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Company Incorporation with Emplyment Pass

Company incorporation with EP for those who are already in Singapore and fearing job loss

Those who are already on
Emplyment pass in Singapore

And are already in Singapore, but potentially facing job loss. You can start your small business and work for it.

S$ 2400


How current corona situation is impacting Employment Pass Holders?

Employment Pass Holders

We are all passing through unprecedented times. The corona virus has caused havoc worldwide. While in Singapore we have been well protected due to pragmatic government intervention, the situation is not good in other countries like India, Indonesia etc.

Economic fallout of covid is slowly becoming visible. Till now Singapore businesses were protected by government Job protection scheme. Clearly government support can not go on for all along. As a result we are seeing significant losses of jobs especially for foreigners in Singapore.

It is logical that the authorities will first look for preference to be given for available jobs to Singaporeans and PRs. Foreigners on Employment pass will not be preferred for new jobs as far as possible.

If you are on EP, What this may means to you?

If you are in Singapore on employment pass and if your job is in danger then it may mean following things to you.

Employment Pass Holders
  • Employment pass holders might be the first one to lose jobs if there is a retrenchment exercise in the company
  • Getting a new job in short period may be difficult, as preference will be for local people for new jobs.
  • If your job is lost, then you get 30 days time to wind up your matters in Singapore and migrate back to your home country. The problem is if your home country is also ravaged by corona how are you going to settle back? Getting even house on rent will be a mamooth task.
  • You may have stayed in Singapore for a long time. Your kids may be in school. Your preference is to stay in Singapore for a longer duration. However due to unfortunate circumstances its difficult.

Many EP holders have stayed in Singapore for sufficiently long. Their family members have well integrated in the Singapore life. They do not really want to go back to home countries especially in this kind of times. Moreover even if they were to go back – there are no jobs or opportunities in their home country. Settling back will be a difficult option for them.

So do they have any sensible option?

The Solution

The solution is to incorporate your own company and apply for your employment pass under the company. Every year hundreds of companies in Singapore are incorporated like this and promoters relocate to Singapore. If the employment pass is approved you can continue working for your company and stay in Singapore for the duration of EP approved. Additionally your dependents can stay in Singapore on dependent pass. Steps involved in this option are as follows;

  • 1

    Incorporate Company with Local Nominee Director and you as a Shareholder

  • 2

    File application for your employment pass

  • 3

    If asked provide additional documents / appeal

  • 4

    On approval decide when you want to activate the EP – You have 6 months to exercise your Employment Pass

  • 5

    Nominee Director exits and you become director of your company

  • 6

    You start working for your company and continue your work in Singapore

Steps in Company Registration Singapore

Submit Your Inquiry for this package or call us

Things to Note

We will go through your case and suggest you additional documents to be attached with your application. In general we recommend attaching a brief business plan and a cover letter. This strengthens your application chances.

  • This option is available for Employment Pass holders only and not for S pass holders or work permit holders unless they are earning more than 6000 SGD per month
  • If you plan to apply for dependent passes for your family members then you will need to have a minimum salary of 6000 SGD declared in the new Employment pass
  • Employment passes are subject to approval by the Ministry of Manpower Singapore

But if the preference is for locals how my EP in my new company will get approved?

Employment Pass Holders

This is an important point to note. When you apply for a job in the open market, as an EP holder you will be taking up a job which otherwise a local person might have got.

However when you are incorporating your own company and applying for an EP under it, you are in fact creating one new job for yourself (And not taking somebody else’s job), and if the business works well you might create few more jobs for other Singaporeans/ PRs also.

Important : When to start working on this plan?

Employment Pass Holders

One of the main question is when should you execute this plan? If you wait too long then you may not have enough time to act. You may be left with only one month to manage all these activities.

So, in general, we recommend executing this plan as soon as possible. As mentioned below in FAQs, it, in general, may take 2-3 months to get approval for EP. So you do not want to leave it to the last moment and suffer the anxiety about the future.

As mentioned, on approval, you get in-principal approval of EP. That provides you peace of mind. Once IPA is received then things are more in your control. You will be able to execute the activation as per your own plans.

Your obligations on getting EP issued on your company

One of the key obligations you have is to receive the agreed salary as per filing every month in your account and at the year-end pay taxes on it. So if the salary you declared is 7000 SGD per month, then that you should receive in your bank account and at the end of the year pay taxes on 84000 SGD. You are free to invest back a portion of salary into the company for future growth.

Some Doubts Clarified / FAQs

Will my existing company come to know about my Company incorporation / EP application?

If the shareholding is taken in your name then it is public record and your current employer may come to know about it if they search. To avoid this you may consider putting your spouse / friends name as shareholder. However keep in mind where possible, using your name as shareholder is always recommended.

When EP is approved, and In principle letter is issued. This your existing employer will never come to know, as information about this new EP is not sent to current employer.

If my EP is approved – must I shift EP immediately because retrenchment is likely but it has not been informed to me yet?

Once the In principle letter is approved, you have 6 month period to get EP issued. In case of valid reasons, we can apply for 1 time extension of 3 months. So technically, you have 9 months to decide on your next steps.

Even if you do not activate EP in this period, the company can continue with existing director / Shareholder. Employment Pass can be applied again in future and we can expect positive result as previous record of employment pass approval already exist.

Should I apply for Employment Pass for myself or my spouse?

It depends – if your spouse is equally qualified and with relevant work experience, you can consider doing so. However you need to understand you have to give your best shot here.

If I do this, but later on I am never retrenched and I just continue with my current job then what happens to the company?

Company can continue its existence (albeit as a dormant company) for as long as you want. If everything becomes normal and as per your expectation then you can think of closing down the company.

Can I be added as a director at the time of incorporation of the company?

No you can not be added as a director of the company at the time of incorporation as you are already holding employment pass issued by another company. So the company needs to be incorporated with nominee Director.

Who should hold the shareholding? I have read various logics, 30% or more should be with me? In some sites, its written I should not hold any shareholding? So what's the reality?

Over the year the position of various visas have changed, and what you see on various websites is the understanding they had at that point of time in past. However none of that really holds true now.

  1. Shareholding on ACRA record should represent the real situation – so if you are 100% owner it should show the same
  2. If your current employer is likely to create an issue (if you take shareholding) then you may consider using your spouse or friends name instead

All applications are evaluated based on its merit, and in general holding, a specific % (or more or less) does not change the merit of the application in principle.

Am I required to open a bank account and deposit the required capital in it?

No you are not required to do so. MOM may ask maximum the proof of capital, which if you can show from your bank statement, then its enough.

You might be using your nominee Director in many companies like this? Does this not pose the problem when applying EP?

No it does not pose the problem. Nominee Director is a general industry practice of which all authorities are aware. Also we cover additional points in the cover letter and the business plan that we attach.

How much time this entire process takes (From Incorporation to EP approval)?

Considering the current long processing times with MOM (3-4 weeks for EP) we expect this to be a total process of 2 months. In this we have factored in one additional information request from MOM.

  1. Incorporation and EP filing (1 week)
  2. EP processing (3-4 weeks)
  3. Additional info request and subsequent time (3 weeks)

Is the employment pass approval guaranteed?

The ministry of manpower Singapore decides approval of employment pass. Nobody can guarantee approval. However, we can take steps to improve the chances of a successful outcome.

Must my company show a specific amount of profit or success?

There is no specific obligation to show a specific amount of profit or success in your company. Many startups in first few years in fact may make loss. So long as company is engaged in genuine economic activity its ok.

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