EP Holder and starting a foreign company

[charliele]

I guys, happy holidays!!
I will try to simplify my situation as I can:

The facts:

• 1. I'm currently working and living in Singapore under EP (for the last 1.5 years).
  2. A project that I have been working on before coming to Singapore is starting to become profitable.
  3. For this project I need to open a company and I will be required to start receiving salary.
  4. The new company has nothing to do with Singapore, and will never do any business in Singapore (at least for the foreseeable future).
  5. Since this company is very young - it cannot support me and my family so I would like to continue to work for my current employee and keep the current EP.
  6. I will not spend much time on this project (1 or 2 hours a week) - and all of my work will be done remotely.

After spending hours in the forum, I came to the understanding that I will not be able to start my own local company if I would like to keep my current EP and receive salary from the new company.

The questions:

• 1. I can open a foreign company (HK for example) - but would it get me into any troubles with MOM or IRAS (or anyone else)?
  
  2. What do you think are my other options? to put it simple: how as an EP holder I can start my own legal company, get paid while not risking my current EP?

* I'm not trying to avoid any tax payment - if the salary or any money I will be receiving from the foreign company is taxable - I will pay the tax with no doubt.

Thanks.

[PNGMK]

1. No.
2. Do you need a company? Alternatively could you have a partnership with someone overseas who does the billing and invoicing?

[charliele]

Thanks PNGMK for your answer.

• 1. When you said: "No." - did you mean that I will have no issues with MOM/IRAS? or did you mean that I cannot open a company in HK?
  
  2. Yes, I need a company. Due to some constraints, I need to be the owner of this company and to receive salary.

[Strong Eagle]

The questions:

• 1. I can open a foreign company (HK for example) - but would it get me into any troubles with MOM or IRAS (or anyone else)?
  
  2. What do you think are my other options? to put it simple: how as an EP holder I can start my own legal company, get paid while not risking my current EP?

* I'm not trying to avoid any tax payment - if the salary or any money I will be receiving from the foreign company is taxable - I will pay the tax with no doubt.

Thanks.

1. So long as the foreign company provides no goods or services in Singapore, you can open the foreign company. You should have a letter from your existing employer that they have no objection to you moonlighting while on your EP.

You should also be aware that the money you earn working for the foreign company will be taxable in Singapore as that is where you are performing the work.

2. There really are not any other choices, except to form your own company, obtain your EP, then contract to your current employer.

[charliele]

The questions:

• 1. I can open a foreign company (HK for example) - but would it get me into any troubles with MOM or IRAS (or anyone else)?
  
  2. What do you think are my other options? to put it simple: how as an EP holder I can start my own legal company, get paid while not risking my current EP?

* I'm not trying to avoid any tax payment - if the salary or any money I will be receiving from the foreign company is taxable - I will pay the tax with no doubt.

Thanks.

1. So long as the foreign company provides no goods or services in Singapore, you can open the foreign company. You should have a letter from your existing employer that they have no objection to you moonlighting while on your EP.

You should also be aware that the money you earn working for the foreign company will be taxable in Singapore as that is where you are performing the work.

2. There really are not any other choices, except to form your own company, obtain your EP, then contract to your current employer.

Thanks for your detailed reply Strong Eagle!! I really appreciate you taken the time to answer me.
After reading your answer I've dived a little deeper, trying to understand all the consequences.

I still try to understand these two points (total of 3 questions):

IRAS perspective:
I'm struggling with the understanding of how should I report the income (salary and/or invoices) from the foreign company.

I'm currently under an EP and working for a Singaporean company.
- I can see in this PDF (IRAS) that I can file my tax under "Other Income - Trade, Business, Profession or Vocation". But it doesn't say anything about foreign income.

1. So how should I report my foreign income? Under what section?
2. Do you know if as a private person I can issue invoices for my services?


MOM perspective:
I found this paragraph (under Employment of Foreign Manpower Act):

“self-employed foreigner” means any foreigner who, not being employed under a contract of service, seeks to engage in or engages in —
(a)
any trade, vocation or profession, whether for the purpose of gain or otherwise; or
(b)
any other activity in Singapore for the purpose of gain;

and

10.—(1) No foreigner shall be a self-employed foreigner unless he has a valid work pass.

3.Do you think that legally, from MOM perspective I'm not a self-employed foreigner since my gains are made outside of Singapore?

Thanks.