UPDATE - Freelancing while on dependent visa

[CrystalWater]

Thank you for your input.

I am wondering if you can also shed any light on the following...

With regards to a PEP holder, can they be a Director of a company. I have been into MOM and they said "No" ??? I have rang MOM today and spoke to a consultant who said "yes". I have recorded her details for future reference but was wondering if you have come across this before?

Kind regards.

[Addadude]

To the best of my knowledge, if you are NOT a Singapore citizen or PR, you CANNOT be a director of a local company. You can be a shareholder but not a director. I know this because a few years ago, before I got around to applying for PR, I set up a local coffee shop business with 4 local friends. They all became directors of the company but I could only be registered as a shareholder because I was only on an EP at the time.

[Strong Eagle]

To the best of my knowledge, if you are NOT a Singapore citizen or PR, you CANNOT be a director of a local company. You can be a shareholder but not a director. I know this because a few years ago, before I got around to applying for PR, I set up a local coffee shop business with 4 local friends. They all became directors of the company but I could only be registered as a shareholder because I was only on an EP at the time.

WRONG!

"With effect from 1 April 2004, a company must have at least one director who is a “ordinarily resident in Singapore”

[sundaymorningstaple]

Unless of course he tried to open the coffeeshop before April 2004? I don't remember what the rules were before that though.

[Strong Eagle]

Thank you for your input.

I am wondering if you can also shed any light on the following...

With regards to a PEP holder, can they be a Director of a company. I have been into MOM and they said "No" ??? I have rang MOM today and spoke to a consultant who said "yes". I have recorded her details for future reference but was wondering if you have come across this before?

Kind regards.

This is highly unknown at this point. What is known is that an EP cannot be a director of a company, operating under the assumption that an EP is already full time employed by another company.

A PEP is an employment pass and you must find work within 6 months, otherwise you get the heave ho. OTOH, if you started a company and worked for it, you would be gainfully employed.

What you should do is ask this same question by email and see what response you get. I bet the answer will be no because it would open the door for bunches on unemployed EP's to get a PEP, start a company, then stay indefinitely. I can't see it but I could be wrong.

[Strong Eagle]

Unless of course he tried to open the coffeeshop before April 2004? I don't remember what the rules were before that though.

All of the rules were the same except that you had to have two resident directors.

[Addadude]

Unless of course he tried to open the coffeeshop before April 2004? I don't remember what the rules were before that though.

I 'failed' to qualify because I was just a humble EP holder. It's odd that, for example, a wife who is a DP can be a director but not her husband who is holding the EP - and thus the reason why she got the DP in the first place!

[sundaymorningstaple]

Don't make much sense does it.

[sierra2469alpha]

...What is known is that an EP cannot be a director of a company, operating under the assumption that an EP is already full time employed by another company...

[Note: my emphasis]

That is a salient point that people should not overlook. If you have an ordinary citizen as one director, an EP holder of the same company CAN be a director.

HTH, Mr. P

[cracktojack]

we got very bad news today... that my wife who's on DP, her LOC applciation is rejected.

We are in a fix, because she has setup her own compnay after meeting MOM and then ACRA. Now she is the director of the compnay, but to work for compnay, she applied for LOC for the post of "CEO". Today we found that her LOC application rejected.

1. Does "CEO" post was responsible for rejection?
2. My EP (and hence her DP) is valid for 24 months and 3 months are already passed, still we wrote 24 months in the application. Does this one make impact?
3. Or that she put $100 as salary. Does this make issue?
4. May be because we haven't stayed for 183 days in singapore yet, made any rejection?
5. She hasn't submitted any other docs except bizfile docs. Does she has to submit her CV and other docs also?

Problem, is within 3 months she has to appoint auditors and in 6 months CS. And moreover we were quite sure that there won't be any issue with LOC being straight forward startup case, we have already invested a lot for company's products and website etc.

What to do.... Should she appeal? Anyone in MOM we can contact?

SE.. pls help

[sundaymorningstaple]

It would appear that my earlier thoughts might have been correct. That or MOM didn't thinks it was viable and therefore nixed it. I don't have a contact but maybe SE can find out something as he has had several dialogs with them about this sort of thing.

[Strong Eagle]

we got very bad news today... that my wife who's on DP, her LOC applciation is rejected.

We are in a fix, because she has setup her own compnay after meeting MOM and then ACRA. Now she is the director of the compnay, but to work for compnay, she applied for LOC for the post of "CEO". Today we found that her LOC application rejected.

1. Does "CEO" post was responsible for rejection?
2. My EP (and hence her DP) is valid for 24 months and 3 months are already passed, still we wrote 24 months in the application. Does this one make impact?
3. Or that she put $100 as salary. Does this make issue?
4. May be because we haven't stayed for 183 days in singapore yet, made any rejection?
5. She hasn't submitted any other docs except bizfile docs. Does she has to submit her CV and other docs also?

Problem, is within 3 months she has to appoint auditors and in 6 months CS. And moreover we were quite sure that there won't be any issue with LOC being straight forward startup case, we have already invested a lot for company's products and website etc.

What to do.... Should she appeal? Anyone in MOM we can contact?

SE.. pls help

The big question is: What is the business? And why only $100? Both of these are issues. Nobody works for $100 per month... why did you indicate this salary?

What products? Is this an MLM? Guaranteed to get rejected. How are you selling? Bricks and mortar store? Web? More information needed.

[cracktojack]

What is the business?
Business is an online art gallery which deals in limited edition of arts and handicrafts

And why only $100?

We are trying to bootstrap. Reason, we are not singaporeans and not PR and hence we are not getting any grant as such from govt. Company being a startup, banks won't lend money at this stage and hence we are taking personal loan and funding this business with $10,000. Hence it makes sense that we try to repay the loan first and not take salary. We asked MOM while submitting LOC application and they told, for them salary is not an issue. Still we put salary as $100 per month. Frankly, if director puts its salary as say $5000 per month, company will be cash strippped in 2 months (untill and unless company becomes huge hit in first two months and get cash rich)


Is this an MLM?

MLM?

How are you selling? Bricks and mortar store? Web?

Currently web and later as business grows, brick and mortar store also. But being dependent pass holder and hence how we can submit this info to MOM untill and unless we submit them a business plan[/b]

[Strong Eagle]

Don't panic yet. As I wrote earlier, the information I was given over the phone was that MOM would only reject an LOC if the business was essentially one of the disallowed businesses as described in the Entrepass section of the MOM website.

So, there are several possible factors at work.

a) You talked to a person who said it could be done as did I, yet when you actually went to do it, yet another person rejected the LOC. This person could be uninformed (or maybe the ones you and I talked to were uninformed).

b) It could be that a payment of $100 made the reviewer think this was not a real business. It was probably not the person you talked to.

c) It could be that MOM may have gotten cold feet... maybe they think this is a new way for people who are about to lose EP to try and stay in Singapore... I don't know and I doubt this is the reason.

Bottom line: I'd say that the reason your LOC was rejected was because the person reviewing didn't understand what you are doing. I would appeal and include at least the following documents:

a) A short business plan including pro forma financials to show that this is a real business with real plans. Explain why this is entrepreneurial in nature.

b) Fully explain why the salary is $100 right now but be sure to include a chart showing expected salaries based on growth... and make sure that salary grows to an EP P1 level.

c) Change CEO to 'Managing Director'... still a director but no fancy title for a Singapore business.

d) Note that you hold a 2 year EP, expect to keep it and that will give the business time to grow.

[ksl]

My thought would be that this kind of business falls under the sole proprietor and not a Company. This is much like self employment and should be applied for in that manner also with a business plan, for the next 3 years.

At present your potential business plan is more of a hobby and is probably insignificant until you are earning amounts of monies, that are liable for tax. I would specifically discuss the minimum requirements with ACRA, on the amount of monies one can earn, before becoming liable as a business identity.

You will fall under self employment, so an EP is out of the question, you need the entre pass in this case and a bond of 3K or a sponsor, which could be your spouses Company.

So without a doubt, they have just binned the application as not feasible, because of a lack of business planning and forecasting, which needs to be done. Like SE explained. All is not lost.

Here you will see that you cannot even be classified as Self Employed until you have annual net earnings of 6000$ So you really do need to find out your minimum liabilities, basically the authorities would just ignore what you are doing until it becomes significant.

Although it is your responsibility to understand the laws, and to self regulate, failure to do that will see you in trouble. The way I see it, you just carry on with your hobby until the income is turned over to a viable level, that becomes significant for the authorities.

A local accountant should know the rules inside out, and this is probably also why street hawkers sell without a licence and sell at car boot sales because licences are only required for goods, that are imported and health & safety requirements for foods . So basically anyone can sell to the limit of self employment. Net 6k until then its a hobby.

http://www.acra.gov.sg/NR/rdonlyres/10C ... andYou.pdf