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Question About Entrepass Changes

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Question About Entrepass Changes

Postby Strong Eagle » Thu, 28 Apr 2011 4:54 pm

I received this question in email, and answer it here because it has common applicability.

Hello -

I just read your input on the Singapore expat forum on Entrepass and starting up a business in Singapore. Whilst the input is about 4 years old, I think most of the information is still rather valid. So, thank you.

The reason I am contacting you, which I hope is ok, is that I was wondering why there was no mention of the $50k paid-in capital? Is that a new criteria that was introduced way after 2007? How much would you say I would need all in all, ie $50k paid-in-capital, accountant fee + the Singapore firm that would produce a stand in director? I have limited funding and would like to know if this is a dream that I just have to put aside for now or if it's an amount that I can somehow scrape together in a few months' time.


You are welcome. :)

There was no mention of $50K paid up capital because this rule came into effect in September 2009. At the same time, additional rules came into effect regarding your total turnover (sales), plus number of Singaporeans employed. The new rules seem focused on manufacturing, retailing, and such, where the expectation is you buy some capital equipment, hire some people to produce something, and then grow the business. I assume you have read them on the MOM website.

If you are talking about setting up a professional business such as a consultancy, forex trader, project manager or some such, then the Entrepass is not the way to go, because you won't have the need to hire Singaporeans, except for specific tasks. In this case, I know a number of people that have formed a company with a nominee director, then applied for an EP with that company. Those that have been granted an EP this way generally have sought after professional skills, a track record in what they are starting up, and possibly potential or real contracts that makes the business an instant business generator. For example, if you are wanting to move an existing business to Singapore, you may be looked upon favorably.

For an Entrepass you would not have a stand in (nominee) director as you can be the director when your Entrepass is approved. If you go the other route, expect to pay about $1500 per year for a nominee director. Once you receive your EP, you can be a director yourself, and eliminate the nominee director, so this is one year's cost.

It costs around $350 to set up a private limited with ACRA. Expect a CPA firm to charge around $1000 to $1500 to get everything set up... with ACRA, charter, incorporating documents, meeting minutes, etc.

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Postby Strong Eagle » Thu, 05 May 2011 8:38 am

Additional Entrepass Information

There is no 30 day stipulation about registering a company. But, I would waste no time once you get the Approval In-Principle letter because you have lots to do. When you do, you must:

a) Use the letter to start up your private limited at ACRA (no sole proprietorship), unless you have started a pte ltd in another way that is less than 6 months old.

b) Prepare directors resolutions for the issuance of stock at some value. For example, if you set a par value of $1 you will need to issue 50,000 shares of stock. You, as the applicant must hold 30 percent or more of those shares or 15,000 shares.

c) Collect $50,000 in paid up capital from the shareholders for their shares. You would need to put up at least $15,000, one or more other shareholders would put up the other $35,000.

d) Using incorporation documents and directors resolutions, open a bank account at a Singapore bank. Deposit the money for the shares into the bank.

e) Request a bank statement so that you can file with MOM.

f) Go online to update your Bizfile records to reflect shareholders and paid up capital amounts.

Submit updated Bizfile records, bank statements and AIP to MOM so that final processing can occur.

Two points to bear in mind: The $50,000 must be paid up capital, gained through the issuance of shares. It cannot be in the form of a loan by someone that can be easily drawn back out. Second, you must have the money in place, the bank account set up, and the shareholders recorded before MOM starts the Assessment and Approval process.

MOM will not issue an EntrePass to a foreigner who wishes to register and run a sole-proprietorship or partnership.

http://www.mom.gov.sg/foreign-manpower/ ... fault.aspx

http://www.acra.gov.sg/Company/Starting ... ompany.htm

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Postby savestheday » Fri, 06 May 2011 3:57 pm

Unless they have scrapped the 1 month AIP timeframe limit in the last month then that is incorrect.

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Postby Strong Eagle » Fri, 06 May 2011 10:12 pm

savestheday wrote:Unless they have scrapped the 1 month AIP timeframe limit in the last month then that is incorrect.


What is incorrect?

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Postby savestheday » Sat, 07 May 2011 12:29 pm

Strong Eagle wrote:
savestheday wrote:Unless they have scrapped the 1 month AIP timeframe limit in the last month then that is incorrect.


What is incorrect?


When you receive the AIP there is a 1 month validity to incorporate, set up bank acct and submit bank statement, acra biz file (with noted fully paid up capital) and AIP letter.

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Six month collection limit

Postby maxidog » Thu, 16 Jun 2011 1:55 pm

Thanks to all for the comprehensive Entrepass information on this board.

In addition to the time limits above, the MOM website says the Entrepass must be collected within six months from when the IPA letter is issued.

I'm intending to apply well in advance of coming to Singapore and then, assuming my application is successful, collect the Entrepass a good few months after the IPA letter. Please could anyone confirm that the pass' 1 or 2 year validity runs from the date of collection, not the date of the IPA letter or some other date?

It's important to me because it's going to be challenging for my software business to employ sufficient Singaporeans as required for renewal anyway, and having to renew up to six months earlier than anticipated could mean missing the targets.

(While I'm at it -- I've read on this board that the copies of degree certificates etc that are required for the application can just be photocopies, not certified copies, if the original is English. Would be great to get confirmation of that if poss.)

Cheers,

Max

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Postby maxidog » Wed, 03 Aug 2011 11:33 am

Thought I'd come back and answer my own question here in case it benefits others.

According to MOM, the initial Entrepass runs for 1 or 2 years from the date of issuance via EP Online. That can be up to six months after you get the IPA letter, so don't go through the issuance process until you really need the Entrepass. You have to be in Singapore before issuance anyway, so I'm not quite sure when it actually becomes necessary.

One other thing I've learned is that if you're going the S$3,000 guarantee route for your dependent visas, then you have to include a letter with each application saying "I undertake to furnish a banker’s guarantee of S$3,000 upon the approval of the Dependant Pass application in lieu of local sponsorship." Otherwise they send the application back.

Hope that's useful to someone.

Cheers,

Max

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Postby sundaymorningstaple » Wed, 03 Aug 2011 12:04 pm

This is good info. Thanks. How's your situation coming along?

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Postby maxidog » Wed, 03 Aug 2011 12:19 pm

Hi SMS, thanks for asking though I don't have much to report yet I'm afraid. I submitted the application exactly three weeks ago and had the dependent visa applications returned to me, but haven't heard anything else so far. I've already got my very own FIN though, so that's feels like progress at least!

Really hoping I get a two year initial period so I don't have to worry about TBS and number of employees after just 12 months. The rules seem quite fair apart from that -- 12 months is too early to be judging a tech business based only on how much it's spending.

Cheers,

Max

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Postby sundaymorningstaple » Wed, 03 Aug 2011 12:29 pm

Keep us posted. You guys are our major sources of the information that we dispense! :wink:

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Postby maxidog » Wed, 14 Sep 2011 4:05 pm

Crikey, so I just got the Entrepass IPA letter and it's only for 12 months from when (or if) I collect the pass.

You have to send the renewal papers in 2 months before expiry, so it's only 10 months really. And you can't rent a home without a pass, so I'd have to collect it before moving the family to Singapore. Allowing another month to get audited accounts done, that's only about 8 months to spend $100,000 with local suppliers and employees.

And the renewal is guaranteed to be 1 year only then $150,000+4 local employees, which I already knew but now it's only 20 months away.

My application was pretty strong (I have masters...), so maybe they aren't giving anyone 2 years with the political situation being what it is. Of course, once you're employing local people who are important to the business you can't just up sticks and leave. So if things didn't go well enough to meet the targets, I'd be forced to employ people to do nothing in order to keep the important people. Horrible.

Decision time... really start a business in Singapore or just have an extended holiday for up to 11 months while preparing to set it up elsewhere. Or just go somewhere else which, frankly, is probably what most Singaporeans would prefer.

Anyway, here's some detail on the process that I think could be useful to anyone not put off by the above:

- From handing in the application at Singpost to getting the IPA letter took exactly two months, doing everything as quickly as it could be done.

- The online application status doesn't change from pending to approved when you get the AIP letter, only with the IPA letter. And you get an email notification before the IPA is sent out, so there's no much point checking the status online.

- MOM is consistently sending out letters dated 1 week before they're delivered, so it's pretty hard to get everything done within the AIP letter's 30 day deadline. I recommend sending a request for an extension on the day you receive the letter, as it takes them a few weeks to reply but they're happy to provide one.

- Despite government websites to the contrary, Entrepass applicants cannot incorporate the company themselves using BizFile. You have to use a local firm to do it, and both the ones with high profiles online require you to also take their company secretarial service from the date of incorporation, which you don't actually need for six months. Even a friend with an EP couldn't do the incorporation; there seems to be a rule preventing foreigners from incorporating companies with foreign directors.

- However, you can get a Singpass online from the Monday morning after the IPA approval email comes through. So at least you can use EP Online to get the pass issued without having to enlist an employment agency.

- I did the application myself and I'd recommend it if you want to save $2,500 and know someone in Singapore to forward letters. There wasn't any point I felt I needed professional advice. But then I only got 12 months, so what do I know?

Cheers,

Max

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Postby savestheday » Sun, 18 Sep 2011 11:47 am

Pretty much what I went through there, although my time seemed to be more stressful and hit more roadblocks haha.

Regarding your point on the employee and business spend situation with the ridiculously small time frame they give you (<12 months), I feel/hope they will be lenient on this. I may/should clear the business spend but won't hit the employee targets. I did initially say that we wouldn't hit those in the business plan which was approved, so I feel depending on the type of business you're involved in (e.g if it adds value to the country) and if you are progressing and hitting some of their targets then your entrepass will be renewed. Unfortunately there is just no guarantee and it is a big risk, one which I have taken. Best of luck with whatever you decide.

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Postby maxidog » Mon, 19 Sep 2011 10:29 am

Thanks for posting, savestheday, it's good to hear others are in the same boat. I don't think I'm going to proceed, but still thinking it over. Will be very interested to hear how your renewal goes -- hope it goes well for you.

Cheers,

Max

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Postby ksl » Tue, 11 Oct 2011 11:12 am

maxidog wrote:Thanks for posting, savestheday, it's good to hear others are in the same boat. I don't think I'm going to proceed, but still thinking it over. Will be very interested to hear how your renewal goes -- hope it goes well for you.

Cheers,

Max
My application was pretty strong (I have masters...),
Your Masters is showing your real worth in what you write, considering you have made and submitted a business plan, it looks pretty obvious you haven't the confidence of taking on the challenge. The criteria is also made to sort out the time wasters on holiday like you suggest you may take. Personally I think your obvious market research on Singapore and other Countries backs up peoples thoughts about your self confidence. That MBA was surely a waste of money when you don't have the self confidence to carry out your own business plan due to insecurities of failing to meet the deadline or you cannot make your mind up if Singapore is the right Country to do it. So you want to make a holiday of it! I doubt you will ever do that, that's too risky! :wink: Though i doubt you will get a second chance in Singapore that's for sure!

Renewal is on a case by case scenario based on your performance, and technical hindrances like market conditions compared to other start ups, no effort means no renewal.

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Postby sundaymorningstaple » Tue, 11 Oct 2011 11:23 am

See ksl, even you aren't immune to it! :lol:

I still don't understand why people from certain countries think Masters = Entitlement. It's like they are being educated using the Peter Principle. :P


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