Singapore Expats Forum

Form a new company and get an Employment Pass - difficult?

Discuss your views about Singapore business & economy, current policies & issues, starting a business in Singapore.
reliable1
Newbie
Newbie
Posts: 14
Joined: Sun, 09 Apr 2006

Form a new company and get an Employment Pass - difficult?

Postby reliable1 » Sat, 22 May 2010 1:45 am

Hi everyone,

I know this is a hot topic - incorporate a Pte Ltd and have it sponsor your Employment Pass. I have been planning on doing this since 2006 AND finally got around to doing it. Well, I have started the company incorporation process - which should be completed in 2 days. Will apply for EP after that.

My question - has it become difficult to procure an EP through this route? Lot of articles around the web has been worrying me :(

My qualifications meet the requirements (I think) ... MBA and another Masters degree. Running a consulting business for 6 years, good revenues and profits. Now I am planning to move the biz to Singapore.

I am incorporating the new Singapore company with paid up capital of $30,000 and the salary I will draw as director will be $7000+

Anyone tried this route recently? What was the outcome? All the experts/moderators out there... what's your understanding of my situation?

Will appreciate any inputs,

Thanks,

Rajiv

User avatar
Strong Eagle
Moderator
Moderator
Posts: 10405
Joined: Sat, 10 Jul 2004
Location: Off The Red Dot
Contact:

Postby Strong Eagle » Sat, 22 May 2010 8:01 am

Have you read any of the 100's of articles posted in this forum and in Careers? You are trying to do an end around the Entrepass regulations. Waste of time, I'd say.

User avatar
aster
Manager
Manager
Posts: 1593
Joined: Fri, 15 Jan 2010

Postby aster » Sat, 22 May 2010 10:42 am

My tip would be to run the company for at least a year as a non-resident director, show decent profit, and then make the decision on whether to move here.

A new start-up that instantly applies for an EP is just circumventing the Entrepass conditions.

User avatar
sundaymorningstaple
Moderator
Moderator
Posts: 34258
Joined: Thu, 11 Nov 2004
Location: Still Fishing!
Contact:

Postby sundaymorningstaple » Sat, 22 May 2010 12:10 pm

I also believe you are around 20K short of paid up capital as well. And without a track record, It's doubtful that MOM will give you an EP based on a "hunch". As Aster said, they are going to be looking for a track record first of all. Secondly, they are going to look at the prospects of the company hiring local staff. If it doesn't look like that is a viable future, they will probably nix it.

reliable1
Newbie
Newbie
Posts: 14
Joined: Sun, 09 Apr 2006

Postby reliable1 » Sat, 22 May 2010 1:30 pm

Hi everyone,

Thanks for the responses so far... looks like the verdict is that I might be wasting my time :(

Well, I have already paid for the entire service (incorporation + EP) to a local company in Singapore... so we will see how it goes. I will keep the forum updated.

Why did I go for it? I guess I got taken in by what websites of MOST of these companies say. Everyone said "if you have good educational qualifications and experience, you form the company and apply EP. If not, but you have good entrepreneurial skills, then go the EntrePass route"

Now, this was with almost every incorporation consultant I spoke to. So I thought - maybe after the new Entrepass rules, MOM has advised these guys to go the EP route for people with good qualifications.

So, question - if my EP gets rejected now BUT I continue to run the new company and show decent profits for 6 months - can I apply for EP again?

Cheers,

Rajiv

User avatar
sundaymorningstaple
Moderator
Moderator
Posts: 34258
Joined: Thu, 11 Nov 2004
Location: Still Fishing!
Contact:

Postby sundaymorningstaple » Sat, 22 May 2010 2:08 pm

This is why they are cracking down on this crap. You are a good example. Think about what you are saying and what you would need to "prove" anything to MOM. In 6 months, how do you propose to "prove" your company is making money? It will take a minimum of 12 and more like 16 months before you could present a set of published, audited accounts. Without those, everything you say is only lipservice and counts for absolutely nothing. Telling them you have a bid out for a 3.5 million dollar contract isn't any good as you haven't won the contract nor seen the first payment. Without published audited accounts, I'm afraid you've got nothing.

Frankly, I also have my doubts that you are able to run a company successfully. Look at what you wrote here. You put your trust in a sales pitch that all incorporation consultants used. If they told you the truth, you wouldn't have given them the money would you? And you have to remember, they are in business as well, so if they can give you a line of BS that you will believe, in order to get you to sign on the dotted line, they don't give a damn whether you fail or not. They've got they money and you've got the headache. They are better businessmen than you are. Kinda like a bank with financial investment packages.

stiwi
Chatter
Chatter
Posts: 153
Joined: Tue, 01 Sep 2009
Location: Singapore

Postby stiwi » Sat, 22 May 2010 4:17 pm

@reliable1, don't give up. Actually, MOM has no particular reason to reject your application if you meet all the criteria and provide all documents required. I am a good example of it, as I have done company incorporation recently + EP and DP completely from scratch. So exactly the same package like the one you are into.

My paid up capital was low, I actually followed the advice from the company which did all the paperwork and set it on 5.000 EUR. It doesn't really matter if it is 5.000 EUR or 50.000 EUR as no one actually ask you to show a proof that such money has been injected to the company bank account. They can ask you for a proof of payment if you are increasing the paid up capital later on, but not when you are incorporating the company.

Arm yourself with a patience though as it can take time. After 3 or 4 weeks after completion of my application, I received a notification that my EP application was rejected. The reason was that MOM has asked for more details and this were:
- Educational certificates (despite more than $7k salary)
- Tenancy agreement (since my company is registered under the address of the company which did all the paperwork for me, I asked them to provide MOM with a relevant document).
- Employment contract (it was something I didn't expect that will have to provide, especially that I was hiring myself for my own company. But it was not a problem at all, Google can be your friend here)
- Client contract (surprisingly they wanted to see a contract between my newly incorporated company and my client. But this also shouldn't be a problem to figure out).

At this point, when the EP is rejected some could give up. Especially that MOM asks for a specific details, such as client contracts. I didn't take this rejection personally to be honest, knowing they asked for some more documents. I provided them with all details and 3 weeks later had EP approval letter in hand.

I think that MOM wants to make sure that is dealing with a professionals. I must note though that my EP is Q1 despite having more than $7k salary and is valid for 1 year. Normally based on the criteria and to what I heard, I should be given P1 and 2 years. But I completely understand MOM on this. They gave an unknown person a credit of confidence and they want to make sure that such person will not be struggling here.

So if your EP is rejected, you can re-apply as many times as you want I assume. The company which is doing this on your behalf shouldn't charge you for this since you already paid.

reliable1
Newbie
Newbie
Posts: 14
Joined: Sun, 09 Apr 2006

Postby reliable1 » Sat, 22 May 2010 11:33 pm

Hi stiwi,

Thanks for sharing your experience... appreciate it! This is a great insight into the process.

Which company did you use in Singapore to apply? And, is the EP renewable after 1 year?

Rajiv

stiwi
Chatter
Chatter
Posts: 153
Joined: Tue, 01 Sep 2009
Location: Singapore

Postby stiwi » Sun, 23 May 2010 1:13 am

Hi Rajiv,

I used .. I am not sure how does it work for EP renewal as I didn't have a chance to pass through this process yet. But I believe it should be easier to renew than it is to apply initially.

User avatar
Strong Eagle
Moderator
Moderator
Posts: 10405
Joined: Sat, 10 Jul 2004
Location: Off The Red Dot
Contact:

Postby Strong Eagle » Sun, 23 May 2010 8:29 am

stiwi, the one big question is WHEN did you do this?

stiwi
Chatter
Chatter
Posts: 153
Joined: Tue, 01 Sep 2009
Location: Singapore

Postby stiwi » Sun, 23 May 2010 2:28 pm

Strong Eagle wrote:stiwi, the one big question is WHEN did you do this?


Applied for EP in December 2009, got rejection at the beginning of January this year and 1 month later, upon providing documents requested, received EP approval.

reliable1
Newbie
Newbie
Posts: 14
Joined: Sun, 09 Apr 2006

Postby reliable1 » Sun, 23 May 2010 3:36 pm

Hmm... so its after the new EntrePass rules. My guess is that MOM is officially giving out EPs to Directors of new companies. However, they want us to prove the genuineness of the whole setup by producing client contracts, etc... which makes complete sense!

And, if this is the case... then agencies like ., Janus etc who're recommending that people with good qualifications and background go for EP rather than EntrePass are absolutely right. I was beginning to doubt that, but looks like there's light at the end of the tunnel :)

Best

Rajiv

User avatar
Strong Eagle
Moderator
Moderator
Posts: 10405
Joined: Sat, 10 Jul 2004
Location: Off The Red Dot
Contact:

Postby Strong Eagle » Sun, 23 May 2010 3:55 pm

reliable1 wrote:Hmm... so its after the new EntrePass rules. My guess is that MOM is officially giving out EPs to Directors of new companies. However, they want us to prove the genuineness of the whole setup by producing client contracts, etc... which makes complete sense!

And, if this is the case... then agencies like ., Janus etc who're recommending that people with good qualifications and background go for EP rather than EntrePass are absolutely right. I was beginning to doubt that, but looks like there's light at the end of the tunnel :)

Best

Rajiv


They are in business to make money, and if you ask them, you'll discover you'll get no refund should you not be successful.

The fact of the matter is that the whole business of company formation has been seriously tightened up because of the essential scams coming down... people forming companies and applying for EP's for no other real reason than they want to live in Singapore.

I contacted MOM about the new regulations. I asked them if they intended to deny entry to sole professionals who would not hire people but had capital and could provide a lot of know how, and would pay taxes, people who just wanted to live somewhere and were already successful.

The answer was, it depends on the situation and we will look at each case individually.

So, I know people who are essentially transferring their business to Singapore. They have a going concern with contracts to prove it. They have experience. They demonstrate staying power.

So, you are saying that you have a business that generates good revenues and profits. At the very least, you'll probably be asked to demonstrate that with a couple of audited statements, and you'll need to show that your business transfers well... that is, if idea of 'transferring' your business here is to start the same kind of business here from scratch, then I think you'll have a lot harder time convincing them.

$30,000 isn't much capital for a company with six years of good revenues and profits. You'll need to prove that this covers your costs (company and you) to projected break even point, or else someone is going to ask how you intend to live until you break even.

So, I'm not positively saying that you won't get an EP, and I am saying that if you think you'll just be able to wander in with an idea, without business in hand, and without pro forma statements that make sense, I don't think Rivkin or anyone can help you.

I'll be interested in the outcome so please do post updates.

reliable1
Newbie
Newbie
Posts: 14
Joined: Sun, 09 Apr 2006

Postby reliable1 » Sun, 23 May 2010 4:52 pm

Hi StrongEagle,

What you're saying makes complete sense.. of course the Singapore Govt wants people who can contribute to the economy in some way or the other. And they want to approve/reject on a case by case basis.

About my business, its not something that requires a lot of capital or manpower. And yes, its an established business and I want to move it to Singapore because it will help me grow the business further.

Will keep the forum updated on how my application goes..

Rajiv

User avatar
ksl
Governor
Governor
Posts: 6005
Joined: Mon, 19 Jul 2004
Location: Singapore
Contact:

Postby ksl » Sun, 23 May 2010 9:54 pm

reliable1 wrote:Hi StrongEagle,

What you're saying makes complete sense.. of course the Singapore Govt wants people who can contribute to the economy in some way or the other. And they want to approve/reject on a case by case basis.

About my business, its not something that requires a lot of capital or manpower. And yes, its an established business and I want to move it to Singapore because it will help me grow the business further.

Will keep the forum updated on how my application goes..

Rajiv


I am incorporating the new Singapore company with paid up capital of $30,000


I think you will get it, simply because you can document the last 6 years of business, my other concern may imply the Singapore company dealing with it may well have the connections needed to see it through, still implying that Singapore is still one of the most transparent countries in the world and easiest for business. Case by Case is the key word, the rest is just a deterrent for the masses. They still have full control and will monitor any progress anyway.

What we are seeing is expats actually producing jobs now, to ensure their pass renewal, so it does have an effect on growth.


  • Similar Topics
    Replies
    Views
    Last post

Return to “Business in Singapore”

Who is online

Users browsing this forum: No registered users and 0 guests