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by Strong Eagle » Thu, 03 Aug 2017 9:55 pm
Here is the reality of the situation. In order to have a Singapore business entity (a private limited), you must have at least one "normally resident" director. If you have no one in Singapore willing to be your director, then you must rent one from one of the company formation outfits.
I assure you that there is no "chicanery", per se, although they may be trying to do their best to empty your wallet. Although people call these rented directors "temporary" or "nominee" or "resident", the fact is that a director is a director is a director... and that person is liable for all the acts of the company, both individually and corporately, both civil and criminal.
It used to be real easy to get a rented director... lots of CPA firms would have some retired 'uncle' that they would loan out to you for $1,500 or so... he didn't do anything, of course. But then, these 'uncles' started getting royally screwed because the companies they represented were into all sorts of illegal activities. Word has traveled fast in the CPA community, and you will have a very hard time finding a CPA who will still rent you a director without conditions. You can try, though.
Therefore, everyone of these companies that will provide you a director wants to crawl up your ass with a microscope to make sure that everything you are doing is squeaky clean and above board. They will want to be your bookkeeper and accountant to make sure your transactions are squeaky clean. They will want access to all bank account records to make sure there's not extra cash flowing in and out unaccounted for. They will want to look at your significant expense invoices, your payroll, your work permits, to make sure that you're not using them as vehicles to launder money. They want to file your annual tax returns and prepare your annual audit. Because it is their director that will bear the brunt of legal responsibility, should you turn out to be a shyster.
You, too, are at risk, with a rented director. She/he can do absolutely anything a director can do without your permission (and even if you are a non-resident director). You cannot write anything into your incorporation articles that would limit the powers and responsibilities of directors under the companies act. Therefore, a principal means of protection for you is a signed, undated letter of resignation... should your rented director go rogue, you date it and have evidence that he is not your director.
As for bank accounts, in theory, you can open a bank account, since the rented director files a directors resolution with a bank specifying who can draw on the account, draw limits, number of signatures, etc. You must be present in Singapore to open the account as you must sign the signature card in the presence of a bank officer. You must be present to sign the very real _paper_ paperwork to setup electronic banking. But again, in theory, you can readily open a bank account via your director and be made a signatory. As a matter of fact, if you are listed as a non-resident director at ACRA, you can do your own directors resolution.
The reality of the situation is much more complicated. The Monetary Authority of Singapore has already shut down several banks, and placed large fines on several more, for money laundering, including the notorious billion ringgit corruption scandal still unfolding in Malaysia. The banks are more jumpy than ants on a hot griddle.
Couple this with the fact that you are an unknown and that you will want to use electronic banking facilities, and you can understand the reluctance of the banks to want to handle your transactions, even if you have gobs of money stored in their vaults. It is a ludicrously easy way to launder dirty money... "income" from non-existent sales in countries that are very hard to audit... payments to "suppliers" that are buried in byzantine corporate relationships.
Your counterpoints to their fears might include the fact that your rented director company has already crawled up your ass, and if you are already running a legitimate business elsewhere, your willingness to be audited and reviewed so that they can be comfortable with you. Your job is to convince them you are clean and that your business is legitimate and real.
Finally, with respect to your questions about running a company without an EP, the short answer is that you don't need a work permit of any kind because you are not resident. And non-resident directors and managers are legal. However, because you are non-resident, you face a relatively heavy (at least from the Singapore perspective) tax situation. Compensation paid to non-resident directors must have 22 percent of the gross income withheld and passed onto IRAS before you receive your pay.
This also holds true if you are not a director but are providing principal management services for the company. The tax theory (and as embodied in most tax treaties) is that since you are an officer or manager of a Singapore based entity, then you are considered to be earning your income in Singapore. The automatic withholding just helps you be a nice legal guy.
That's my $0.02.
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