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Which legal status for what professional activity?

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Lophophora
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Which legal status for what professional activity?

Post by Lophophora » Tue, 17 Apr 2018 4:20 pm

Hello,

I have read about doing business in Singapore on various web sites and on this forum, but I am still confused about what to do in my particular case.

I'm on a DP and have about 14 months left in Singapore (might be extended). I have never worked in Singapore but I now have an opportunity to start a business as an independent mixing engineer (music production). I have the gear, the skills and some clients already, I just need to find a way to legally be paid for my services.

Because this will likely be a 1-year lifespan activity only and part-time, and the revenues will probably be low (estimated $1500 monthly, although could increase after a few months), there is no point in incorporating a company.

The proper way to do this seems to be a sole proprietorship but I understand the rules have changed last year and a foreigner now have to either apply for an EntrePass (which I think isn't worth it for my project), or create a partnership with a resident partner. Is this correct? I couldn't find any detailed info on this local partner. Do I have to pay him? Does he have to be active in running the business? Does he have to assume any liability in the business?

Alternatively, I have thought about using a small business I still own in my home country (France). Is there anything illegal from Singapore's perspective about using a foreign small business to issue invoices to individuals or companies locally? There is no product or trade involved, just services.

Thanks a million if you can help me find my way through this.

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Re: Which legal status for what professional activity?

Post by Strong Eagle » Tue, 17 Apr 2018 10:30 pm

Lophophora wrote:Hello,

I have read about doing business in Singapore on various web sites and on this forum, but I am still confused about what to do in my particular case.

I'm on a DP and have about 14 months left in Singapore (might be extended). I have never worked in Singapore but I now have an opportunity to start a business as an independent mixing engineer (music production). I have the gear, the skills and some clients already, I just need to find a way to legally be paid for my services.

Because this will likely be a 1-year lifespan activity only and part-time, and the revenues will probably be low (estimated $1500 monthly, although could increase after a few months), there is no point in incorporating a company.

The proper way to do this seems to be a sole proprietorship but I understand the rules have changed last year and a foreigner now have to either apply for an EntrePass (which I think isn't worth it for my project), or create a partnership with a resident partner. Is this correct? I couldn't find any detailed info on this local partner. Do I have to pay him? Does he have to be active in running the business? Does he have to assume any liability in the business?

Alternatively, I have thought about using a small business I still own in my home country (France). Is there anything illegal from Singapore's perspective about using a foreign small business to issue invoices to individuals or companies locally? There is no product or trade involved, just services.

Thanks a million if you can help me find my way through this.
If you do any business locally, you must have a registered legal entity in Singapore. Therefore, the answer to your question regarding using your foreign small business is, "No, you can't, because you reside in Singapore and you do business in Singapore."

Entrepass will never fly... don't even think about it. You can try for SP and LOC... that will be easiest, you might get it... you're business doesn't seem to be the kind that steals jobs from locals.

Otherwise, you only have two choices.

a) Form a company, rent a director, and apply for an EP for yourself... which, as you said, is pointless if this is a year long project.

b) Find a company willing to hire you and apply for your LOC for a percentage of your profits.

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Re: Which legal status for what professional activity?

Post by Lophophora » Tue, 17 Apr 2018 11:06 pm

Thank you, you are confirming what I thought, that a SP with a local partner is the only viable solution.

Do you know wher/how I can get answers to my questions about the partner? I can't find anything about that on the ACRA or MoM web sites. I already have someone I'm considering sas a partner but I need to know:

- Do I have to pay him?
- Does he have to be active in running the business or is his presence on the paperwork enough?
- Does he have to assume any liability in the business?

Just a question about the whole partner thing: on this page (ACRA) I can read this:

The local authorised representative
(a) a natural person;
(b) at least 18 years of age;
(c) otherwise of full legal capacity; and
(d) ordinarily resident in Singapore.

Unless I have a semantic problem on the word resident, it seems to me that I meet all of the above requirements. So why do I need a PR or Singaporean partner?

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Re: Which legal status for what professional activity?

Post by Strong Eagle » Wed, 18 Apr 2018 1:21 am

Lophophora wrote:Thank you, you are confirming what I thought, that a SP with a local partner is the only viable solution.

Do you know wher/how I can get answers to my questions about the partner? I can't find anything about that on the ACRA or MoM web sites. I already have someone I'm considering sas a partner but I need to know:

- Do I have to pay him?
- Does he have to be active in running the business or is his presence on the paperwork enough?
- Does he have to assume any liability in the business?

Just a question about the whole partner thing: on this page (ACRA) I can read this:

The local authorised representative
(a) a natural person;
(b) at least 18 years of age;
(c) otherwise of full legal capacity; and
(d) ordinarily resident in Singapore.

Unless I have a semantic problem on the word resident, it seems to me that I meet all of the above requirements. So why do I need a PR or Singaporean partner?
You do not need a Singaporean/PR partner to start a SP... just go to ACRA and register it. Because you have legal residence in Singapore, you are the local authorized representative. Then you go apply for a LOC to work for your SP. This has become harder to do for two reasons.

a) There is a chicken and egg situation. How can you apply for a LOC if you are not working for the company, and, how can you be working for the company to apply for a LOC if you don't already have a LOC. I suspect most have gotten around this issue, at least the ones that were successful in getting a LOC.

b) The original intent of a LOC was to permit a trailing spouse of an EP to work, and I judge that the thought was that a trailing spouse would sorta kinda be working in a professional environment. But then, along come someone who opens a SP and wants to clean houses on a LOC. This is not what the government envisioned and this is why SP/LOC combos have been denied. Your task, then, is to convince the authorities you have a real business, one that doesn't compete against low end jobs in Singapore, and one that isn't just a hobby.

You must have an outside director if you form a private limited because you cannot work for a pte ltd without a work permit, and therefore cannot apply for your own EP... you're not earning enough to qualify for an EP anyway.

I have no pipeline into MoM and I judge that the SP/LOC route will be best for you, and that's still "iffy". All you can do is try, being aware that your big job is to convince the authorities that you have a real business, the cash to fund and finance it, and the know how to run it.

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Re: Which legal status for what professional activity?

Post by Lophophora » Wed, 18 Apr 2018 7:52 am

Thank you for your time. I have already contacted ACRA and MoM and will go forward according to what they answer is.

What you said matches what I could read on the ACRA site, I don't know why so many of the expats told me it wasn't possible to start a SP without partnering, some of them event told me it was no longer to start an SP even for a Singaporean! Some rumors are persistent.

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Re: Which legal status for what professional activity?

Post by Strong Eagle » Wed, 18 Apr 2018 10:39 am

Lophophora wrote:Thank you for your time. I have already contacted ACRA and MoM and will go forward according to what they answer is.

What you said matches what I could read on the ACRA site, I don't know why so many of the expats told me it wasn't possible to start a SP without partnering, some of them event told me it was no longer to start an SP even for a Singaporean! Some rumors are persistent.
They have probably confused it with starting a private limited. You can start your own private limited and be the sole shareholder but only a director can apply for an EP for you. And since you don't have an EP, you can't be a director, and hence, you need the outside director at least until such time as you get your own EP and can become managing director.

But again, given the short amount of time you are talking about, the time, expense, and hassle won't be worth it.

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Re: Which legal status for what professional activity?

Post by Lophophora » Wed, 18 Apr 2018 6:44 pm

Ok I have contacted ACRA and MoM but didn't get a lot more information for now. I have also contacted a consulting company and here is what they told me:

Recently the MoM has stopped granting LoCs to SP owners, including those who are already in business and had previously got their LoC for exactly the same business. They either have to shift to a Pte Ltd or go out of business. This is not something on which the MoM communicates officially, but they seem to consistently reject all LoCs.

Of course this could be a vicious selling technique but it seems to corroborate things I already read or heard. Any of you heard about that?

Can I apply for a LoC myself or do I have to use a registered filing agent? Does it cost something to apply for a LoC? If it is simple and cheap I'd like to try anyway and see for myself.

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Re: Which legal status for what professional activity?

Post by Strong Eagle » Wed, 18 Apr 2018 10:26 pm

Lophophora wrote:Ok I have contacted ACRA and MoM but didn't get a lot more information for now. I have also contacted a consulting company and here is what they told me:

Recently the MoM has stopped granting LoCs to SP owners, including those who are already in business and had previously got their LoC for exactly the same business. They either have to shift to a Pte Ltd or go out of business. This is not something on which the MoM communicates officially, but they seem to consistently reject all LoCs.

Of course this could be a vicious selling technique but it seems to corroborate things I already read or heard. Any of you heard about that?

Can I apply for a LoC myself or do I have to use a registered filing agent? Does it cost something to apply for a LoC? If it is simple and cheap I'd like to try anyway and see for myself.
a) Register a sole proprietorship in your name at ACRA: https://www.acra.gov.sg/components/wire ... ageid=1087

b) Apply for a LOC at MoM: http://www.mom.gov.sg/passes-and-permit ... of-consent

Be prepared for an initial rejection. Have your documents ready. Appeal. Who knows what will happen. The latest posts from the forums have not been entirely encouraging.

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Sole Proprietorship on Dependent's Pass - UPDATE 2019

Post by Bluedipper » Fri, 06 Dec 2019 11:00 am

Strong Eagle wrote:
Wed, 18 Apr 2018 10:26 pm

a) Register a sole proprietorship in your name at ACRA: https://www.acra.gov.sg/components/wire ... ageid=1087

b) Apply for a LOC at
    MoM: http://www.mom.gov.sg/passes-and-permit ... of-consent

    Be prepared for an initial rejection. Have your documents ready. Appeal. Who knows what will happen. The latest posts from the forums have not been entirely encouraging.

    Hello,

    I am a freelance designer and after reading all the fantastic information available over the years on this forum I went to register for Sole Proprietorship on the ACRA website (as Strong Eagle so helpfully outlined in the above post).

    However, their website now specifically says:
    To set up a sole proprietorship or partnership, you must be:
    - At least 18 years old
    - A Singapore Citizen, Singapore Permanent Resident, or an EntrePass Holder

    ACRA Direct link here: https://www.acra.gov.sg/how-to-guides/s ... -singapore

    I have emailed them and am waiting to hear back, but in the meantime, does anyone know if there is a way around this or has the legislation recently changed?!!

    Thank you in advance

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    Re: Which legal status for what professional activity?

    Post by sundaymorningstaple » Fri, 06 Dec 2019 12:44 pm

    As you can see by the ACRA direct link you posted, ACRA is a function of the Singapore Government .gov.sg being a designation reserved wholly for the Singapore Government. Therefore you can take it as having been legislated. This was done to close the loophole.

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    Re: Which legal status for what professional activity?

    Post by Bluedipper » Fri, 06 Dec 2019 1:14 pm

    sundaymorningstaple wrote:
    Fri, 06 Dec 2019 12:44 pm
    As you can see by the ACRA direct link you posted, ACRA is a function of the Singapore Government .gov.sg being a designation reserved wholly for the Singapore Government. Therefore you can take it as having been legislated. This was done to close the loophole.
    Thanks for confirming sundaymorningstaple. After trawling through all the past articles I was so excited at having found a relatively straightforward way to freelance here - but looks like I'm too late. ](*,)

    Was hoping it was going to be a case of ask MOM enough times and you'll get an answer that works, lol

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    Re: Which legal status for what professional activity?

    Post by sundaymorningstaple » Fri, 06 Dec 2019 4:24 pm

    I think another of our readers is also having a similar problem. The problem is, when people find a loophole, they cannot help but brag about it, which causes the government to immediately close the loophole. Can't blame them. For the record, we do know, for a fact, that the MOM monitors this board. ICA may well monitor it as well (but no actual confirmation). I know the former for a fact as I've been contacted personally via the Admin here on two occasions whereby I was invited as a panel member on a CNA TV program regarding PRs (me also being one) and the other time at a sit down interview with one of MOM director's and a couple of his subordinates for a 20 or 30 minute interview that actually lasted almost 3 hours (in a friendly environment outside of the old Havelock Rd MOM office). This was because of our work on this forum and mine primarily with regards to my ideas on how to speed up the appeals process. This was a fair number of years ago, but what I am saying is the the MOM & ICA keep their ears to the ground. This is also why we tend to be straight shooters and do not brook any nonsense, generally speaking - we have a very good reputation and in fact before the last website revamp by the MOM, we were also listed as a link for additional information for two different subjects on the MOM site.

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    Re: Which legal status for what professional activity?

    Post by Bluedipper » Mon, 09 Dec 2019 10:54 am

    sundaymorningstaple wrote:
    Fri, 06 Dec 2019 4:24 pm
    I think another of our readers is also having a similar problem. The problem is, when people find a loophole, they cannot help but brag about it, which causes the government to immediately close the loophole. Can't blame them. For the record, we do know, for a fact, that the MOM monitors this board. ICA may well monitor it as well (but no actual confirmation). I know the former for a fact as I've been contacted personally via the Admin here on two occasions whereby I was invited as a panel member on a CNA TV program regarding PRs (me also being one) and the other time at a sit down interview with one of MOM director's and a couple of his subordinates for a 20 or 30 minute interview that actually lasted almost 3 hours (in a friendly environment outside of the old Havelock Rd MOM office). This was because of our work on this forum and mine primarily with regards to my ideas on how to speed up the appeals process. This was a fair number of years ago, but what I am saying is the the MOM & ICA keep their ears to the ground. This is also why we tend to be straight shooters and do not brook any nonsense, generally speaking - we have a very good reputation and in fact before the last website revamp by the MOM, we were also listed as a link for additional information for two different subjects on the MOM site.
    Completely understand @sundaymorningstaple. The information and advice from moderators on this site has been exemplary, and it was just a case of finding out what the latest regulations are. I have no desire to contravene any laws or loopholes which is why I was so enthusiastic about taking the Sole Proprietorship forward - just very disappointed that this avenue for DP's to work has now been closed. Time to start the job hunt!

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