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Consultant - one person business formation

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martincymru
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Consultant - one person business formation

Postby martincymru » Mon, 27 May 2013 9:43 am

1. Question: Based on the information below is Private Limited Company (is this the precise term used by all govt agencies ?) the best option for me for my Business formation?

2. ( I have read some threads, noting some recent changes so I am grateful for a simple up to date answer at this stage please ).

3. Facts:
Claims Consultant in Construction Industry (10 years experience)
one person business
PEP expires 7 Aug 2013
Have contracts/clients waiting
No employees predicted
Turnover predicted 100k sing per annum

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Postby sundaymorningstaple » Mon, 27 May 2013 11:13 am

Don't think it will fly.

You would need a local director first of all. Secondly, as a new startup, I cannot see MOM granting an employment pass for what is going to be a one man company as that flies in the face of the EntrePass Scheme which has been revamped to stop that kind of thing. The fact that it's a local Pte Ltd wouldn't have much bearing, I would think, if the only employee is a foreigner.

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Postby katbh » Mon, 27 May 2013 12:50 pm

You can easily set up one person company (Pte Ltd) if you are on PEP. You are a resident and can therefore set up company with you as resident director. You can get a local Company Secretarial Service as your company secretary or as non share holding director. Then your company sponsors you for employment pass. If you have qualifications (tertiary) and current salary (does not need to be in your own company), it is possible for you to get an employment pass this way.
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Postby sundaymorningstaple » Mon, 27 May 2013 1:18 pm

KEY POINTS ABOUT PEP
PEP pass holders are not allowed to start their own business in Singapore i.e they cannot be employed by their own company.
PEP holder can be a salary-drawing director of a company as long as the company is not owned by them.


http://www.guidemesingapore.com/relocat ... pep-scheme

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Postby katbh » Mon, 27 May 2013 2:19 pm

We have just done this and yes it is possible, but not necessarily the most secure of feelings while you are doing it.
You set up a company using one to the local companies here. There are many Company Secretarial services that do this. They are listed as the directors and share holders (you change these once you have your employment pass and once you start trading).
Then you apply for an EP. Sometimes I believe you need to hand in your PEP other times, as in our case, you can apply (but only on paper forms, not by eponline) and when the IPA comes in, you then hand in your PEP and take up EP.
The best way to do it is to go and talk to someone at MOM about what you want to do. They are helpful but will not 'give advice'.
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Postby martincymru » Mon, 27 May 2013 6:30 pm

I spoke to ACCRA (1pm today 27 may 2013). He said (kind of informally)

"I think MOM will not allow PEP holder to set up own company."

This concurs with post by SMS and the URL link SMS cited.

MOM said (at 3pm today 27 May 2013) "PEP holder can be a director of a company as long as the company is not owned by them". This again concurs with SMS (quoting MOM website).

Dear SMS, do you agree with katbh's last posting generally or in absolute terms since his/her comments appear to contradict your point(s)? Also (forgive me) but how does MOM know (or indeed me) know it is/ or going to continue to be, a one-man business? Surely many Ltd companies are owned, run and operated by one person as employee and a Director?

Dear katbh, any specialist company/person in this topic area appreciated (assuming this Expat Forum website allows such suggestions). Did you do it all yourself or engage outside help?

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Postby sundaymorningstaple » Mon, 27 May 2013 11:14 pm

martin, let's put it this way. I'm not saying it cannot be done. However, I am pointing out the official view and the correct view. We cannot do otherwise here as we do not know what has been inadvertently or deliberately left out of some members post who "claim" they did it legally but it flies in the face of both verbal and written information by the respective government bodies. Therefore, I would have to discount the other posters view (of which I do disagree with - not saying he didn't accomplish it by possibly cutting some corners or playing loosely with the truth when applying to ICA/ACRA/MOM.

To put is another way, in the words of Dirty Harry, "Do you feel lucky"? Unlucky means banished from Singapore, forevermore. I can only give you the official guidelines.

sms

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Postby Wd40 » Tue, 28 May 2013 12:54 am

I think you guys are misinterpreting regarding the "PEP cannot start business" thing. The rule just states that you cannot just go and start a business like an SC/PR can do.

What Khatb is telling is different. He is telling you start a company with some other people as directors and then they apply EP for you and then you cancel your PEP.

I have one question for Khatb, why do you need to cancel your PEP, since as a PEP holder it lets you work for any company, so are you saying this is something an EP holder can do but PEP holder cant do?

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Postby Strong Eagle » Tue, 28 May 2013 2:19 am

It really depends upon whether or not you can convince MOM to go along with the deal.

Clearly, forming a company and then "working" for it is a scam that ACRA and MOM are well aware of... unemployed PEP's trying to stay in the country as long as possible. The PEP holder doesn't have a contract or a client, and is probably not getting paid anything.

OTOH, professionals in several areas have successfully incorporated a private limited (and yes, this is indeed the way you would want to go), then applied for an EP with the newly formed company. It is a way around onerous Entrepass rules that would prevent any professional in finance, law, or technology from setting up shop, and from an email conversation I had with MOM a while back, they are aware that Entrepass effectively blocks qualified professionals and will consider each of these applications on a case by case basis.

My view aligns with SMS. You probably cannot get approval from MOM to work for your own company. Instead, you should take the route as stated above, and get an EP. Any person can form a company according to IRAS. You would get your own nominee director so that you yourself would not run afoul of the PEP rules about being a director of a company that you own. Once your EP is issued, you can become the director and remove your nominee director.

You should make your application for EP much the same way as you would for an Entrepass... a concise business plan that demonstrates clients and contracts, and your expertise. You should have five years worth of pro forma financial statements showing your break even point. You should open a bank account in your company's name and put enough money in it to handle start up and costs, including your own salary, until you are profitable. You should note the local Singaporeans you will hire as auditors, accountants, etc, and the fact that you keep your money in Singapore banks.

The whole point of this exercise is to:

a) Prove that you are not setting up a scam/sham company to avoid leaving Singapore.

b) Demonstrate that you are a qualified professional with a viable business that has clients and contracts.

c) That you are a competent businessman as evidenced by a business plan and pro forma statements.

It's still not a slam dunk and several people on this board have done this.

For actual PEP details, see here: http://www.mom.gov.sg/foreign-manpower/ ... ligibility

For an outline of the business plan I used to get my Entrepass, see here: http://www.herberts.org/miscdocs/Sample ... ntents.pdf. It may be more than you need.

And, you should read the details about business plans under my Entrepass thread: ftopic93619.html. I believe that most of the information is applicable for a professional trying to get an EP.

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Postby stiwi » Tue, 28 May 2013 4:51 am

I concur what SE wrote above. It is doable and it is not necessarily considered as a SCAM, although I can see MOM is looking closer on such individuals now. In 2009 when I setup Pte Ltd and applied for EP, MOM wanted to see client agreement and employment contract pretty much only.

I left SG last year and now re-applied for EP thinking it will be easier considering the company had already 3 years history based on NOA (albeit no local employees). MOM asked for much more documents than first time in 2009. In addition to client agreements and employment contract, they asked to explain company business activities, applicant duties, show recent sales invoices, tenancy agreement of place of business (which I didn't have, although company registration address provided by the secretarial companies is suffice) and latest audited financial statements.

I got approval few days ago. The good thing is that this process takes few days now when EP application is lodged via EP Online. In 2009 I was waiting 4 weeks before they asked for more documents and after total 8 weeks I had EP. Now everything took 10 working days.

I am wondering if anyone has done PR this way (being one man company)?

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Postby martincymru » Thu, 08 Aug 2013 11:50 am

As the original OP here is my update:

PEP expired 06 Aug 2013. 30 day Disembarkation Letter given.

I have a confirmed Contract with large Company in Sg to provide a fee based one person Consultancy service. Contract is in preparation and should be executed next week. Work start date is unconfirmed but probably Oct 2013.

It’s a new business; I ran identical in UK some years ago (1990-2000).

Is this task sequence in the correct order:-
a) Obtain Nominee Director
b) Accra – register new Private Ltd Co
c) Apply to MOM for EP

Are these the only primary docs I need to supply to MOM when apply for EP?

a) Qualifications
b) Experience
c) Simple Business Plan
d) Copy of Fee Contract (as mentioned above)
e) Bank Details (ABC Ltd)

Question:
HSBC/Raffles Place say “must maintain 100k all the time in your account…..â€Â

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Postby katbh » Thu, 08 Aug 2013 12:13 pm

If you have a new start up company both OCBC and UOB have start up accounts. From memory it is only a $500 deposit. The minimum average balance amount is only to avoid paying bank fees. All you need are your company articles and a banking resolution (you can get a standard one of these from the bank). Steer clear of HSBC for local banking.

OCBC is the cheapest option and also has good internet banking

http://www.ocbc.com/business-banking/ac ... count.html

UOB is also far cheaper than HSBC -

http://www.uob.com.sg/corporate/commerc ... count.html


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