Working abroad under your own Singapore-registered company

[StockAnswer]

Hi all,

I wanted to ask about whether anyone has experience of starting their own company in Singapore and then working abroad under this company.

I have lived in Singapore for a year on Employment Pass and now have received an offer for a contract role in Hungary (IT consulting). The company has offered me to hire me under my own company, if I have one. They would pay the agreed rate + VAT to my company and I would be responsible for the taxes and other stuff.

Currently I do not yet have a company in my own name but, from the looks of it, it seems to be quite easy to register one.

On another hand I am bit concerned about how this could work in practice because I would think that...
1. The Hungarian company would have to make the payment to my Singapore company bank account here in Singapore.
2. I would then (whilst in Hungary) retrieve the funds from some ATM.
3. If this role continued for a longer time I would have to file my tax return from abroad.

The problem is that above seems a bit long-winded.

What I was curious on was whether anyone has done something like this and has any experiences to share.

[Allibert]

A lot of IT consultants work for certain periods aabroad.

It's definitely possible to set up your own company here. You probably won't be liable for VAT (I think the lower limit is SGD 500,000). Actually, setting up your own business may be the only possibility since in many countries companies have to pay to a registered company account abroad and not to a private account (or so I've been told at least), so you may need to set up a business account in addition to your private account.

Filing your tax online shouldn't be a problem wherever you are.

There may be other people here with other advice but I set up my own business here. If you plan to be an employee of our own business you will have to go through the normal process of submitting a business plan, etc., well at least I had to when I did it.

Hope this helps,
Alan

[sundaymorningstaple]

This is still true. And, unfortunately, it's not as easy as when allibert did it. Now you need to have more employees and demonstrable expenses of certain amounts/year (not including salary) AND you need to hire a certain number of employees.

Changes to EntrePass Framework

Look and digest that before you even think about the overseas work part of it. Additionally, you need to have turnover of 1 million/year before you need to register for GST (VAT).

Do a search of EntrePass on this site and also see the sticky for the same at the top of this forum.

sms

[carteki]

Hi,
Why not consider registering a company in an off-shore jurisdiction? This way you will probably not pay tax on the earnings in the co - and only on the salary you receive which is based on where you are resident.
Using a company to consult through is a very UK (possibly also European) thing, where the company tax rates were far lower than the personal one's (and the rest of the income is received as a dividend).
There are a couple of potholes and it is seriously worth spending the money on getting professional advice as to where to set it up and how to work it.
Kim

[StockAnswer]

Thanks for your replies

Yes the taxation in Hungary is the reason why they offered me this alternative (income tax can be like 40-50% of the income otherwise).

Registering a company in an off-shore jurisdiction sounds interesting but in this case I could end up staying in Hungary for most of a year and if I leave Singapore I would lose my EP. Which means that I would pay Hungarian income tax for my salary, I guess.

Perhaps if I first apply for PR and then open a company

[Strong Eagle]

As a general rule, if you are going to work in a country for other than a temporary assignment, the law requires you to get a work permit and then to pay income tax and whatever else kind of taxes they might want.

For example, here in Singapore, it is quite easy to put someone to work in Malaysia for quite a while by providing a Serviced Apartment and making all salary payments in Singapore. Because Malaysia doesn't really check very closely about how long someone has been in country, you can work there months or years without worry.

Thailand is different. They count the number of days and they will toss you out of the country and/or force you to get a work permit, and pay Thai income tax.

What you are suggesting is that you are going to fly under the radar in Hungary. You are going to work there but not take any salary there, nor pay any taxes there, and I will bet you that is not legal, strictly speaking. The question is: how long and do they have any real mechanism in place to see that you are living and working there. What does it take to rent an apartment.

For Singapore you would need to file for an Entrepass, and the Singapore government has made the requirements a lot more ugly. Maybe you can ask MOM to become a director of a company since you would be doing all your work offshore.

[StockAnswer]

Hi Strong Eagle,

in my case I would have in-principle work permit in Hungary as I am a EU citizen.

On another hand in practice it looks like it could become like what you are saying

Although I must say that if someone did want to hire a person from another country (like consultants are hired from India for assignments abroad)...I don't see why that would not be possible. Or perhaps those assignments are never *that* long term (they go back home every so often or something).

It is possible that the Hungarian company also saw the implications because they have now cancelled the work-under-my-own-company option and just want to hire me as a salaried person. Probably better as this seems to be a bit too complex for me at the moment anyway...

[ProvenPracticalFlexible]

Although I must say that if someone did want to hire a person from another country (like consultants are hired from India for assignments abroad)...I don't see why that would not be possible. Or perhaps those assignments are never *that* long term (they go back home every so often or something).

It's not impossible, but hiring Indian consultants to work in EU is a bit troublesome, because they need a visa just to enter not only to work. In my earlier job in Belgium used to deal with this, and sometimes it caused a lot of delays to get things started, as the visa processing times were somewhat random from a few weeks to 6 months.

You as an EU citizen could get around of this, as they don't stamp your passport (Hungary is in Schengen I assume) so there's no follow up really how long you stay there. But in principle if you work there full time on site and are a resident you should pay your taxes there.

[StockAnswer]

Hi ProvenPracticalFlexible

yes that's correct about Hungary being in Schengen.

Like your "Wagner" avatar by the way

Cool to see a Finnish 'icon' here