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Entrepass - Confused...

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StamfordBridge
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Entrepass - Confused...

Postby StamfordBridge » Mon, 10 May 2010 8:28 pm

Hi, I would appreciate an opinion.

I got an EntrePass in 2008 to operate an import export company, and had the Entrepass renewed in 2009 for another year.

Early 2009, I incorporated a second company which provides IT services mainly in the fields of E-Commerce, Content Management, Database Management, etc. This was in line with my educational and professional background. I formed that company after the global economic crisis which resulted in my capital running low and the import export business not generating enough profit.

So for the rest of 2009, I placed more focus on new IT business and the results were very good. I signed up a number of clients (about 30 to date), and the business has been generating a decent and regular income. I am now employing 2 local staff.

This year, I applied to renew my Entrepass under my original import export company which appears to be close to making a loss, but have also included an accounting report and description of the highly successful IT company.

After the documents were received, the officer from SPRING requested a new business plan for the IT company and that got me excited as I had a lot to brag about. However, today the officer emailed me and said there was no need for the business plan as she had noticed that the company had been in operation for longer than 6 months and that would not qualify it for an Entrepass application, so they are now assessing my application based on the records of the import/export company.

What I most disappointed about is that I could simply and easily be rejected as the original company has very poor figures, and on the other hand, I have this greatly performing IT company with a good client base and a decent turnover that seems unable to have any influence on the MOM.

I had intended to close down my import export company and put all my efforts into the other business. But now it seems like I have no choice but to keep operating an almost dead company just for the sake of getting my application regularly renewed.

I just wonder what the advisable action here is. Should I strike off this my IT business and then incorporate another one with a new name and then apply for an Entrepass ? Or are there any recommended immigration lawyers who can perhaps push the MOM for an exceptional allowance ?

It seems rather pathetic to have to pack and head back when I have an excellent business here simply because it cannot be considered for Entrepass under the MOM rules.

Any thoughts would be greatly appreciated.

Thanks.

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Strong Eagle
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Postby Strong Eagle » Mon, 10 May 2010 9:05 pm

There are a number of missing facts here. First, how did you incorporate your second company? IANAL, and, as an EP holder (which is what the Entrepass is) you don't have the right to form a company or be a director. So, in the vernacular of Singapore, "so how"?

Second, I think you ferked up in at least two ways.

a) You should have updated ACRA with new business lines coding so that your alternate business looks like it is something you do.

b) You should have created your second company as a wholly owned (stock wise) private limited, owned by your first company. That way, income would have accrued to you first company by virtue of stock ownership and combined P&L and balance sheets.

I think you are going to have to climb several levels within MOM to get the renewal you need. First, if you created a company on an EP, it is successful, and nobody called you on it, then your first request is to get an EP through your second company and screw the Entrepass.

The second thing is to do some hoop jumping. Either form a holding company that absorbs the assets of both companies, with you as controlling shareholder of the holding company, or execute the documents necessary for your original company to own your successful second company. This way, you force MOM, Spring, and whomever else to review your activities as a whole.

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Postby StamfordBridge » Mon, 10 May 2010 10:04 pm

Thanks for your reply, Strong Eagle.

I registered my second PTE LTD company with ACRA in January 2009 and applied for renewal under my first company a couple of months later. At that time, I included a letter with my application stating that I had formed a second company with a comprehensive description. They renewed my pass without any mention of that second business, so I assumed they were OK with it.

I was actually aware that an EP holder should not operate a different business, but I was also told by a professional who deals with immigration matters that what really mattered to the MOM was me operating my orginal business primarily, in which case other businesses would just be looked at as add-ons.

The second company is a wholly owned private limited by me, though, and not by the first company. I made the MOM aware almost right away and they said nothing, and renewed my pass, so perhaps all I can do for now is to cross my fingers and hope that appeals in this country have a good success rate too...

Thanks

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Postby gravida » Tue, 11 May 2010 12:28 pm

I think you have put yourself into trouble, frankly speaking. First of all, basing your decisions on a word of 'professional' (whoever it is and no matter how experienced, it is not an officer giving you a formal info). Second of all, operating a second business which you are actually not allowed to have under the entrepass, as it gives you the right to operate the business you have initially applied the pass for, not any company, even if ACRA will accept the application.

Singapore is efficient when it comes to immigration and rules matters, so if I were in your shoes I will already start knocking into doors of some higher level officers, trying to explain yourself and clarify the matter before they will come to you. Thankfully, they are also reasonable here, so if you make the mistake, they don't shoot immediately. Yet, I have never done anything wrong with the permission to stay or operate the business, so have no experience how they react to such violations...

Good luck anyway, I hope you will find a solution.

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Postby ksl » Tue, 11 May 2010 12:48 pm

If i was you, i would get focus on the primary business, find someone to distribute your products to boost the revenue, hand over the second business so that you can focus on what you should be doing.

You can PM your product list and I will see if i am interested in the distribution, we may have the sales channels. If not find someone that has.

You must prove your worth by rectifying your errors and showing you can manage, the bureaucracy will not change its criteria for you.

You are the entrepreneur so prove it, by resolving the issue handing over the second company to a local and take SE advice, b) You should have created your second company as a wholly owned (stock wise) private limited, owned by your first company. That way, income would have accrued to you first company by virtue of stock ownership and combined P&L and balance sheets.

Handing over the distribution of your imports to a distribution Company with sales channels, will help you, to boost your volume and turnover.

You can PM me your product list, and i can see if there is anything we can distribute, though we are in food & beverage business.

The entrepass is also entrepreneur based, you will now have to sell your ability to gahmen, it looks like they are giving you a chance, by not shutting down the second company, because you have employees. But you must hand over the control and get focused on your primary business...that is the one that counts for your entrepas.

SE advice is sound and the best way, though you will need a professional to help you do it hand the reigns of the second company over and keep an eye on it while focusing on your major concern.

That will also show the gahmen you have what it takes to be an entrepreneur. They will not punish you, but they will make you abide by the bureaucratic rules. You have employees and have shown you may have what Singapore is looking for, you have to prove you can do it before your renewal. I think entrepass is only being renewed at 1 year intervals for those that are ticking over.

They want growth and production progress in the primary Company!

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Postby Strong Eagle » Tue, 11 May 2010 11:16 pm

StamfordBridge wrote:Thanks for your reply, Strong Eagle.

I registered my second PTE LTD company with ACRA in January 2009 and applied for renewal under my first company a couple of months later. At that time, I included a letter with my application stating that I had formed a second company with a comprehensive description. They renewed my pass without any mention of that second business, so I assumed they were OK with it.

I was actually aware that an EP holder should not operate a different business, but I was also told by a professional who deals with immigration matters that what really mattered to the MOM was me operating my orginal business primarily, in which case other businesses would just be looked at as add-ons.

The second company is a wholly owned private limited by me, though, and not by the first company. I made the MOM aware almost right away and they said nothing, and renewed my pass, so perhaps all I can do for now is to cross my fingers and hope that appeals in this country have a good success rate too...

Thanks


Since you already have the process initiated, I'd see how it plays out before doing anything else. If an appeal is required, I'd look at how I could combine the two companies (through stock ownership or a buyout so that you could return with a combined P&L and balance sheet.

Since you already have had conversations about your second company and nobody raised a stink, I don't think you'll suffer fallout, and if you do, can always appeal on the grounds that you were not informed, in spite of being frank, about any issues.

I'd bet even money that you'll be approved, and if you have to appeal, will be approved after cleaning up (or at least announcing a plan to clean up) your companies.

For example, create a holding company for the purpose of holding your other two companies. They remain separate entities for purposes of sale, etc. but you own the stock in the holding company.

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Postby StamfordBridge » Sun, 23 May 2010 8:24 pm

Thanks for all your replies and valuable input.

I had little choice but to carry on to the end of the process and hope for the best.

Although they told me that they could not consider a business plan for the second company, I submitted a plan to them together with a supporting letter, documents and sales records showing that it was a viable business and urging them to reconsider.

End of last week, I heard back from them and the Entrepass renewal had been approved for another year, but based on the original company with no mention whatsoever of the second company.

It was clear that they had just decided to close one eye to me 'breaking the rules' since I had already informed them twice and the second business was genuinely active while the original company did almost zero.

Although I am very relieved, I am now more confused as what to do next year. In theory, if they renewed me twice so far after I set up a second business, there is no reason why they should not continue doing that especially if that business does better and better over time.

On the other hand, basing the Entrepass still entirely on the original business will give them a good reason to say NO at the next renewal.

I am not really keen on handing over the second company to a local as KSL suggested and it seems like setting up a holding company to take charge of both may be the right thing to do.

Thanks to you all once again.


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