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UPDATE - Freelancing while on dependent visa

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ellejay00sg
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Freelancing for a company w/o having a sole proprietorship

Postby ellejay00sg » Thu, 19 Sep 2013 2:35 pm

I'll just tag my question onto this post.

I am a DP holder. I applied to a company advertising a part-time position. After being selected, I was informed that because they cannot guarantee me a fixed number of hours a week, the contract will list me as a self-employed/freelancer not as a true part-time employee.

The flexibility of this position, the ability to be able to work from home after an agreed upon on-boarding period, and having only a few hours of work a week, is highly desirable. But when I brought up the subject of my contract stating I was to be a freelancer (contract for services), they said I did not need to have a sole proprietorship in order to work for them. The LoC they applied for for me, however, was approved!

Now, this seems to be contradictory to any information I read on the MOM website. This is a respectable MNC so I do not believe they are trying to pull the wool over my eyes. But I worry about tax and liability implications, things I would worry about if I were a "real" freelancer. And above all, if I was in a true freelancing position I would ask for 40% more hourly wage!

I feel now, I have sold myself very short. As a part-time employee with prorated vacation and sick leave, etc. this hourly salary would be acceptable, and this was my assumption when applying for the position. Not so any more.

I am prepared to renegotiate and turn down the job if necessary, but it would be unfortunate if I must do so. But is this type of contract extraordinary, simply local practice or highly illegal?

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Postby nutnut » Thu, 19 Sep 2013 7:51 pm

I'd suggest it's not highly illegal, but, also, bear in mind, contractors in Singapore generally don't get paid more than full time staff (normally less to be honest over all)

This is in IT, I suppose it depends what you are doing. You can try and renegotiate, but, you might find it's hard to find any other work in Singapore on an LoC.
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Re: Freelancing for a company w/o having a sole proprietorsh

Postby Strong Eagle » Thu, 19 Sep 2013 10:54 pm

ellejay00sg wrote:I'll just tag my question onto this post.

I am a DP holder. I applied to a company advertising a part-time position. After being selected, I was informed that because they cannot guarantee me a fixed number of hours a week, the contract will list me as a self-employed/freelancer not as a true part-time employee.

The flexibility of this position, the ability to be able to work from home after an agreed upon on-boarding period, and having only a few hours of work a week, is highly desirable. But when I brought up the subject of my contract stating I was to be a freelancer (contract for services), they said I did not need to have a sole proprietorship in order to work for them. The LoC they applied for for me, however, was approved!

Now, this seems to be contradictory to any information I read on the MOM website. This is a respectable MNC so I do not believe they are trying to pull the wool over my eyes. But I worry about tax and liability implications, things I would worry about if I were a "real" freelancer. And above all, if I was in a true freelancing position I would ask for 40% more hourly wage!

I feel now, I have sold myself very short. As a part-time employee with prorated vacation and sick leave, etc. this hourly salary would be acceptable, and this was my assumption when applying for the position. Not so any more.

I am prepared to renegotiate and turn down the job if necessary, but it would be unfortunate if I must do so. But is this type of contract extraordinary, simply local practice or highly illegal?


Apparently MOM believes that you are employed part time. What you should find out to clarify your position is whether the company will file an IR8A (same as US W2) on your behalf, or whether the expectation is that you will declare income (sole proprietorship or otherwise) and handle your own taxes.

If the latter, I find it hard to see how a LOC could have been issued.

With respect to other benefits... once you bust minimums for salary/hourly wage, your relationship with your employer is covered solely by your employment contract.

It has been my experience that more and more companies are going the contract route... or more precisely, hiring people in as a non-employee... a special category as it were.

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Postby ellejay00sg » Fri, 20 Sep 2013 8:49 am

Excellent answers guy. Many thanks!

I suspected the company applied for a LoC for me stating I would be part-time, then turned around and wrote in my employment contract that I would be a freelancer. But why? What is their advantage of doing this? As a DP holder with a LoC I'm one of the easiest people to be hired. I don't understand the trickery.

Anyhow, I've asked for a copy of the approved LoC because I want to see what they submitted after I filled out my part and I will ask them about the tax issue.

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Postby deliciousdott » Mon, 05 May 2014 8:20 am

Hi. I'm a student who intends to do an internship in Singapore but it's very likely that my visa application won't be successful. Hence, I am thinking about signing a contact with the company as a freelance.

In addition, I can enter Singapore without visa for maximum of 30days. So I can be in Singapore for 30days, back to my hometown for a few days then get back to Singapore.

Is it legal? Note that the salary is not high enough to pay tax so there won't be anything to do with IRAS.

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Postby the lynx » Mon, 05 May 2014 9:16 am

deliciousdott wrote:Hi. I'm a student who intends to do an internship in Singapore but it's very likely that my visa application won't be successful. Hence, I am thinking about signing a contact with the company as a freelance.

In addition, I can enter Singapore without visa for maximum of 30days. So I can be in Singapore for 30days, back to my hometown for a few days then get back to Singapore.

Is it legal? Note that the salary is not high enough to pay tax so there won't be anything to do with IRAS.


Highly illegal. Especially with you are doing the work in Singapore and get paid in Singapore too. If IRAS won't be hounding on your back, MOM will.

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Postby Ak1nza » Tue, 12 Aug 2014 9:13 am

Hi. I am a Singaporean Citizen and my wife has just received her LTVP. She has some offers for consultant/freelance work here in Singapore and I am trying to figure out the best way for her to be able to take on these projects. I understand the best method would have been her setting up a sole prop and then issuing a LOC to herself but that only applies to an LTVP+. Unfortunately, for some reason, the ICA officer only approved her for the LTVP (even though we have a child who is also a Singaporean Citizen and have been married for over 2.5 years). I was told I could not appeal, but could only re-apply for the LTVP+ after 6 months.

Does anyone know if it is possible for me to set up a sole prop and then hire my wife under a work permit? Any help on the actual process? How would I go about with regards to the issue of salary as she will be consulting/freelancing and not have a fixed monthly? Could I put a low salary amount of a few hundred (estimated less than her projects) and then just make up the difference in a 'bonus' payout later? Any other alternate ways that anyone here has experienced?

This has been a somewhat frustrating process for me as I fully expected we would get the LTVP+. I don't understand why the LOC does not apply to the LTVP as it applies to all other DP holders.

I would really appreciate any help! Thanks in advance!

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Postby PNGMK » Tue, 12 Aug 2014 10:21 am

Ak1nza wrote:Hi. I am a Singaporean Citizen and my wife has just received her LTVP. She has some offers for consultant/freelance work here in Singapore and I am trying to figure out the best way for her to be able to take on these projects. I understand the best method would have been her setting up a sole prop and then issuing a LOC to herself but that only applies to an LTVP+. Unfortunately, for some reason, the ICA officer only approved her for the LTVP (even though we have a child who is also a Singaporean Citizen and have been married for over 2.5 years). I was told I could not appeal, but could only re-apply for the LTVP+ after 6 months.

Does anyone know if it is possible for me to set up a sole prop and then hire my wife under a work permit? Any help on the actual process? How would I go about with regards to the issue of salary as she will be consulting/freelancing and not have a fixed monthly? Could I put a low salary amount of a few hundred (estimated less than her projects) and then just make up the difference in a 'bonus' payout later? Any other alternate ways that anyone here has experienced?

This has been a somewhat frustrating process for me as I fully expected we would get the LTVP+. I don't understand why the LOC does not apply to the LTVP as it applies to all other DP holders.

I would really appreciate any help! Thanks in advance!


1. You'll need to pay her a pretty hefty wage.
2. You need an arms length relationship.
3. It's probably more feasible for her to look for a job where she could get a WP/EP.

PR's are in the same boat mate - we have wives who can't work and yet bloody EP holders can get DPs and LOCs. It's a real gap in the mindset of the Gahmen.

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Postby ecureilx » Tue, 12 Aug 2014 10:54 am

PNGMK wrote:
PR's are in the same boat mate - we have wives who can't work and yet bloody EP holders can get DPs and LOCs. It's a real gap in the mindset of the Gahmen.


+1

the unwanted???

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Postby PNGMK » Tue, 12 Aug 2014 11:29 am

ecureilx wrote:
PNGMK wrote:
PR's are in the same boat mate - we have wives who can't work and yet bloody EP holders can get DPs and LOCs. It's a real gap in the mindset of the Gahmen.


+1

the unwanted???


more like "failure to compute".

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Postby Ak1nza » Tue, 12 Aug 2014 2:06 pm

PNGMK wrote:
Ak1nza wrote:Hi. I am a Singaporean Citizen and my wife has just received her LTVP. She has some offers for consultant/freelance work here in Singapore and I am trying to figure out the best way for her to be able to take on these projects. I understand the best method would have been her setting up a sole prop and then issuing a LOC to herself but that only applies to an LTVP+. Unfortunately, for some reason, the ICA officer only approved her for the LTVP (even though we have a child who is also a Singaporean Citizen and have been married for over 2.5 years). I was told I could not appeal, but could only re-apply for the LTVP+ after 6 months.

Does anyone know if it is possible for me to set up a sole prop and then hire my wife under a work permit? Any help on the actual process? How would I go about with regards to the issue of salary as she will be consulting/freelancing and not have a fixed monthly? Could I put a low salary amount of a few hundred (estimated less than her projects) and then just make up the difference in a 'bonus' payout later? Any other alternate ways that anyone here has experienced?

This has been a somewhat frustrating process for me as I fully expected we would get the LTVP+. I don't understand why the LOC does not apply to the LTVP as it applies to all other DP holders.

I would really appreciate any help! Thanks in advance!


1. You'll need to pay her a pretty hefty wage.
2. You need an arms length relationship.
3. It's probably more feasible for her to look for a job where she could get a WP/EP.

PR's are in the same boat mate - we have wives who can't work and yet bloody EP holders can get DPs and LOCs. It's a real gap in the mindset of the Gahmen.


Thanks for the responses. What exactly constitutes a 'hefty' wage? If I make her the manager of the sole prop would that be arms-length enough? Would a Private LTD company be a better solution (I don't see how it would be any different than sole prop)?

I understand it's best for her to get a WP/EP full-time position, but that is unfortunately not our situation right now.

If she were to operate her business out of the US (she is a US Citizen) and if the companies that hired her were willing to pay to my wife's US bank account, would this be ok?

I agree there's a gap with regards to DP's/LOCs etc. Any other potential solutions?

THANKS!

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Postby PNGMK » Tue, 12 Aug 2014 4:48 pm

Having a wage paid out of the US for work performed in Singapore by a non work permit / SC is technically illegal but probably won't be picked up.

A hefty wage means enough for a pass such as a P1/P2 whatever. However as she has a LTVP why bother?

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Re: UPDATE - Freelancing while on dependent visa

Postby LadyR0uge » Mon, 06 Apr 2015 12:56 pm

Hello. I am a Canadian citizen with a DP here. I am a 3d artist and I would like to work on a short-term contract for a company based in Montreal, Canada and that is not in Singapore. Do I have to register my business and get the LOC from MOM or since it has nothing to do with Singapore, I do not need the work permit?

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Re: UPDATE - Freelancing while on dependent visa

Postby Strong Eagle » Thu, 09 Apr 2015 10:12 pm

LadyR0uge wrote:Hello. I am a Canadian citizen with a DP here. I am a 3d artist and I would like to work on a short-term contract for a company based in Montreal, Canada and that is not in Singapore. Do I have to register my business and get the LOC from MOM or since it has nothing to do with Singapore, I do not need the work permit?


Before answering your question, I wrote to MOM, ACRA, and IRAS. So far, MOM and ACRA have responded.

MOM: Dependent Pass holder is not required to hold a work passes if he/she does not represent their overseas employer for any work related purposes while in Singapore. The foreigner may also perform work for the overseas employer via electronic or telecommunication from their home.

Note: MOM responded with this statement after seeking clarification from me about the particulars of a job. I made the particulars quite broad... either full time or part time, paid in Singapore or paid in a foreign bank, either simply emailing finished product or remotely using the company's resources. Thus, I judge from this statement that you DO NOT need a work permit to do the work you want to do.

ACRA responded as follows: Any activity which is carried out on a continual basis in Singapore for the purpose of gain is required to be registered with ACRA.

To register or incorporate a business entity, an identification number and SingPass are required to submit the application through BizFile. Individuals may also engage the services of a professional firm (e.g. lawyers, accountants, chartered secretaries) or a service bureau if they do not have a SingPass.


My interpretation: ACRA wants you to have a legal entity, because, and although IRAS has not yet replied, they want to ensure that a legal entity exists for income tax purposes.

So, I will wait upon the IRAS response then update... and my advice at this point is:

a) You don't need a work permit, which means you don't need a LOC, either.
b) You do need a sole proprietorship unless this is short duration work, but depending upon what IRAS says, the information supplied by ACRA may not be correct... it wouldn't be the first time.
c) You will be liable for personal income tax... my guess.

We shall see. If you want the contents of the letter I emailed to each of the three agencies, PM me.

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Re: UPDATE - Freelancing while on dependent visa

Postby Strong Eagle » Fri, 10 Apr 2015 7:52 pm

I have received a reply from IRAS.

In general, income will be considered a Singapore-sourced income if the service is not rendered through a fixed place of operation in a foreign jurisdiction and if one is carrying on a trade, business or profession of providing such a service in Singapore.

This is not withstanding that the income is derived from services rendered outside Singapore.

For specific case, please write to us with your full name, identification number and actual detail of your case in order for us to better assist you.

You may refer to our website for more information on foreign individual;
http://www.iras.gov.sg/irasHome/page01.aspx?id=88


While not addressing my specific questions, it does say that if you are earning income by carrying on a trade, business, or service in Singapore, then you are subject to taxation. Of course, you might want to actually call them with your specific circumstances as they have suggested, and if you do so, please post the outcome of your conversation.

Based upon the emails from MOM, ACRA, and IRAS, I judge that:

a) You don't need a work permit or LOC.
b) You do want to create a sole proprietorship.
c) You will file a personal income tax return with ACRA.

You probably won't pay any Canadian income tax as a result due to tax treaties.

Your other option, of course, is to simply fly under the radar. Realistically, working from home, for a company that has zero activities in Singapore is about impossible to detect.

I'd contact each of the aforementioned agencies by email with your specifics if you want to fly above the radar. This gives you a solid paper trail, especially for the work permit, for the future, and, you'd do others a service by posting the results of your specific situation.

Cheers.


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