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Agencies selling Incorporation packages - EP v Entrepass

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SingapawSam
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Agencies selling Incorporation packages - EP v Entrepass

Postby SingapawSam » Tue, 26 Jan 2010 8:26 am

Hi there first post here.

I spent a few hours reading through the threads here yesterday on opening a new business in Singapore. Generally speaking the recommendation seems to be that the entrepass is the way to go.

I am interested in setting up an "IT consultancy" type firm and doing freelance work. I have been working in Singapore for 4 years, and I am about to finish up with my employer. I converted across to a PEP last year. I am kind of kicking myself that I didn't go straight to PR which would have given me more flexibility to do freelance or set-up my own company. I decided against the PR at the time due as I did not completely understand the requirements for National Service as they related to my 5 year old son.

It seems that the entrepass is a fairly heavyweight vehicle to get your new company started, particularly if one is only looking to do consultancy/freelancing (particularly now with the new entrepass requirements). It has got me thinking though about what kind of business I really want to start and whether I could conceivably see myself hiring staff later down the line etc.

I do have a question though:

There seems to be agencies that offer incorporation packages whereby they set-up the company, provide local director etc. and this company hires you as an EP. They go so far as to recommend this as the preferred incorporation route if you have professional skills/experience (which I do) versus the Entrepass which they recommend for those who may not have the requsite background. I have supplied a link to the site that offers these packages (hope this is OK).

I'd be most grateful if anyone has any words of wisdom on the 'Incorporation + EP' package as it seems to meet my requirements? I am sure there is a catch though otherwise I am sure this option would be recommended more frequently on this forum over the entrepass...

http://www.guidemesingapore.com/busines ... ckages.htm

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Postby SingapawSam » Tue, 26 Jan 2010 10:48 am

I spoke to an incorporation agency just now and they suggested that the solution was straightforward : set-up a partnership with my wife (who is Australian and on a dependants pass) and as long as she is the majority stakeholder, it is fine for me to be a director of that company and be employed by it whilst on my PEP pass. I need to check if this applies to LLPs or just plain partnerships.

Seems straightforward enough to me?!

Similar-ish thread here ftopic50819.html

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Postby jpatokal » Tue, 26 Jan 2010 10:48 am

The catch with the incorporation+EP route is that nobody really knows what the requirements are, there's only a scattershot of contradictory anecdotes. (Search the forum: you'll find a couple of threads where all us greybeards are telling somebody that they don't have a snowball's chance in hell, yet they get the EP anyway, and a couple of threads where the opposite happens.) And the real pain is that you'll only find out if you're eligible for the EP or not after you've spent all that money and time to set up your company.

With the EntrePass, on the other hand, the requirements are well known, you'll get the visa if you can put together a business plan that convincingly meet them, and the approval for visa and company is given in one go.
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Postby jpatokal » Tue, 26 Jan 2010 10:53 am

SingapawSam wrote:I spoke to an incorporation agency just now and they suggested that the solution was straightforward : set-up a partnership with my wife (who is Australian and on a dependants pass) and as long as she is the majority stakeholder, it is fine for me to be a director of that company and be employed by it whilst on my PEP pass. I need to check if this applies to LLPs or just plain partnerships.

Ah, the old Dependents' Pass dodge -- it's a real mystery how long it takes until MOM closes down this loophole, but for time being you're still in the clear!

At any rate, you do not want a plain partnership, since it's not a legal entity and it would make you and your wife personally liable for all the company's debts. Based on the link below, though, an LLP is also an option, as long as your wife is accepted as the "local manager" (and a DP is explicitly listed as qualifying).

http://www.business.gov.sg/EN/StartingU ... pe_llp.htm
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Postby SingapawSam » Tue, 26 Jan 2010 12:03 pm

Thanks for the reply. Makes sense. Good too know the DEP route is worth following up on.

I get your point regarding the issuance of an EP and not knowing if this is guaranteed. I think that the situation is different though in my case as I am on a PEP? As I am fine to work for my company (the one I plan to incorporate) under the PEP scheme, this means all I need to do is keep within the eligibility guidelines until my PEP expires in 5 years time (2.5k salary each month) and my PEP will stay active. This will be easier than having my company issue me with an EP, as this will attract some scrutiny, as you have suggested.

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Postby ksl » Tue, 26 Jan 2010 12:50 pm

My concern would be that, your wife's dependant pass is tied to your EP, so when your EP runs out, then what? Even if the business has started what would happen?

Though i do believe you do not have to pay the 50K because that is only for the entre pass. There are however altenatives which may be open.

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Postby SingapawSam » Tue, 26 Jan 2010 12:57 pm

ksl wrote:My concern would be that, your wife's dependant pass is tied to your EP, so when your EP runs out, then what? Even if the business has started what would happen?

Though i do believe you do not have to pay the 50K because that is only for the entre pass. There are however altenatives which may be open.


Well my PEP is good for another five years. My circumstances will probably change considerably in that time. I can always apply for PR later down the line.

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Postby aster » Wed, 27 Jan 2010 8:47 am

jpatokal wrote:The catch with the incorporation+EP route is that nobody really knows what the requirements are


I went down that route and had no problems getting an EP and 2 DPs. I applied about 8-9 mths after I opened up the company (I was a non-resident director from the very outset), by which time it was already making money as all of my business comes from abroad anyway.

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Postby SingapawSam » Mon, 08 Feb 2010 11:41 am

Just by way of a follow-up on this, I today incorporated my company with ACRA. All went through very smothly. My wife (on DEP pass) is the substantial shareholder, with me as a Director (on PEP pass).

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Postby JackDaniels » Fri, 14 Jan 2011 2:42 pm

SingapawSam wrote:Just by way of a follow-up on this, I today incorporated my company with ACRA. All went through very smothly. My wife (on DEP pass) is the substantial shareholder, with me as a Director (on PEP pass).


Hi,

Could you update us on how your situation panned out?


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