Year-round summer weather, amazing food and night scene—you can enjoy all this and more in stunning Singapore. The country is ripe for business opportunities, and could be the perfect spot for you to relocate and set up a company. Living a rewarding and fulfilling life here doesn’t even need to be complicated or confusing. In this post, we are going to explore what you need to know about:
- How to incorporate a business in Singapore, including the nominee director requirements
- Vital information on the employment pass application and process
- The key to a 90% success rate in your employment pass application being approved
- What is next after you've set up your company and received your employment pass
There are many steps and costs involved with incorporating your business in Singapore and successfully receiving an Employment Pass. Following these steps will make it easier for you to incorporate your company, apply for an Employment Pass, and be approved.
Business Incorporation in Singapore
There are some basic requirements for setting up a company as a foreigner. Your company must first incorporate your business with a resident nominee director (temporarily) until your employment pass is approved.The requirements to relocate or create your company in Singapore include each of the following:
- Company Secretary
- Local Registered Address
- Shareholders (corporate entities or individuals)
- Nominee Director (local resident)
- Minimum S$1 paid-up capital (see the section about Employment Pass salary requirements) We recommend at least S$50,000 paid-up capital for businessmen applying for an employment pass though!
Your shareholders can be fully foreign, fully local, or a combination of those options, remember, a director can be included in your shareholders.The standard business entity setup for Singapore is a Private Limited (Pte Ltd) company. Private Limited companies are the most common and more preferred type of business form in Singapore. The company can have 1 to 50 shareholders and the business in itself is a legal entity, which means any liabilities the business might incur would fall on the business entity in name rather than that of the shareholders.
Additionally, there are many tax benefits given to private limited companies, making them a popular choice for entrepreneurs.The nominee director must be a resident of Singapore. Once your employment pass is processed, the Singapore director position can pass onto you as the company director.In order to incorporate your company, you need to:
- Register the company name
- File the incorporation with the Accounting and Corporate Regulatory Authority (ACRA)
Employment Pass Application
The Employment Pass process has many nuances but can be navigated with some preparation and is open to all nationalities. First, let's review eligibility requirements. To qualify, you must:
- Have a job offer in Singapore (incorporating your company in Singapore) The offer (your role in the company) must be a - managerial, executive, or specialised job
- Effective 1 September 2020, fixed monthly salary starting at $4,500 (more on this in the next section)
- Acceptable qualifications: suitable degree from an accredited university, professional qualifications or specialised skills
You may be wondering if you're very experienced or over 40, if the monthly salary of $4,500 is enough. The Employment Pass qualifications are different for older candidates and for those in the financial services sector. Applicants within the financial services sector’s minimum salary was raised to $5,000 for new applications as of 1 December 2020. Older and more experienced candidates require double the minimum qualification salary. The salary requirement also varies for applicants of different nationalities.
Take advantage of the free Self-Assessment Tool to help you ascertain if you meet the requirements to apply for an Employment Pass. The Ministry of Manpower (MOM) website explains that if the SAT shows you as ineligible, it is likely that you may be rejected if you choose to apply. However, if the SAT shows that you're eligible for an Employment Pass, "there is around a 90% chance that the candidate will get a pass".While MOM doesn't list all the approved institutions for an appropriate degree, it's possible to check if your college or university fits the requirement. Check for the accreditation status using:
- Verification agencies: Dataflow or Risk Management Intelligence (RMI)
- International accreditation bodies
- The educational authorities in the country of the institution
Every application is reviewed carefully. In most circumstances, it takes around three weeks to process the employment pass. However, sometimes, the processing time for employment pass can be longer depending on your application.The final decision is based on merit, salary, track records, work experience, skillsets, and the candidate's native countries' institution rankings.Don't forget, start with the Self-Assessment Tool. Even if you don't currently qualify, for example, because of salary, making some improvements in the relevant areas increases your chance of success.
What's Next?
You've registered your company with your nominee director, physical Singapore address, and met the other incorporation requirements. The company secretary stays in place for 1 year. Your resident nominee director is in place for about 3 months while your employment pass is in process. The registered office address remains the same for a year.When your company is incorporated in Singapore, you'll receive the Company’s Constitution (Memorandum and Association of the Company) from ACRA plus a company business profile (Bizfile). These 2 documents prove that your company is incorporated in Singapore.
What about family? The good news is that an employment pass includes options for dependant passes and long-term visit passes for family members (common-law spouse, unmarried handicapped children over 21, unmarried step-children under 21, and parents). The minimum salary requirement for these extra passes is at least $6,000 fixed monthly income or if bringing in parents, the minimum salary is at least $12,000).With the initial process of setting up your company in Singapore and arranging our employment pass over about 3 months, you'll be relocating your company and your family to idyllic Singapore and enjoying those refreshing swims before you know it.
Sprout can help!
The employment pass is a fantastic way to enter Singapore. Although there are many requirements, you will also enjoy many perks and benefits of working in Singapore.
At Sprout, we can help foreigners who are looking to start a business in Singapore from incorporation all the way to applying for an employment pass, dependant’s passes and even matters to do with your company's finances after! We will be there with you at every step of the process. Contact us now to kick start the process.