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Business for Young Foreigners

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sktale
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Business for Young Foreigners

Postby sktale » Thu, 27 Sep 2012 3:30 pm

Hi,

Here is the scenario. We are three foreigners ( currently on either EP or S Pass ) working in Singapore in respective companies. We wish to start a business in Singapore. We have a Singapore national as the 4th partner. Frankly speaking we are very young yet and do not have much reserves of cash to apply for Entrepreneur Pass.( Read 50K $). Hence, as far as my knowledge we apply for EP each holding the company shares less than 30%

Que 1.
How much chances of our EP being approved as the directors for our new company. My concern is currently we are either programmers or consultants on our current passes, also very young. Is there a chance of our passes as Directors/ Managers being approved in our new company ?

Que 2. How does the timeline goes for our registration. Is it ok to register the new company as share holders when we are holding our current passes ? Or is it mandatory that we resign our current passes, move out of the country and then register the company as shareholders and then apply for EP to move in again to work under our own company.

Thanks for any insight/tips in advance

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Strong Eagle
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Postby Strong Eagle » Thu, 27 Sep 2012 4:15 pm

The odds are low that you will be approved for any kind of a pass. The Entrepass used to be handed out under very generous conditions. It was abused by many. The whole point of tightening up the regulations was to stop people with insufficient experience and insufficient capital from using the Entrepass as a backdoor way into Singapore.

People who have formed a company and then successfully applied for an EP typically already have a track record as a business owner, have consulting or professional contracts already in place, and/or have a solid record of success in the role they are taking on.

If your Singapore business partner is the managing director, and you all are going to be paid S$8,000 each or more, then maybe... but even then, MOM has cracked down because on unscrupulous set ups where a person is paid S$8,000, then gives most of it back under the table. You need to demonstrate the experience, and the company would need to demonstrate that it has contracts to cover the salaries.

Stranger things have happened but I'd bet against you before I'd bet on you.

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Postby sktale » Thu, 27 Sep 2012 5:01 pm

Hi Strong Eagle,

Thanks for your insights. We do have some contracts in the pipeline.

We probably would stay with applying for EP at our respective designations then :)

I wonder if you have any idea for my Question 2.

Thanks again :)

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Postby sundaymorningstaple » Thu, 27 Sep 2012 5:43 pm

sktale wrote:
We probably would stay with applying for EP at our respective designations then :)


Working for another company without a proper work visa will get you tossed out of the country quite quickly. Additionally, you cannot work at two companies while on an EP.

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Postby sktale » Thu, 27 Sep 2012 6:10 pm

Hi,

Thanks for your reply. I never meant working for two companies :)

I am just stating investing in other company as a foreigner :)

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Postby Strong Eagle » Thu, 27 Sep 2012 9:40 pm

Re: Q2. You cannot set up your own company. You need your Singapore partner to set up the company. Then you can be a shareholder. You can be a shareholder while on EP.

But bear in mind that MOM has seen all the tricks. You are going to work for this start up, aren't you?

Make sure that you get a proper EP from your new company. If you are caught moonlighting, you will be tossed.

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Postby sktale » Fri, 28 Sep 2012 9:59 am

Strong Eagle,

Ya, it would best that we guys resign from our current jobs. Then Register the new company as shareholders and then apply for new Passes under the new company.

Cheers :)

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Postby AnthonyC » Tue, 09 Oct 2012 3:58 pm

Strong Eagle wrote:The odds are low that you will be approved for any kind of a pass. The Entrepass used to be handed out under very generous conditions. It was abused by many. The whole point of tightening up the regulations was to stop people with insufficient experience and insufficient capital from using the Entrepass as a backdoor way into Singapore.

People who have formed a company and then successfully applied for an EP typically already have a track record as a business owner, have consulting or professional contracts already in place, and/or have a solid record of success in the role they are taking on.

If your Singapore business partner is the managing director, and you all are going to be paid S$8,000 each or more, then maybe... but even then, MOM has cracked down because on unscrupulous set ups where a person is paid S$8,000, then gives most of it back under the table. You need to demonstrate the experience, and the company would need to demonstrate that it has contracts to cover the salaries.

Stranger things have happened but I'd bet against you before I'd bet on you.


Just like to add to your comment earlier Strong Eagle.

You have to build a strong case to MOM that:

1. The company you intend to work for has enough financial backing, and has hired local Singaporeans. That means you need paid up capital of at least $25k. If the company has a company shareholder with a strong capital base, this can help.

2. The experience the role demands are not available locally. You have to look at why a foreigner is required for the role, and why you make a good choice for the position.

If you can tick these check boxes, you have a chance.

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Postby diseq » Tue, 16 Oct 2012 12:32 pm

Strong Eagle wrote: It was abused by many. The whole point of tightening up the regulations was to stop people with insufficient experience and insufficient capital from using the Entrepass as a backdoor way into Singapore.

People who have formed a company and then successfully applied for an EP typically already have a track record as a business owner, have consulting or professional contracts already in place, and/or have a solid record of success in the role they are taking on.

If your Singapore business partner is the managing director, and you all are going to be paid S$8,000 each or more, then maybe... but even then, MOM has cracked down because on unscrupulous set ups where a person is paid S$8,000, then gives most of it back under the table. You need to demonstrate the experience, and the company would need to demonstrate that it has contracts to cover the salaries.


Would it be possible to give a few details regarding what were the type of abuses that led to the current situation with the Entrepass ?

It seems that the general consensus among tech entrepreneurs I have met in Sg is that the Entrepass is far more trouble than it's worth.
50k capital is peanuts, but can you afford to hire 8 Singaporeans for your P1 to do nothing just so you can continue doing business? What if you don't achieve the objectives in the business plan, which is the the case with the majority of new companies - thus no renewal?

I may be mistaken, but all the people I know who have recently opened companies went with the EP route, including the ones with tens of years of experience and 500k+ capital.

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Postby Strong Eagle » Tue, 16 Oct 2012 1:47 pm

diseq wrote:Would it be possible to give a few details regarding what were the type of abuses that led to the current situation with the Entrepass ?


The original Entrepass application requirements consisted of a business plan, period. No reference to any number of people that needed to be hired, nor any revenue targets. There was not even any reference to having to meet your own targets in your business plan.

No one bothered to check if the business plan actually demonstrated sufficient capital to get the business up and running, and even if there were sufficient capital, no check was made to see if there was actual capital in an actual bank account.

No attempt, or at least very little attempt, was made to vet the credentials of the people filing for an Entrepass, nor was the experience or skill sets proposed in the new business.

Groups of people who would nor normally be granted entry into Singapore created all sorts of new businesses, most all of them doomed to fail because they were insufficiently capitalized and because the people who filed the applications had no idea how to run a business.

I cannot find the source, and I do remember reading that the majority of Entrepass businesses in Singapore were failing... but who cares... the applicants were in Singapore, with dependents, looking for a job, or working on the sly.

The gahmen finally wised up. As I have noted before, if you have a track record, and have capital, you can form a company and get an EP. But, if you are from the subcontinent, have only $50K, and not much of a track record, your EP will never be approved. You must take the Entrepass route. The whole point is to discourage the people who scammed the system.

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Postby urukhai » Mon, 29 Oct 2012 9:34 pm

Hi sktale,

I'm also on the same boat as you. I'm currently on an EP and planning to resign soon from my current job to start a technology company.

I spoke to a company registration consultant recently and he said that it would be better to be a minority share holder (20%) initially to have a better chance of getting an EP. The other 80% will go to my Singaporean partner. Originally the plan is to have a 50% / 50% share. Once EP is approved, then my 30% shares can be transferred back to me.

Have you started the company registration? Have you resigned already from your current job?

We're going to register soon. I must admit though the EP application for me for the new company is scaring me. Judging from the sound of the posts here in this thread, it seems like it's a tall order. But then again, I think this is part of the challenge of creating a business here in Singapore.


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