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Setting up PLC and Paid-Up capital of $50,000

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yupa
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Setting up PLC and Paid-Up capital of $50,000

Postby yupa » Wed, 03 Jul 2013 6:02 am


I am currently living in Singapore with a Dependent Pass.
I was hoping to do some freelance work so I applied for the Letter of Consent.
My application was failed due to my husband’s work pass being S PASS, instead of E PASS. Following this incident my husband’s employer re-applied for his pass to be upgraded twice but both their appeals were unsuccessful, saying that the law has changed recently.

Now my options are either to find an employer or apply for an Entry Pass by setting up a Private Limited Company.
I chose to set up a PLC as this was more suitable for my profession and situation even involving $50,000 paid-up capital that I don’t really need – I am a health professional who doesn’t need much money to run my practice.

My question is:
Do I need to keep $50,000 in my company’s bank account as long as the company is running or I can return the money to the owner soon after my application is approved?

I am worried if I need to submit our company’s notebook to show how the $50,000 was used next time I need to extend the pass.

Thank you for your help in advance.

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Re: Setting up PLC and Paid-Up capital of $50,000

Postby ecureilx » Wed, 03 Jul 2013 1:40 pm

yupa wrote:Thank you for your help in advance.


Entre-pass rules have been tightened, and I doubt 50,000 will get you a pass, if you don't meet other requirements like business plan, growth plan etc.

You are a health professional ? It is a big question why you don't want to work on your own EP !!! atleast that's what ICA told a suitably qualified person who was applying for LTVP :)

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Postby yupa » Wed, 03 Jul 2013 2:58 pm

Thank you for your replay, ecureilx.

Yes, I'm fully aware of that. I have a clear business plan and hope this will get me through. If they see my proposal they will know why I don't need a huge amount of money to set up my practice. I can top-up the amount if necessary. If so, do you know how much?

I'm sorry I didn't quite understand your last comment:
"You are a health professional ? It is a big question why you don't want to work on your own EP !!!", as I'd like to work on my own EP(Entry Pass). Or do you mean EmPloyer??

Anyway, I hope the following answers your wonder.
I'm in a specialized field of the health profession that is relatively new in Singapore, although it's much established profession in West, with state registration and regulation. Therefore most of my colleagues works in Singapore do freelance, and offer their "service (expertise)" to hospitals, schools and charities. There is hardly ever any employment in my work in this country yet. I'm also trying to make that happen through my company - creating job for my fellow colleagues.
I'm sill new in Singapore but I am already well connected with the local association of my work, therefore I know what's going on. I hope my company will further promote our profession in Singapore.
Also there isn't enough people who are as experienced as myself in here. For this reason I'm already receiving several enquiries and consultations through my colleagues. This includes offering the service for Singaporean government.

Don't worry I'm not a doctor trying to do doggy surgery at home ;)

Considering these fact, would you be able to answer my initial question?

"Do I need to keep $50,000 in my company's bank account as long as the company is running or I can return the money to the owner soon after my application is approved? "

Many thanks.

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Postby ecureilx » Wed, 03 Jul 2013 3:18 pm

yupa wrote:Don't worry I'm not a doctor trying to do doggy surgery at home ;)

Considering these fact, would you be able to answer my initial question?

"Do I need to keep $50,000 in my company's bank account as long as the company is running or I can return the money to the owner soon after my application is approved? "

Many thanks.


I don't doubt you are a quack doctor ;) of course not ..

For the question of whether you can take it out, I doubt it .. with newer laws coming into place to stop such activities happening.

The answer why you aren't on an EP, is what ICA told for a suitably qualified person who was applying for LTVP, not specifically telling you .. :) just an anecdote :)

Wait for Strong Eagle to reply ..

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Postby yupa » Wed, 03 Jul 2013 4:11 pm

I see...

Maybe I should involve a lawyer to increase the chance...? :???:

I'll wait for Strong Eagle's reply.

Thanks anyway, ecureilx!

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Postby Strong Eagle » Wed, 03 Jul 2013 10:14 pm

A lawyer won't do you much good, and you really don't want to apply for an Entrepass. You will not be able to meet the required spending levels for your company, nor will you be able to hire sufficient people of sufficient credentials to meet the Entrepass requirements to keep your pass. It seems pretty clear that Singapore officials are viewing the Entrepass as an inducement for foreigners to establish large industrial or service organizations here.

I recommend you read the threads I have listed below. You will want to form a pte ltd with a nominee director who will then file for an EP for you. This has been done by various professionals with success. The key, as I have noted in the threads below is to be able to demonstrate that you have a viable legitimate company and not just a scam to keep yourself in the country.

And, in your business plan, you better demonstrate a perfect understanding of the licensing requirements that you must meet, and that you do meet them. You haven't specified what your "specialty" is, and you should be prepared to be rejected if it is at all out of the mainstream. Singapore will take the safe path and deny anything that changes the status quo.

Finally, you asked about money... "Do I need to keep $50,000 in my company's bank account as long as the company is running or I can return the money to the owner soon after my application is approved? "

This demonstrates a misunderstanding of Entrepass requirements. You can't borrow money to fund the requirements. Money must be injected into the company through the purchase of shares of stock, and the person applying for the Entrepass must own at least 30 percent of the shares, ie, have $15,000 invested in shares. It is quite difficult to do share buybacks in Singapore, and paid up capital cannot be paid out as dividends.

But, as I have already noted, you don't want an Entrepass. You do want to convince the authorities that you have a legitimate business and part of that is a business plan that shows how you support yourself and your company through break even and profitability, and that will mean sufficient cash on hand to support your pro forma financial statement projections.

In summary, you need a solid business plan that includes sales and marketing. I don't want to burst your balloon, and I think you will have a very significant hurdle to get over to even get approval to practice your specialty. You should verify that first.

Further reading.

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ftopic60398.html

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Postby yupa » Fri, 05 Jul 2013 4:53 am

Thank you very much for clarifying my position.
Much appreciated!

My "speciality" is not totally out of norm and even Singaporean government is now requesting our association members to provide their service for them. However, it is true that it's far from money making business.
It is more like treating people to get well so that they can work better if I connect two things together.
I can also create work for Singaporean colleagues under my supervision but as you said, perhaps not enough employers as MOM expect for Enter Pass.

After all, I happened to have a specialized skills that is happen to be a young and growing profession in Singapore but not allowed to freelance because my husband's pass is S Pass instead of E Pass.
All my colleagues who had a Dependent Pass were allowed freelance by registering with ACRA as Sole proprietorship, then applied for Letter of Consent for self-employing themselves. Very easy process. Enter Pass process is completely out of my comfort zone for me :cry: .

I have read your links and have a few more questions to make sure I looked all possible avenues.

1. If I use CPA service to set up a pte ltd, do they choose the nominee director as part of their service or could I appoint someone by myself?

2. Is application process of setting up a pte ltd (documents we need to submit) is same as setting up a ptd, except we need to write from the nominee director's perspective?

3. Do you know what divides between S Pass and E Pass?
Looking at MOM's site, my husband's salary and education wasn't problem so I'm very confused!

Many thanks

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Postby Strong Eagle » Sat, 06 Jul 2013 9:28 pm

As below.

yupa wrote:Thank you very much for clarifying my position.
Much appreciated!

My "speciality" is not totally out of norm and even Singaporean government is now requesting our association members to provide their service for them. However, it is true that it's far from money making business.
It is more like treating people to get well so that they can work better if I connect two things together.
I can also create work for Singaporean colleagues under my supervision but as you said, perhaps not enough employers as MOM expect for Enter Pass.

After all, I happened to have a specialized skills that is happen to be a young and growing profession in Singapore but not allowed to freelance because my husband's pass is S Pass instead of E Pass.
All my colleagues who had a Dependent Pass were allowed freelance by registering with ACRA as Sole proprietorship, then applied for Letter of Consent for self-employing themselves. Very easy process. Enter Pass process is completely out of my comfort zone for me :cry: .

I have read your links and have a few more questions to make sure I looked all possible avenues.

1. If I use CPA service to set up a pte ltd, do they choose the nominee director as part of their service or could I appoint someone by myself?


You can find one yourself if that person is willing to do it. Nominee directors have all the rights and responsibilities of directors, could get you into trouble by their acts and you could get them into trouble as well. For that reason, a lot of people won't do it. Be sure to have a presigned undated letter of resignation from your director.

2. Is application process of setting up a pte ltd (documents we need to submit) is same as setting up a ptd, except we need to write from the nominee director's perspective?


Your nominee director sets the company up online with her Singpass, just like any other company. S$300 can be paid by credit card. But, I recommend you coordinate this with a CPA to make sure you have all incorporation documents in place. Your CPA could also set it up as you will need a secretary with only one director and CPA's usually fill that role.

3. Do you know what divides between S Pass and E Pass?
Looking at MOM's site, my husband's salary and education wasn't problem so I'm very confused!

Many thanks


SMS will have to weigh in on this one. I know only what the MOM website says.

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Postby sundaymorningstaple » Sun, 07 Jul 2013 12:23 am

When reading the criteria for the relevant passes from MOM, be sure you understand what the criteria says. All the criteria is for is the "minimum" criteria to allow you to apply for the pass. IT does NOT say if you have the minimum criteria you will get the pass.

The reason for this is rather simple, if you stop and think about it. Singapore is a destination of choice for other Asian countries. Therefore, people with try almost anything to get in here. By only putting a minimum criteria TO APPLY FOR a pass, it gives the government plenty of room to tweak the approval critera as and when they like. As an example.......

Taken from the MOM site:

Q1 Employment Pass
Young graduates from good institutions could qualify if they earn at least $3,000
Older applicants would have to command higher salaries to qualify, commensurate with the work experience and quality they are expected to bring


On the other hand:

Mid-level skilled foreigners (e.g. technicians) who wish to work in Singapore may apply for an S Pass. Applicants will be assessed on a points system, taking into account multiple criteria. (which is not published) S Pass applicants accumulate points based on how far they meet the criteria. As a general guide, these criteria can be broadly described as (for illustrative purposes only):

A minimum fixed monthly salary of $2,200
Older applicants would have to command higher salaries to qualify, commensurate with the work experience and quality they are expected to bring
Educational qualifications A degree, diploma
Technical certificates can be considered. These are, very broadly, courses that train the applicant to be a qualified technician or specialist in their chosen field. The certification should comprise of at least one year of full-time study.
Number of years of relevant work experience.


Additionally, if an application if borderline between S & Q1, the gahmen will go with the S pass so as to make the employer think "Do I really need this foreigner as if I really want him then it going to cost me an additional XXX dollars a month in Foreign Worker Levies. By putting on an S pass if the salary is under $4000/mo then it also reduces the number of foreigners here as they cannot have dependents here. The government is trying to reduce the number of foreigners here with a very blunt instrument. You will notice there is a considerable gap between the high end of S passes (4K/mo) and the entry end of Q1 pass of 3K/mo. Salary levels are only minimum guidelines for acceptance of the application.

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Postby yupa » Mon, 08 Jul 2013 5:45 am

Dear Strong Eagle and Sundaymorningstaple

Thank you very much for your contributions!
We are going to re-think whole things now.
My husband now has managed to speak to MOM in length and found out why he was placed as S PASS instead of E PASS which was what his employer wanted him to get in the first place.
This is kind of changing the subject but put it here for reference as someone might have the same problem as us.

The reason why my husband got S PASS was to do with his salary not matching his experience. Couldn't tell him what salary he need to get e pass because relates to his 'experience' as well as job title. Basically implied that he should be getting more money and that system was partly to protect people from getting underpaid ! If he was a fresh grad, he would get an e pass. Also criteria were only tightened last September so even by old standards he did not meet criteria.
The only way to find out what salary and post would give him e pass is to go on their self assessment and do it by trial and error until we find the right combination!!!!

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Postby sundaymorningstaple » Mon, 08 Jul 2013 6:50 am

command higher salaries to qualify, commensurate with the work experience and quality they are expected to bring


Which is exactly what I quoted from their web page.... ^^^


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