Stoven wrote:SE,
So if you are a U.S. citizen working in Singapore and paid by a U.S. company you do not get any U.S. tax exemptions? But if you are paid by a foreign company you can get the $82k tax exemption?
How will setting up a business here help? Do you have to register your company and have your employer pay the company in USD and then have your company pay your salary in SGD?
I am just curious because I am looking into possibly working remotely in Singapore for a U.S. company. I would be working like a contractor. So if I setup a small contractor company and have my employer pay the company and not me directly I can take advantage of the tax exemption?
Thanks,
Steve
There are a couple of approaches which could be taken to reduce tax. In the first case, the company itself would incorporate a wholly owned subsidiary here in Singapore, a private limited. The Singapore company would then hire/transfer the employee, pay her wages, CPF, medical, etc in Singapore. She could take the earned income exclusion.
For this to work, the US company would need to be willing to do this, and have some knowledge of how to do it, and of course would have to account for the subsidiary on their books.
The other option would be for the employee to become a contractor to the company. One files an Entrepass application to provide professional software services, noting that a) You already have the contract in line, b) No Singapore job is affected, and c) You will be paying taxes, using Singapore banks, etc. No telling how MOM works but I think this would fly.
The US company would be invoiced and would pay to your Singapore company's bank via wire transfer. You would be responsible for your own medical, CPF, etc, expenses of running the company, etc, and should be reflected in your rate.
