as sole proprietorships or partnerships at the federal level, and at the moment I can tell you nothing about your personal taxation under such a setup.JonaBoss wrote:Thanks for your insights. I do have two questions:
1) Why would you open a corporation in the USA? You could start a LLC instead, and all income passes through to you on your own income tax report. Same if you open a Subchapter S company. No tax, other than personal. Not sure if I understand correctly. Are you referring to LLC in Singapore (I would still need a bank account) or the US?
It's a calculated guess on my part, and somewhere back in Singapore's history, someone starting scamming IRAS. They'd form a local Singapore country, but all the directors and people actually running the company would be foreigners (ie, non-resident in Singapore)... maybe as "far" away as Johor Bahru. So, nobody paid Singapore income tax, and Singapore had no effective way to ensure that tax was being paid somewhere.2) If you are managing the company, how are you planning on paying yourself? Payments to foreign directors and professionals are taxed immediately through withholding at the rate of 22%. Pay yourself $1,000, send $220 to IRAS and the remaining $780 to yourself. I suppose that the 22% is the personal income tax and that this is a one-time payment?
I will add two things. First, I'd bet money that the "limitations" the agency wishes to impose on directors are more directed to you... they will not make decisions, they will not manage your company, they will not present themselves in front of a bank officer for a loan or a bank account. They don't know crap about running your company, and they will make you sign something that says they have no obligations whatsoever if your company fails, even if their failure to act, for example, getting the EP you needed, or writing the check they failed to write, causes you incredible grief.Thanks for your reply. I will be posting the feedback I get from the agency tomorrow.
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