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Setting up own business on PEP

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Setting up own business on PEP

Postby RW » Fri, 17 Apr 2009 9:39 pm

I am planning to set up my own small business (sole proprietor) here in Singapore selling software. I lived here for 3 years now and used to work in the banking sector. As I am currently a PEP holder I understand that I couldn't set up the business in my own name.

Since my fiance is a Singapore citizen I was wondering if it would be possible to open the business in her name and have her employ me to operate the store?

As a PEP holder are there any restrictions for me to be employed by her? Would there be any justification required to MOM for not employing a Singapore citizen?

Also, since my fiance is under employment (foreign bank) is it even possible for her to run a business besides her current job? Are there any restrictions on running a business parallel?

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Re: Setting up own business on PEP

Postby sundaymorningstaple » Fri, 17 Apr 2009 10:19 pm

RW wrote:I am planning to set up my own small business (sole proprietor) here in Singapore selling software. I lived here for 3 years now and used to work in the banking sector. As I am currently a PEP holder I understand that I couldn't set up the business in my own name.

Since my fiance is a Singapore citizen I was wondering if it would be possible to open the business in her name and have her employ me to operate the store?

Theoretically yes.

As a PEP holder are there any restrictions for me to be employed by her? Would there be any justification required to MOM for not employing a Singapore citizen?

You would still have to meet the requirement as set out by MOM re: salary minimums and the required forms verifying same would still have t be filed. If it were found that you were not drawing said salary then you wife might be accused of one of the many tax dodges being used and have been in the papers recently (The latest today).

No she wouldn't have to justify to MOM as the PEP is not employer sponsored. It is based solely on the merits of the individual.

Also, since my fiance is under employment (foreign bank) is it even possible for her to run a business besides her current job? Are there any restrictions on running a business parallel?

That is something she would have to clear with her banking employer. Her employer may have a codicil preventing her but aside from that there is no bar to her having a business as well.

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Re: Setting up own business on PEP

Postby ksl » Sat, 18 Apr 2009 12:53 am

RW wrote:I am planning to set up my own small business (sole proprietor) here in Singapore selling software. I lived here for 3 years now and used to work in the banking sector. As I am currently a PEP holder I understand that I couldn't set up the business in my own name.

Since my fiance is a Singapore citizen I was wondering if it would be possible to open the business in her name and have her employ me to operate the store?

As a PEP holder are there any restrictions for me to be employed by her? Would there be any justification required to MOM for not employing a Singapore citizen?

Also, since my fiance is under employment (foreign bank) is it even possible for her to run a business besides her current job? Are there any restrictions on running a business parallel?


This would be the most expensive way for a start up and not at all feasible, without proper research, however your PEP is for 6 months i believe, that give's you plenty of time to come up with a business plan, for yourself, so that you can apply for the entrepass, while under the PEP.

I think by having your girlfriend involved, is the most easiest indication that you are just trying to stay on in Singapore, which many would also do, but i advise you not to be tempted to walk down the path of no return. It would cost the pair of you dearly.

You shouldn't show your emotional weakness in a desperate move to secure your residence, that isn't logical under the circumstances, and probably wouldn't work with MOM.

However your own business is still an alternative I would believe.

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Postby RW » Sun, 19 Apr 2009 1:33 pm

This would be the most expensive way for a start up and not at all feasible, without proper research, however your PEP is for 6 months i believe, that give's you plenty of time to come up with a business plan, for yourself, so that you can apply for the entrepass, while under the PEP.


Why would this be the most expansive way or any more expansive than applying to an entrepass and then set up the business?


I think by having your girlfriend involved, is the most easiest indication that you are just trying to stay on in Singapore, which many would also do, but i advise you not to be tempted to walk down the path of no return. It would cost the pair of you dearly.

You shouldn't show your emotional weakness in a desperate move to secure your residence, that isn't logical under the circumstances, and probably wouldn't work with MOM.


To start my own business is actually not an afterthought to stay in Singapore. I have been planning to do this for some time now. Also, I don't see why there would be a problem with MOM also as the only condition to hole a PEP is to earn at least SGD 30K a year?

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Postby ksl » Sun, 19 Apr 2009 5:08 pm

RW wrote:
This would be the most expensive way for a start up and not at all feasible, without proper research, however your PEP is for 6 months i believe, that give's you plenty of time to come up with a business plan, for yourself, so that you can apply for the entrepass, while under the PEP.


Why would this be the most expansive way or any more expansive than applying to an entrepass and then set up the business?


I think by having your girlfriend involved, is the most easiest indication that you are just trying to stay on in Singapore, which many would also do, but i advise you not to be tempted to walk down the path of no return. It would cost the pair of you dearly.

You shouldn't show your emotional weakness in a desperate move to secure your residence, that isn't logical under the circumstances, and probably wouldn't work with MOM.


To start my own business is actually not an afterthought to stay in Singapore. I have been planning to do this for some time now. Also, I don't see why there would be a problem with MOM also as the only condition to hole a PEP is to earn at least SGD 30K a year?


1. You have to look ahead, if your girlfriend sets up the business, and employ's you, you have no say in the business at all, she can even drop you, anytime she wish's.... You may think well she depends on you because you are the tangible asset in HER business. Not true you are expendable at anytime. Although that would be taking it to the extreme, but costly for you, if you build up a client base. Not only that, you may run into the girlfriend having a position which is a conflict of interest to the bank she works for. You would have to ask at the bank where she works.

If you have her involved on an equal footing you are not a sole proprietor are you, either way of the two ideas you have could possibly cost you more than you ever wished to think about. If she dumps you!

To start my own business is actually not an afterthought to stay in Singapore.


It really doesn't matter when you thought about it, but it does puzzle me, that you say you cannot set up the business in your own name because you are on a PEP. why not? People on employment pass can also have their own business, as long as it doesn't interfere with their employment, that means not getting actively involved in working hours. In your case if you have not found a job while being on PEP, you should submit your own business plan before you have to leave the Country, if it's approved you can stay on.

Besides your girlfriend would probably run into the quota rule, if the business was set up in her name, surely you are not that good, that it would exempt her from taking Singaporeans first for the position you want.

It is obvious however you are looking for a way to stay on when your PEP runs out, only 30K you say, but you have no job have you? Maybe she was going to do something illegal like fix you up with a contract in her bank...who knows.

All I'm saying is don't believe you can take the short rute, without getting caught out, which many do. Deep research is needed and everything in writing, not by word of mouth, to cover your own self, because ignorance of the facts is no excuse.

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Postby sundaymorningstaple » Sun, 19 Apr 2009 6:15 pm

ksl wrote:People on employment pass can also have their own business, as long as it doesn't interfere with their employment, that means not getting actively involved in working hours. In your case if you have not found a job while being on PEP, you should submit your own business plan before you have to leave the Country, if it's approved you can stay on.


Hate to disagree with you ksl, but in order to register a Singapore business you must be either a citizen or a PR. People on Employment Passes can ONLY work for the company who sponsor their Employment Pass. This also means that you cannot work for one company and have a business or for that matter work for two companies. In the case of the PEP, they must use the EntrePass route or work for Someone else's company (like the wife's/girlfriend). As they are on a PEP, they don't have to qualify for the EP so there wouldn't be a problem with the approval as long as the salary figure is correct.

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Postby ksl » Sun, 19 Apr 2009 6:33 pm

sundaymorningstaple wrote:
ksl wrote:People on employment pass can also have their own business, as long as it doesn't interfere with their employment, that means not getting actively involved in working hours. In your case if you have not found a job while being on PEP, you should submit your own business plan before you have to leave the Country, if it's approved you can stay on.


Hate to disagree with you ksl, but in order to register a Singapore business you must be either a citizen or a PR. People on Employment Passes can ONLY work for the company who sponsor their Employment Pass. This also means that you cannot work for one company and have a business or for that matter work for two companies. In the case of the PEP, they must use the EntrePass route or work for Someone else's company (like the wife's/girlfriend). As they are on a PEP, they don't have to qualify for the EP so there wouldn't be a problem with the approval as long as the salary figure is correct.


yes i agree with you, maybe i should have been more clear on the employment pass, you can have your own business, but cannot be active in it, it does state clearly, that EP holders may register a business providing it doesn't interfere with their EP duties, I'll see if i can locate the link.

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Postby Strong Eagle » Sun, 19 Apr 2009 6:39 pm

ksl wrote:yes i agree with you, maybe i should have been more clear on the employment pass, you can have your own business, but cannot be active in it, it does state clearly, that EP holders may register a business providing it doesn't interfere with their EP duties, I'll see if i can locate the link.


I think what it it says is that EP's or DP's can be DIRECTORS of a company. I see nothing to keep a DP from registering a company.

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Postby RW » Sun, 19 Apr 2009 7:25 pm

1. You have to look ahead, if your girlfriend sets up the business, and employ's you, you have no say in the business at all, she can even drop you, anytime she wish's.... You may think well she depends on you because you are the tangible asset in HER business. Not true you are expendable at anytime. Although that would be taking it to the extreme, but costly for you, if you build up a client base. Not only that, you may run into the girlfriend having a position which is a conflict of interest to the bank she works for. You would have to ask at the bank where she works.

If you have her involved on an equal footing you are not a sole proprietor are you, either way of the two ideas you have could possibly cost you more than you ever wished to think about. If she dumps you!


I see now where you are coming from. What you are suggesting is of course a theoretical possibility. However let's assume that I can rule out her bumping me from ever happening. I am more than willing to take this chance.

The thing with her having a conflict of interest with her current employer is of course something to be considered and looked at.


It really doesn't matter when you thought about it, but it does puzzle me, that you say you cannot set up the business in your own name because you are on a PEP.


Of course I could apply for an entre pass and submit a business plan to MOM. But why would I go through the hassle of doing this with a high chance that it won't be approved by MOM while I have the support of Singapore citizen to set up the business?

Besides your girlfriend would probably run into the quota rule, if the business was set up in her name, surely you are not that good, that it would exempt her from taking Singaporeans first for the position you want.


As I understand the PEP scheme I can basically be employed the same as a PR holder. There is no obligation on the employer’s side to apply for any EP or meet quota rules. The only rule is the minimum annual salary of 30K.

In the case of the PEP, they must use the EntrePass route or work for Someone else's company (like the wife's/girlfriend). As they are on a PEP, they don't have to qualify for the EP so there wouldn't be a problem with the approval as long as the salary figure is correct.


My understanding exactly.

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Postby ksl » Sun, 19 Apr 2009 7:28 pm

Strong Eagle wrote:
ksl wrote:yes i agree with you, maybe i should have been more clear on the employment pass, you can have your own business, but cannot be active in it, it does state clearly, that EP holders may register a business providing it doesn't interfere with their EP duties, I'll see if i can locate the link.


I think what it it says is that EP's or DP's can be DIRECTORS of a company. I see nothing to keep a DP from registering a company.
Yes it is something like that, it's actually a couple of years ago since i saw it, but it did cover DP & EP's that wanted to set up a business in name only, they wasn't actually seeking employment in the Company., because like SMS says, they are employed. But I am 98% sure i have read the link that says, there is nothing to stop an EP holder registering a business, providing he is not actively involved in the business. Thanks SE.

Although so many things are changing now, maybe it is scrapped, I did a search and nothing came up.

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Postby ksl » Sun, 19 Apr 2009 7:47 pm

RW, I think probably with your track record of 3 years with a bank, it would only be feasible to have your own business, in this economical climate. My belief is that MOM looks at the business plans, from a rather autocratic view point, and are quite reasonable providing you can show them a feasible way of existence that may develop into something bigger, and employing Singaporeans.

Banks are not hiring, but to have a bunch of programmers on stand bye, is only creative thinking and a good start for survival, so if you are able to setup a biz, and a contract from the bank, you are well on your way to a viable business plan, your just freelance at the moment and you can recruit others in the same position too, in different fields of employment.

I would certainly consider submitting for the entrpass, based on your experience, you will not have to drop the PEP unless you get it, and if you get a job before it materialises, it wouldn't matter anyway.

Other than that, why not just tie the knot and start suffering :lol: Only joking or am I :roll:

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Postby sundaymorningstaple » Sun, 19 Apr 2009 11:05 pm

For a foreigner wanting to Register a Business in Singapore:

http://www.acra.gov.sg/Services/Busines ... siness.htm

For a foreigner wanting to Register a Company in Singapore see link above and link below:

http://www.acra.gov.sg/Services/Company ... ompany.htm

Basically, you need to be a Singaporean or PR or have an Approved Entrepass.

sms

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Postby RW » Sun, 19 Apr 2009 11:55 pm

Am I correct in assuming that a Business (Sole Proprietor) can employ people/staff like a Company can?


Other than that, why not just tie the knot and start suffering Only joking or am I

:wink: :lol:

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Postby Strong Eagle » Tue, 21 Apr 2009 7:19 pm

RW wrote:Am I correct in assuming that a Business (Sole Proprietor) can employ people/staff like a Company can?


Yes, you can run a large business as a sole proprietor. Just consider the following.

a) Your business is filed as part of your personal tax return which means
b) You have no firewall for liability protection... all your personal assets are available for grabs because you do not have a business vehicle.
c) You'll find it harder to get bank accounts, lines of credit, factoring facilities, and general credence. A limited liability company has significant benefits and your tax liabilities are not that bad.


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