Living in Malaysia and travelling regularly to Singapore

[StamfordBridge]

Hi, I would appreciate an opinion.

I am a British citizen currently living and running an IT company in Singapore on an EntrePass visa. Due to the high overheads here, I am thinking of forgoing my EntrePass, moving my operations to JB where I will be setting up a similar company and getting the Singapore company to continue operating here and outsource the jobs to the Malaysian company. I will be living in JB too.

I will however, have to come down here about once or twice a week on a social visit pass to attend meetings and return the same day.

My question is: will the Singapore customs have an issue with me vising the country so frequently? technically, I will be representing my Malaysian company which is serving a Singapore based client, so I assume it should not be a problem, or am I wrong?

[Strong Eagle]

You should not have an issue. Neither Malaysia nor Singapore has any rules concerning the number of times you may visit. I did the same thing in reverse for nearly 18 months. Consider the boatloads of people that fly back and forth everyday.

You will, however, need to have an "ordinarily resident" director in Singapore for your business and you should check out the tax laws applicable to non resident directors.

[StamfordBridge]

You should not have an issue. Neither Malaysia nor Singapore has any rules concerning the number of times you may visit. I did the same thing in reverse for nearly 18 months. Consider the boatloads of people that fly back and forth everyday.

You will, however, need to have an "ordinarily resident" director in Singapore for your business and you should check out the tax laws applicable to non resident directors.

Thanks very much for your input, Strong Eagle.

[Max Headroom]

You should not have an issue. Neither Malaysia nor Singapore has any rules concerning the number of times you may visit. I did the same thing in reverse for nearly 18 months. Consider the boatloads of people that fly back and forth everyday.

You will, however, need to have an "ordinarily resident" director in Singapore for your business and you should check out the tax laws applicable to non resident directors.

Thanks very much for your input, Strong Eagle.

It's an interesting solution, but you're aware that you'll need at least one Malaysian Director to open a Sdn Bhd in Malaysia?

Plus you'll have 2 sets of secretarial services to contend with. And your tax submissions will double, since you now have 2 companies generating revenues in 2 countries.

Not that I'm dissing your construction; on the contrary, I'm quite curious to its ins and outs, because I've been toying with a similar idea as you. Perhaps you can keep us posted?

[Strong Eagle]

You should not have an issue. Neither Malaysia nor Singapore has any rules concerning the number of times you may visit. I did the same thing in reverse for nearly 18 months. Consider the boatloads of people that fly back and forth everyday.

You will, however, need to have an "ordinarily resident" director in Singapore for your business and you should check out the tax laws applicable to non resident directors.

Thanks very much for your input, Strong Eagle.

It's an interesting solution, but you're aware that you'll need at least one Malaysian Director to open a Sdn Bhd in Malaysia?

Plus you'll have 2 sets of secretarial services to contend with. And your tax submissions will double, since you now have 2 companies generating revenues in 2 countries.

Not that I'm dissing your construction; on the contrary, I'm quite curious to its ins and outs, because I've been toying with a similar idea as you. Perhaps you can keep us posted?

Actually, issues of double taxation can be handled without much issue. Within the rules, one company invoices for management or professional services, while the other records this as an expense item. So long as tax is being paid in at least one country on income earned there should be no issues.

True about needing two secretarial/accounting services. What's more complex though is the founding of a business, work permits, and legal residency. ICT "corridor" companies are now allowed all over Malaysia, and JB offers its own "corridor". Corridor companies have less stringent financial requirements... as I recall, MYR 500,000 needs to be invested in a traditional company for a director to have a work permit.

Rather than establishing a company, with attendant Malaysian tax consequences, the OP could consider the "second home" program which grants legal residency rights in exchange for investing money in Malaysia.

What is important here is to not cross the line of appearing to be an individual coming into Singapore to work on a social visit pass. Travelling for business meetings seems to be OK, and so long as you have a passport with a stamp granting you legal residency in Malaysia, this should work.

In 18 months of travel between KL and Singapore (about 50 flights), I was asked only once why I was coming to Malaysia so often. My response was that I had a project in Singapore but my client's headquarters were in KL. No problem there. I suspect it will work in a similar way in Singapore.

[Strong Eagle]

I talked to a friend of mine knowledgeable in the Malaysian end of things. Here is what he said.

He can set up a company in the Malaysian MSC. There are 30 MSC locations across Malaysia. Details at http://www.mscmalaysia.my/node/193. In Johor its only in Johore Baru. Iskandar is not MSC certified yet.
He needs two directors with local Malaysian addresses. If MSC, it can be a RM 2 company. He needs submit a business plan to show that he is doing ICT business. Cannot be trading business. Attached some details.

.

I've uploaded the brochure he sent me and it is available here: http://www.herberts.org/miscdocs/MDEC%2 ... ERVICE.pdf and here: http://www.herberts.org/miscdocs/MDeC%2 ... 0Sheet.pdf

He also made the point that you should attempt to get a work pass as the director of the Singapore company to eliminate any issues with traveling back and forth.

[StamfordBridge]

I talked to a friend of mine knowledgeable in the Malaysian end of things. Here is what he said.

He can set up a company in the Malaysian MSC. There are 30 MSC locations across Malaysia. Details at http://www.mscmalaysia.my/node/193. In Johor its only in Johore Baru. Iskandar is not MSC certified yet.
He needs two directors with local Malaysian addresses. If MSC, it can be a RM 2 company. He needs submit a business plan to show that he is doing ICT business. Cannot be trading business. Attached some details.

.

I've uploaded the brochure he sent me and it is available here: http://www.herberts.org/miscdocs/MDEC%2 ... ERVICE.pdf and here: http://www.herberts.org/miscdocs/MDeC%2 ... 0Sheet.pdf

He also made the point that you should attempt to get a work pass as the director of the Singapore company to eliminate any issues with traveling back and forth.

Thanks for all the inputs. I was just replying to the earlier post when your latest one suddenly came through. I will read it after this, but I have looked into the options for operating from Malaysia, and it seems that going down the route of a 'Labuan' company is ideal, as it looks to be a lot less demanding in terms of requirements than the other solutions.

You basically set up an offshore company on Labuan island and apply for a work permit on that basis, and that will allow you to stay in Malaysia.

The main advantages of this over an Sdn Bhd company are that you can be the sole director and shareholder, there are no minimum paid up capital requirements and the maximum corporate tax that you will pay is RM 20,000.

The catch, however, is that you can only trade with non-Malysian companies and only in a foreign currency, but that is what intend to do anyway.

Here is one website that explain how this works: http://labuantax.com/

[StamfordBridge]

I talked to a friend of mine knowledgeable in the Malaysian end of things. Here is what he said.

He can set up a company in the Malaysian MSC. There are 30 MSC locations across Malaysia. Details at http://www.mscmalaysia.my/node/193. In Johor its only in Johore Baru. Iskandar is not MSC certified yet.
He needs two directors with local Malaysian addresses. If MSC, it can be a RM 2 company. He needs submit a business plan to show that he is doing ICT business. Cannot be trading business. Attached some details.

.

I've uploaded the brochure he sent me and it is available here: http://www.herberts.org/miscdocs/MDEC%2 ... ERVICE.pdf and here: http://www.herberts.org/miscdocs/MDeC%2 ... 0Sheet.pdf

He also made the point that you should attempt to get a work pass as the director of the Singapore company to eliminate any issues with traveling back and forth.

This is great stuff, SE! I was totally unaware of this. Will certainly explore it. Thanks for going the extra distance.

[Max Headroom]

Never heard of that Labuan option and, frankly, it seems a little restrictive, particularly since, generally, the Sdn Bhd draw-backs mentioned here aren't really a major issue in practical terms.

By the way, one thing we found out the hard way, Malaysia government regulations, evidently, do not permit banks to receive USD as-is from overseas. All USD sums received in our bank account are automatically converted to RM before we can get our hands on it. The worst part about this is the rotten exchange rate the bank gives you.

Perhaps your Malaysia lobang has a suggestion for this too, Strong Eagle?

[Strong Eagle]

Never heard of that Labuan option and, frankly, it seems a little restrictive, particularly since, generally, the Sdn Bhd draw-backs mentioned here aren't really a major issue in practical terms.

By the way, one thing we found out the hard way, Malaysia government regulations, evidently, do not permit banks to receive USD as-is from overseas. All USD sums received in our bank account are automatically converted to RM before we can get our hands on it. The worst part about this is the rotten exchange rate the bank gives you.

Perhaps your Malaysia lobang has a suggestion for this too, Strong Eagle?

Nope. The currency restrictions are a fact. During the financial meltdown of 96/97, Malaysia basically made it impossible for banks to pull their cash out of Malaysia, as they did everywhere else, causing the crash. The currency restrictions remain.

You will notice that no bank in Singapore, or elsewhere for that matter, will publish exchange rates with the Ringgit. It's a pain in the butt. I paid rent for my apartment in KL with Singapore dollars and never knew for sure how much was actually paid.

[Max Headroom]

Well, that obviously worked back then. But it seems to me that it's time they ease that a bit. Or at least put some pressure on the banks to give punters a fair exchange rate, because we're getting clobbered now.

[Strong Eagle]

Well, that obviously worked back then. But it seems to me that it's time they ease that a bit. Or at least put some pressure on the banks to give punters a fair exchange rate, because we're getting clobbered now.

About the only option you have is to take the money in Singapore, convert it to cash and head to a money changer. Then, take the money over to JB and deposit in HSBC or whatever.

[Max Headroom]

Yup, that's pretty much what I'm doing now. Of course, this way, it still gets converted twice: from USD to SGD and then from SGD to MYR. The reason being that, from what my bank tells me, they're not permitted to accept USD here either.

But at least here the rates are better.

Anyhoo, cheers, SE.

[AngMoG]

It is possible in Singapore for individuals to open USD and EUR accounts. Citi (and possibly others) have 0 withdrawal fees if withdrawn abroad from the same bank using a card. Not sure how that translates to corporate accounts.