Working for a newly incorporated company on a PEP

[BoroBoy]

My friend has a small IT business in Japan and is looking to extend into Singapore. It is so far profitable but has only existed for 8 months. Can he create a legal entity in Singapore then employ me on my PEP? He wil be paying me more than the $35k threshold.

It seems like it should be ok to me but I dont know where the barrier is between doing this and having to apply for a EntrePass. He himself wont be moving to Singapore and will remain in Japan.

Does this qualify as 'entrepreneurial' for me and therefore is against the PEP rules? I will just be an employee of his company so in my definition its not entrepreneurial or self employed .. However, we are still discussing the packing and giving me some share options is one possibility but would that make it 'entrepreneurial'?

Any help on understanding the rules will be great as I have read all of the material and still cant work out if it will be ok.

[Strong Eagle]

Because you are a PEP, you can legally be a director of the company. If you are a sole director you will need an outside secretary. In other words you can work for and be an officer of the company, small or not.

What you want to guard against is being seen as the down and dirty way to an EP. Lots of people try to form a company then apply for an EP as a way to circumvent the Entrepass process.

It would seem that those who have a viable business elsewhere and are trying to establish/move a branch to Singapore, the odds of this working are much better. And in your case, it's not like you're trying to gain an EP, although it might look like a way to avoid the six month limitation on a PEP for non employment.

Thus, you should have a business plan ready, which includes information to demonstrate that this is a viable operation.

[BoroBoy]

Thanks strong eagle. Good point about it looking like a way to get around the 6 month rule. That's not the case but we will be lucky if the sg entity is profitable within 6 months - does that matter or is it based on the parent company? So if the sg entity is not profitable and the govt think its a scam to get around 6 month employment what will they do? I'm happy to show the business case at that point or even before but then that's sounding more like a entrepass. Would they cancel my PEP without any questions?

I am on a biz trip at the moment but would you recommend discussing with the MOM when I am back?

[BoroBoy]

Any more advice from anyone would be appreciated. It's a tricky one I guess..

[BoroBoy]

I actually think creating a Representative Office is the best way to go: http://www.guidemesingapore.com/incorpo ... comparison

Does anybody have any experience of this and know how well it works in practice. It seems to be ideal for our needs and in 12-18 months time we can change it to be a Singapore Branch entity.

[sundaymorningstaple]

Couple of questions/comments......

If you are generating an income stream - cannot use Representative Office

You cannot conduct any business with companies in Singapore

You must be a staff member from the parent company - I am of the impression that you are a Singaporean.

Appointment of officers - must appoint a Chief Representative who will relocate from headquarters

[beppi]

I worked for (in fact helped to start) a Singapore Rep Office of a foreign company before. I am PR, the others had EPs - I guess PEP should be o.k.
We were all employed by the Rep Office (not headquarter) and didn't relocate from the headquarter either (but one came from another Asian branch office, which was closed down).
We did Sales and Technical Services Asia-wide, didn't rule out Singapore clients but in fact never got a deal here. All contracts (and payments) were with the headquarter, as a Rep Office cannot generate revenue.
SMS: Some of this contradicts what you said above. Have the rules changed since? (This was 2007/08.)

[sundaymorningstaple]

Not sure as it's not really my bailiwick. I took the info from the guidemesingapore website (Janus) so cannot verify if/as/when the requirements changed. See the OP's link provided above.