EBOS has been setting up business for foreigners and partnership with both local and overseas directors. Due to the strong demand in foreigner talent in Singapore, many Employment Pass (“EP”) Holders asked if they could register a company in Singapore.
The answer is YES. However, you can only own shares in a Singapore company, except that MOM does not allow an EP holder to be a director in the company or work in a second job. Specifically, an EP holder is only allowed to be a director in the company which applied for his EP (or upon MOM approval via Letter of Consent in related companies of the employer or related to his/her work).
Under the Companies Act requirement, a company request at least 1 resident director, and this proof to be a challenge for the EP holder.
EBOS Cloud Accountants provide a customed solution to get around this issue and we will dive into several common scenarios and discuss our recommended solutions.
Scenario 1: EP holder is an investor in a friend’s company and the EP holder will not take an active role or a director position.
This is a straightforward scenario where a transfer of share or allotment of new shares for the EP holder. The EP holder also like to perform due diligence prior of investing in a Singapore registered company. As there is a local director in the existing company, the EP holder may have the option to be a foreign director subjected to the employment rules of his employer.
Scenario 2: EP holder wishes to set up a company alone while maintaining his current EP with his current employer. The EP holder is the new company’s shareholder and only foreigner director. In this scenario, the EP holder will require nominee director service to fulfil the Companies Act.
EBOS Cloud Accountants provide a range of services including but not limited to, which will be sufficient for the business to get started:
• Basic Corporate Secretarial Package
• Virtual Address
• Cloud Accounting Package
If the EP holder eventually decides to work on the business full-time, EBOS can assist the EP holder to apply for an EP under the new company. Once the EP holder obtains the new EP under his own company, the company will no longer requires EBOS’s nominee director service.
Scenario 3: EP holder wishes to set up a company and begin an application for an EP under the new company. The EP holder will leave his current employer and seek to be an entrepreneur focusing on his newfound business.
EBOS will help the EP holder incorporate a company with nominee director service as per scenario 2.
EP application will around 6 to 12 months subjected to MOM regulations and the company structure.
The Employment Pass allows foreign professionals, managers and executives to work in Singapore. Candidates need to earn at least $3,900 a month and have acceptable qualifications. Employers must also demonstrate that they have fairly considered all jobseekers. The pay scale will also increases according to the applicant’s level of experience. The shareholders of the company will also need to fund a relatively large amount of paid-up capital as MOM see this as a commitment and indicative ability of the company to pay the salary of the EP applicant. Company with low share capital should think wisely before using this method. It will affect your ability to stay in Singapore if you cannot obtain the Employment Pass and you have decided to hand in your resignation letter to your existing employer.
Singapore is a business-friendly country and encourage more entrepreneurs to start their business here! EBOS Cloud Accountants supports our clients in Incorporation, Secretarial, Cloud Accounting, and Work Pass Services. Arrange a complimentary consultation if you are interested to learn about how to set up a globally accepted business entity in Singapore.