financepil wrote:Strong Eagle, Thank you for the response.
Even thou I'm going to be employed by a foreign entity who does not have a presence in the region, I will be based in Singapore to do my job responsibilities.
1. given that I will be executing all the job task based in Singapore, Aint I liable for my own CPF?
2. I do understand , My job contract may be under the law where my HQ is located. Will it be a norm to do it that way? which does not give any gurentee of the job where i'll be based at (Singapore) ?
3. Any suggestions from your end if I have to sign a foreign based job contract?
If you are going to be working in Singapore, then the following applies.
You are not working for any legal Singapore entity, therefore you can only structure your working relationship with the foreign entity in one of two ways.
a) You can be self employed, just as any sole proprietor would be. You will contract with your foreign employer in your name only. Because you will be working for a foreign firm in your name only, you don't even need to register as a sole proprietor, you can simply use your own name on all contracts and documents. For details, see
https://www.acra.gov.sg/components/wire ... =1755#1756
Of course, you can also register as a SP, if you wish... I'm not sure I see the benefit in it, though.
If you choose this route, and because you are performing your work in Singapore, then you will pay personal income tax on your earnings as any sole proprietor would, filing your earnings on your personal income tax form. As a SP you are not required to make CPF payments, you are required to make MediSave payments. You can voluntarily make CPF payments to your account.
I also note, for further discussion below, that your personal finances and your business finances are one and the same under a SP... you have no shield and can be sued individually for everything you have.
b) You can form your own private limited company, become its sole shareholder and director. Now, you are working for a Singapore legal entity, and it is this legal entity that would contract with the foreign company, assigning you to work for them on behalf of your company. This is a more complicated way of doing things, and, it results in the following:
1) Your company, not you, will invoice the foreign firm, and will deposit money paid into a company bank account.
2) You will be paid by the company. You can pay yourself a combination of directors fees for managing the company and a salary for the work you perform for the foreign employer.
3) Both your directors fees and your salary are subject to personal income tax and your company will have to file an IR8A with IRAS, stating your earnings.
4) All salaries paid are subject to both employer and employee CPF, and you can elect to have your company pay the employee portion of CPF as well (there is a specific calculation on the IRAS website for this).
5) Unless you specifically relinquish it by signing a document to be personally liable, you are protected by the corporate shield which prevents your personal assets from being attached should your company be sued and lose.
I mention this last aspect because of your second question: where the contract is enforced... which country's law.
If the contract is enforced under the laws of Australia, or the UK, or the US, or Japan, or Hong Kong, or something similar, then you generally know that corruption is minimal, that corporate and civil law is roughly the same, and that your biggest problem would be the expense of having to litigate in a different country.
But, if the contract is to be interpreted under the laws of a country you might consider dodgy, then you have more of a problem. Nothing against our Indonesian or Chinese brethren, for example, and, I judge that a foreigner might have a tough time in the courts if push came to shove.
So, if I were dealing with a contract out of the UK, US, AU, etc, I'd probably be OK with entering into it as a SP. But, if I didn't totally trust the company I was about to work for, I might want the protection of a private limited so that even if I got screwed in a foreign court, all they could take would be the assets of the company.
You have to decide the nature of the foreign employer you are working for, and whether they are trustworthy. Lawsuits over a contract are about the very last thing anyone ever gets into.
What's more important is to have a clear understanding of your liabilities and risks that they have written into the contract. Could they refuse to pay you if you f*ck up your project? That's not a unreasonable clause. Could they demand direct damages from you for the costs they incurred as a result of your f*ckup? Some companies try to do that; that's where having a corporate shield comes in handy. Could they demand consequential damages because they claim you f*cked up an additional $300 million worth of business? Virtually nobody would be willing to accept such a clause in a contract.
Be very clear on your deliverables. Be very clear about what is in scope. Be very specific about what is out of scope. Be sure your contract contains elements for managing additions and deletions to the work product... they will want to and this and that without paying you more. Be sure that their responsibilities under the contract are clearly defined. Example: They are supposed to supply you with $50,000 of equipment to do your job. This needs to be clearly stated in the contract. Otherwise, they don't supply, you can't do your job, they accuse you of breach of contract, even though they caused it.