Director UK Ltd Company Contracting in Singapore - Issues

[Leo23]

Hello. I have searched through many forums and subjects on this site but have yet to find an answer that covers my specific question. Hoping somebody can advise. As I do not actually have an offer yet, this may be getting a bit ahead of things but wanted to be able to anticipate and navigate effectively if one does eventually come through.

BACKGROUND
• I am the Director of a UK limited company (my own) that is in the process of interviewing for a contract to provide consultancy services to a financial institution in Singapore

• This arrangement has been coordinated via a headhunter based in Singapore who contacted me in the UK to initially inquire about my interest and availability

My focus is that I want to be prepared to be in a position to effectively evaluate the tax implications and negotiate where necessary. Below are the considerations that are to be involved:

CONSIDERATIONS
• The agency is suggesting that the client would be paying for the services in USD – a bit odd as it is an AP-centric organisation – either on a monthly basis or daily rate equivalent; not sure which yet

• The agency suggested the client would likely provide one-month accommodation but then I would need to secure my own place at my own expense

• Relocation expenses would be covered (airfare and shipping) by the client

• Contract would likely be for 6 – 12 months

• For ease of calculations, assume daily/monthly rate of SGD $1,000/$20,000

Work Permit/Visa – Would this arrangement require a specific permit/visa to enter Singapore on business to perform services? If so, which one (e.g., P1)? I would not be “employed”

[Strong Eagle]

[quote="Leo23"]Hello. I have searched through many forums and subjects on this site but have yet to find an answer that covers my specific question. Hoping somebody can advise. As I do not actually have an offer yet, this may be getting a bit ahead of things but wanted to be able to anticipate and navigate effectively if one does eventually come through.

BACKGROUND
• I am the Director of a UK limited company (my own) that is in the process of interviewing for a contract to provide consultancy services to a financial institution in Singapore

• This arrangement has been coordinated via a headhunter based in Singapore who contacted me in the UK to initially inquire about my interest and availability

My focus is that I want to be prepared to be in a position to effectively evaluate the tax implications and negotiate where necessary. Below are the considerations that are to be involved:

CONSIDERATIONS
• The agency is suggesting that the client would be paying for the services in USD – a bit odd as it is an AP-centric organisation – either on a monthly basis or daily rate equivalent; not sure which yet

• The agency suggested the client would likely provide one-month accommodation but then I would need to secure my own place at my own expense

• Relocation expenses would be covered (airfare and shipping) by the client

• Contract would likely be for 6 – 12 months

• For ease of calculations, assume daily/monthly rate of SGD $1,000/$20,000

Work Permit/Visa – Would this arrangement require a specific permit/visa to enter Singapore on business to perform services? If so, which one (e.g., P1)? I would not be “employed”

[Leo23]

Thank you very much for the thorough reply!

Great to know about the corporate tax profit exclusions for first three years. Do you know if you are required to first pay and then get reimbursed when you leave SG if it is less than 3 years or does the govt allow completion of tax forms with zero due first three years and then begin collecting if there for longer time?

Had a scan at the MOM website link and seems like trying to establish a local entity would entail too much time, effort, and investment with added uncertainty of being approved or not from ACRA after receiving the AIP. Would be doable but time factor and uncertainty of approval would be biggest concerns.

As you suggest, the agent has already mentioned obtaining the EP from them or the client would not be that big of an issue. Guess it is more of a question on how it is perceived from the UK authorities if it is for me personally or my limited company. Reached out to a local attorney since this post and awaiting feedback.

Surprised to hear about dividends. Am dual US/UK citizen and in UK am taxed less on that income than if regular salary income. Just found out about potential issue with IRS about this situation and am a bit dismayed.

Guess I will wait to see what the local attorney/tax specialist has to offer and add to this.

Thanks again for taking the time to share that information! Very helpful.

[Strong Eagle]

For corporate tax, there is a S$100,000 profit deduction so you simply pay no tax.

I, too, am US/UK citizen but have never resided in UK. But, I can guarantee you that you don't want dividends because they will be taxed as unearned income, not subject to the earned income exclusion, and at a rate as though earned income had not been excluded.