Starting a company and getting an EP - advice please!

[Broadleaf]

I know this topic has probably been covered a thousand times, but everyone's circumstance are different. Here are mine:

I have been in Singapore for nearly 9 months, working on a P1 EP. My monthly salary is just over 25K. The company that employs me is, essentially, acting as my "sponsor" and facilitating my ability to work and reside here. My employer has a major contract with a client outside Singapore and my name is on that contract as the one who will carry out all the work. The fees from the contract are simply passed on to me on a monthly basis as my "salary".

This situation has a few problems and it is becoming less secure every day. I would like to find an alternative. My idea is to start up a limited company in partnership with a PR friend. We would both be Directors, but he would be a silent partner. I would like that company to apply for my EP.

I would be very grateful for any advice with respect to this and some sort of indication of whether this is or isn't the right approach. I would like to know of any other considerations, such as minimum paid-up capital, whether the company needs to have been established for a long time before an EP can be applied for etc.

Many thanks for your help.

[Mad Scientist]

Before you proceed you need to go to these website for more details

www.acra.gov.sg and www.iras.gov.sg

To set up a Pte Ltd, you can have a paid capital of $2.00 and max authorise capital of $100 K . However this paid up does not look credible enough for contracts or even getting you an EP as a director of the company
The norm is paid up of $100K and authorise of $500K to a million.Any company secretary can advise on how you can go about this.
IMHO this is encouraged very much as your destiny is in your hand. As long as you have enough contract that can pay to get a EP or even P1 pass and you can employ locals, the sky the limit on where this road can lead to like getting PR, renewal of EP. lower tax break. Your liabilities are limited to the company itself.
I have done this myself and encouraged you to go down this route. Though alot of paper works needs to be done like your MOU, Company Tax etc. All these can be advise by an accountant and a company secretary. Go for it and persevere !!

[Broadleaf]

Thanks for the advice and encouragement.

Paid-up capital is a bit of an issue. I can probably only do about $20k. This is why I am trying to find another way other than via the EntrePass route. Also, I am a consultant and am very unlikely to need to employ more than one person and, possibly, not even one.

I can demonstrate a contract worth c. $330k a year, however.

Reading through all the posts on this, it looks like a 50/50 chance of this working.

Any more advice please.....

[Mad Scientist]

You are an EP . please remember that. Unlike local or PR even $10 K is enough. Your EP will be tied to your company employing you

To make it work , I think, at minimum will be $50K as you need to proof how the company can pay your salary. It will be a hard sell.

$100K , I will bet you it will work. Maybe you need to get some soft loan for a start with a return of full amount in 3 year guaranteed condition

[Broadleaf]

OK, thanks for this. Surely a contract worth over 330k is enough to pay my salary...

I'd appreciate any other advice from anyone please.

Some body advised me that it might be better to buy an existing company and that way, the company has a track record.

Thanks again

[bluenose]

Broadleaf..
you can email me or PM me as I started a company and got an EP no problem and my details are similar but less than yours...
[email protected]

[ksl]

Actually if i'm not wrong, the 50k paid up capital applies only to the entrepreneur pass for foreigners living outside of Singapore.


It would not apply in the case of a PR setting up a business with a person already in Singapore, it just means that, your partner would have to sponsor your EP for the new company being setup....PR's do not have to apply for entrepass for foreigners only EP for the new company in which you would be a share holder...The contracts in hand would be sufficient for application.

[Mad Scientist]

Actually if i'm not wrong, the 50k paid up capital applies only to the entrepreneur pass for foreigners living outside of Singapore.


It would not apply in the case of a PR setting up a business with a person already in Singapore, it just means that, your partner would have to sponsor your EP for the new company being setup....PR's do not have to apply for entrepass for foreigners only EP for the new company in which you would be a share holder...The contracts in hand would be sufficient for application.

KSL; you are correct. I commented based on my close friend who did just what OP wanted to do. His application for EP to become one of the director to his newly formed company with a local was rejected. Their paid up was $75K. He was then "advised" by MOM to increase the Paid up to $100K and the first three employees he wanted to employ must be a local. He did just that and his EP was approved .

[Broadleaf]

Thanks for all of this.

I phoned . the other day on this subject and they said that $50k paid-up capital would be essential. They also said that, as a shareholder, it would be best if I had no more than 30% of the company when applying for the EP.

This is new information to me and just confuses me even more. I am completely baffled by this process now and have absolutely no idea which route to take - HELP!

[Mad Scientist]

Thanks for all of this.

I phoned . the other day on this subject and they said that $50k paid-up capital would be essential. They also said that, as a shareholder, it would be best if I had no more than 30% of the company when applying for the EP.

This is new information to me and just confuses me even more. I am completely baffled by this process now and have absolutely no idea which route to take - HELP!

Broadleaf; . like Janus are all consultant companies. Your pay a fee to to get it done. There are many others that can provide these service. HAve you gone to www.acra.gov.sg

Below is from IRAS
You are one of the owners/directors of a Singapore company and need to relocate to Singapore to run your company operations. Note however that if the company is a newly setup company and you hold more than 30% of the shares, you can also apply for Entrepreneur Pass.

You can even own your company if you are operating outside SG. You need a local person to become as one of the director which you already have.

So which one do you want to follow.?

[Strong Eagle]

I've posted this in your other thread... please don't start up multiple threads on the same topic.

The new regulations have made it very difficult for self employed professionals such as forex traders and/or project managers and other skilled professionals to start their own businesses, employing just themselves.

OTOH, when I enquired to MOM a year or so back about this issue, they told me that every case is reviewed on its own merits. To me, this statement translates as follows:

If you already have a successful business and a solid track record in your profession, and you have made good income from it (like at least a P1 salary), and your desire is to move to Singapore and continue in that business, I think you will be allowed to form a private limited, then apply for an EP for yourself, thereby eliminating the need for an Entrepass.

If, however, you are starting a new business, have no track record, or are not starting a 'professional' business like a consultancy, then you will not be able to form a pte ltd and get an EP... they will force you to meet the requirements for an Entrepass.

Otherwise, this country would be swamped with would be aspiring entrepreneurs coming in with no money, and setting up business that could be set up by locals.

Thus, if you have a $300K contract, and a PR as a co director, my guess... and it is exactly that... a guess... is that you will get your EP. On the EP application it will be necessary to demonstrate the contract and its viability.

[Broadleaf]

Thanks, Strong Eagle. By the way, the threads were different, as one was about getting an EP and one was about going down the PEP route.

Anyway, I have a track record of running a business in my home country and I have a contract worth $300k+. It is a professional consultancy and, basically, a "low risk" operation, where my main client would like me to be based in Singapore in order to best service the contract.

Thanks for the help. I will let you know what happens.

[Strong Eagle]

Thanks, Strong Eagle. By the way, the threads were different, as one was about getting an EP and one was about going down the PEP route.

Anyway, I have a track record of running a business in my home country and I have a contract worth $300k+. It is a professional consultancy and, basically, a "low risk" operation, where my main client would like me to be based in Singapore in order to best service the contract.

Thanks for the help. I will let you know what happens.

I am aware of others that have successfully gone this route.

[Singapore Saint]

Hi Broadleaf,

Not sure if this will help or just confuse you more, but I set up my own company in August 2009; I'm an Expat, have been here for over 6yrs now, had previously been on a P1 for 2yrs, then a few months on a Dependant's Pass while I got my plans together.

I have a PR as another Director, I own 52% of the Shares, with the remaining 48% split equally between the PR Director and a UK Resident.

I set up with a Paid Up Capital of only $50, stated my salary as $3500, which was the lowest I could to get any form of EP, knowing that I would be able to supplement my income through bonuses, dividends etc if the business went well.

I also used ..

The whole process was very straightforward, there were no hitches, no endless questions from MOM, the forms were submitted and all came back approved straight away.

[Bayareaguy]

I am thinking about going this route and would be great to hear some more advice from those who have successfully set up their consulting practice. Specifically:

- Did you go through one of the advisory companies that help set up businesses in Singapore or did you register the company and fill out the paperwork yourself?

- What were the considerations in having a setting up how much you own as a shareholder? Was this simply a capital raising decision?

- Did you have to show an existing consulting contract? I am currently employed with a multi-national so do not have any contracts/engagements in hand

- When you received your EP, how long was the EP granted for?

Thanks everyone in advance!