The Different Work Passes In Singapore

Singapore attracts companies from all over the world to set up shop on its shores. Inevitably, the nation sees experienced professionals continually arriving and add value to its economy. Concurrently, the service industry grows to support these companies and professionals. With people of all levels of skills arriving in Singapore, there has to be a way to manage their stay in the country. To this end, the Ministry of Manpower has in place a set of work passes catered to the different classes of foreign labour in Singapore.

Probably the most commonly-encountered pass encountered in the corporate environment, the Employment Pass (EP) is the document that is issued to foreign professionals and executives who work in Singapore. Most of the workers in the banking industry and the IT industry belong to this category. An EP is issued to a professional who already has a job offer in a managerial or executive position. Such a professional is expected to possess a good degree from a generally-recognised university or a professional qualification. He or she is also required draw a monthly salary is $3,300 (raised to $3,600 from 1 January 2017). It should be noted that the Ministry does not only consider paper qualifications in its evaluation. Someone who does not possess the necessary qualifications may not necessarily be rejected; the Ministry will also consider his or her skills and other factors.

Another pass that is catered to the professionals is the Entrepass. This pass is meant for people who wish to start companies in Singapore. The Entrepass is valid for one year only and there is a set of criteria that must be met. The applicant must have started or intend to start a Private Limited company with the Accounting and Corporate Regulatory Authority (ACRA). This company must have a minimum of $50,000 in paid-up capital and must be at least 30% owned by the applicant. The applicant must also be able to demonstrate to the Singapore government that he or she is a recipient of funding or investment from a recognised venture capitalist (VC), holds an intellectual property (IP) that is registered with an approved national IP institution, is involved in research with the Agency for Science, Technology and Research (A*STAR) or a Singapore-based university, or is part of an incubation programme supported by the Singapore government. Whichever criteria the application is able to satisfy, he or she must also ensure that the IP, the research or the incubatee work must be related to the business.

Away from the realms of the professional workers, there are several work passes that cater to the semi-skilled workers. The ones that are associated with businesses are the S Pass and the Work Permit. The S Pass is issued to semi-skilled workers who find jobs in the technical fields and earn a minimum wage of $2,200 a month. Such workers are normally technicians in a manufacturing environment. While the Ministry mandates that these workers should have a degree or a diploma, it is prepared to consider applicants with lower qualifications but who possess certificates relevant to the fields in which they are working. The criteria of such certification should include at least a year of full-time study. One final consideration for the issuance of the S Pass is the number of years of experience in the industry. Ideally, they should have worked for a minimum of one or two years before applying.

The final tier of work passes is the Work Permit (WP). The WP is generally meant for unskilled workers who hail from certain approved countries. It caters to such diverse industries as construction, manufacturing, marine, process and services. The requirements for the issuance of the Work Permit varies between the industries, however, all employers are subject to a set of common requirements like the need for a security bond, medical insurance and medical examination, as well as housing requirements. While it may seem a herculean task to fulfill these requirements, they are necessary to ensure that the foreign unskilled workers are adequately taken care of and are able to work in their respective positions safely and productively.

The Singapore government, through the Ministry of Manpower, has in place a comprehensive set of work passes and associated requirements that cover the foreign workers who contribute to the economy. This system ensures that Singapore’s business landscape remains vibrant and inviting to companies.

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Virtual Offices – The Preferred Route For Startups

The desire to be one’s own boss. Financial freedom. The urge to pursue one’s passion. Whatever the motivation, more people are turning to entrepreneurship than before. According to figures from the Accounting & Corporate Regulatory Authority (ACRA), between 4,661 and 6,369 business entities were set up every month between January and June 2016. While getting excited about potentially making it big in the world of business, budding entrepreneurs will have to plan their steps carefully. One of the early considerations is obtaining a registered address for the business.

ACRA mandates that any legal entity that is registered with it must carry a registered address. Unless the business has received investor funding and is ready to rent an office or a warehouse, the owner of a startup typically works from home. This leaves one without a ready business address, and will have to source for something that can be used. There are several considerations in choosing a registered address. While anyone is free to use a home address as a business address, it may not be the best choice. Image is important to a business and nothing can be worse than having a residential address show up on a professionally-designed business card or a corporate website that is accessible by prospective clients and partners around the globe.

Even if the address is not displayed on marketing material, potential investors might be put off by a residential address when they search for the startup’s publicly-available business profile on ACRA’s BizFile website. Starting a business is never easy and it would help matters if the business came with a professional business address. For a small fee, a startup could consider using the virtual office service of a professional accounting firm. All mail destined for the business arrives at the firm’s office for self-collection. For the business owner’s convenience, there is an option of having the service provider forward the mail to his or her actual home address. Engaging such services not only gives the business owner a prestigious address to work with, it also accords the entrepreneur privacy. It prevents the home address from being publicized, and attracting potential spam mail.

A virtual office address serves not only local startups but also foreign companies that maintain only a small presence in Singapore. A company that is involved in trading may base itself in Singapore, with just a country manager taking care of the sales and administration, while the actual movement of goods takes place elsewhere in the region. The same scenario applies for a manufacturing firm dealing with low-value goods, where siting the factories in neighbouring countries to leverage the lower cost of goods and labour makes perfect business sense. A virtual office service may also prove useful to a foreign firm that is exploring the prospect of doing business in Singapore. While it registers a representative office with ACRA and conducts market research and feasibility studies, subscribing to a virtual office address helps keep costs low, freeing up funds for more critical groundwork.

The advantages of using a virtual office are many. A virtual address has helped many startups bloom into larger companies and will continue to do the same for years to come.

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Different Ways Foreign Companies Can Set Up Shop In Singapore

Singapore consistently ranks as one of the best places in the world to do business in. A stable political environment, an advanced transport infrastructure and a sound financial system all serve to make this island state an attractive place for business. Consequently, it has managed to pull foreign direct investments (FDI) from multinational firms looking to grow in the Asia Pacific region. Indeed, a walk in downtown Singapore reveals many foreign names in the food and beverage (F&B) trade, the financial services industry and the music scene. Similarly, a drive through the industrial regions brings one past factories and warehouses operated by foreign firms, whether they are companies dealing in construction equipment or big names in the pharmaceutical world. Some companies are even housed in properties managed by foreign-owned real estate investment trusts (REITs).

With Singapore being such an attractive investment destination, there certainly has to be ways in which companies settle in the country and start operations. To this end, the Accounting & Corporate Regulatory Authority (ACRA), Singapore’s regulator in the business environment, has three distinct ways in which foreign companies may operate in Singapore. Each offers a unique structure that is suited for companies in different circumstances.

Probably the most popular way to set foot in Singapore is to register a subsidiary company. A subsidiary company is a Private Limited company that is incorporated locally and majority-owned by a foreign company. As a subsidiary company is a legal entity in the eyes of the law in Singapore, it is bound by the Companies Act, requiring it to adhere to the same regulations that bind other such companies. It has to appoint a company secretary within six months of incorporation and conduct its first annual general meeting (AGM) within 18 months. However, even though it is owned by a foreign company, it is treated as a separate legal entity in Singapore. As such, liabilities of this company are not extended to the parent company. Since it is a local entity, the company is treated as a resident local company and is eligible for tax incentives granted by the Singapore government.

Another way in which a foreign company may conduct its business here is to set up a local Branch office. A branch office, like a subsidiary company, is also a legal entity, but it is treated as an extension of the parent company. The branch office must carry the same name as the parent company, unless there is a conflict with an existing Singapore company. As a Branch office is viewed as a non-resident company, it is not accorded the same benefits as a subsidiary company. It does not enjoy tax incentives and any liabilities incurred in Singapore have to be borne by the parent company. Consequently, a branch office is a less attractive option for many foreign companies.

A foreign company that is exploring Singapore as a possible business location and is not ready to fully commit its resources may choose to set up a representative office. A representative office is a temporary setup without a legal status. Unlike its aforementioned counterparts, a representative office is not allowed to conduct commercial activities like perform profit-oriented transactions, raise invoices, obtain letters of credit and lease a warehouse. It may, however, conduct market research and feasibility studies on behalf of its parent company. It may, for the purpose of determining the suitability of Singapore as a business location, hire up to five employees. A representative office must be renewed on an annual basis with ACRA and may exist for up to three years. Thereafter, it must upgrade to a subsidiary company or a branch office, or cease operations.

A foreign company should carefully consider its intention of setting up its presence in Singapore and explore the best option with which to achieve it. Choosing the right route will ensure that it puts its best foot forward in what may be the start of a long-lasting business relationship with the Asia Pacific region.

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Leave Company Incorporation To The Experts

Singapore has consistently been described as one of the best places to do business in. With the proliferation of the Internet and easy access to information, more people than before are entering the world of business. It helps that more young people are gaining the entrepreneurial mindset today. According to records from the Accounting & Corporate Regulatory Authority (ACRA), between 4,661 and 6,369 business entities were set up every month between January and June 2016. While the Singapore government makes it easy for aspiring business owners to set up legal corporate entities themselves, it pays to plan carefully. This is especially important when dealing with Private Limited companies, where the legal obligations on the part of company owners are much more complex than those of sole proprietors and partners.

It is very easy for anyone to set up a Private Limited company on BizFile, ACRA’s one-stop business portal for business owners and the public. Provided the name chosen for the company does not contravene rules set by the government and the aspiring owner has all the company and personal details on hand, a company can be set up within an hour on BizFile. It costs only $15 to register a company name and $300 to incorporate the company. Technology has made this initial setup process hassle-free, seamless and simple. What many people do not realise is that while it is extremely easy to jump onto the business bandwagon, it is also extremely easy to land into trouble when legal obligations come their way later.

ACRA has statutory obligations in place that require companies to meet. The Singapore Companies Act mandates that every company has to appoint at least one local Company Secretary within six months of incorporation. It also has to hold its first Annual General Meeting (AGM) within 18 months. While these requirements sound straightforward, fulfilling them might not be so. When a business owner is busy running the day-to-day affairs of the business, it is easy to overlook such legal aspects. This is especially true for a new business owner working alone. When the business is new and the owner Whis the sole Director, salesperson, marketer and operations person, many things will appear to overwhelm him or her. When one is chasing sales to meet month-end closing, the last thing that one wants to worry about is conducting an AGM. Sadly, if legal obligations are not fulfilled, penalties may be imposed on the business.

Conducting an AGM is more than just sitting down and reminiscing about the company’s activities in the past year. Someone will have to prepare the meeting agenda, the meeting will have to follow a structured format and minutes will have to be taken. Eventually, a report will have to be produced and circulated to the shareholders. An AGM is a serious affair that will be set in stone in the annals of the company. There are other matters that new business owners will have to worry about too, like establishing and maintaining statutory registers and filing changes within the company with ACRA. It would help the business owners greatly if such specific tasks like transferring and issuing of shares, appointments and resignation of officers and even the changes in the Memorandum of Articles and Association (MA&A), were recorded by a company dedicated to these tasks.

It makes good business sense to leave such administrative tasks to an outsourced company secretarial services provider. Doing so offloads the legal burden from the business owners, ensures they do not miss any statutory deadlines and allows them to focus on growing the company. In the long term, this ensures the growth, profitability and sustainability of the company.

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GST Claim Procedure For Eligible Companies

The Goods & Services Tax (GST) was implemented in Singapore on 1 April 1994. Similar to the Value Added Tax (VAT) in other countries, the GST is a tax levied on domestic consumption of goods and services. It is intended as a means to allow the government to collect revenue while keeping income taxes affordable for the general population. At 7%, Singapore’s GST rate is one of the lowest in the world. Businesses that have annual turnovers in excess of $1 million have to collect GST on the sale of their products and services. As they are collection agents acting on behalf of the government, they have up to a month after their quarterly tax filings to transfer the tax money collected to the Inland Revenue Authority of Singapore (IRAS).

Businesses, like consumers, have to pay taxes on the purchases of goods and services, if the vendors are GST-registered entities. Unlike consumers, however, businesses are able to claim the taxes paid in the purchase of such taxable supplies. While consumers are always the last parties in the tax chain and therefore have to absorb GST in their purchases, businesses are not and they are in a position to produce taxable goods and services for other businesses and the eventual consumers. Provided they satisfy conditions set by IRAS, businesses can claim GST incurred in their purchases, known as input tax.

A company is able to claim input tax incurred in its purchases, as the purchases made will contribute to the production of taxable supplies for their customers. An importer of iron ore, for example, is able to claim the input tax incurred in the import of this raw material, as it will sell the products to steel manufacturers, who will pay GST for their purchases. Likewise, an ice cream chain that pays GST to its supplier of flour and eggs will be able to claim the taxes paid to it, because it produces ice cream that attract GST for its retail customers.

IRAS allows input tax claims for the purchase of non-residential properties too. A company that acquires commercial and industrial property is able to claim input tax, because the property will be used in the production of taxable goods and supplies. When a food manufacturer pays a property developer GST for the purchase of a strata-titled food factory, the food factory will be used to manufacture processed food that will find its way to supermarket shelves. As the manufacturer collects GST from the supermarkets and this tax will be paid to IRAS, the tax incurred in the initial property purchase can be claimed. IRAS also allows the claiming of GST incurred in property conveyancing, as well as other professional services like property valuation. Although realtors encourage business owners and investors to incorporate companies and have them GST-registered when they purchase commercial and industrial properties, IRAS has guidelines in place to ensure that the system of input tax claims is not abused. Among other things, they ensure that individuals do not claim GST for the sole purpose of costs savings.

Each company registered with the Accounting & Corporate Regulatory Authority (ACRA) has a prescribed accounting period. This is usually a quarter that ends on 31 March, 30 June, 30 September or 31 December. At the end of the accounting period, the company submits the GST tax return to IRAS. They submit the figures for output tax (tax collected for the sale of goods and services) and input tax. In the example of the iron ore importer, it will have paid input tax to Singapore Customs (IRAS’s tax collection agent) and collected output tax from the steel manufacturers. The ice cream chain will have paid input tax to the food distributor and collected output tax from the consumers. As for the food manufacturer, the input tax will have been paid to the property developer and output tax will have been collected from the supermarkets. During the collection of taxes by all commercial vendors, a tax invoice is provided in place of an invoice or receipt, which are used only when the vendors are non-GST-registered. However, in the case of tax collection by Singapore Customs, the tax is accounted for in the import permit.

In all cases, the companies claiming input tax must ensure that their basis of claiming input tax on the date of posting the suppliers’ tax invoices or import permits into their accounting systems is applied consistently for all their GST returns. In addition, they have to ensure that they have the original tax invoices or import permits at the point of claiming, and that they have internal controls in place to prevent double-claiming of input tax. Needless to say, the claimants can only claim input taxes incurred during the associated accounting periods. This is the reason companies should invest in the services of a professional accounting firm. A responsible outsourced accounting firm will ensure the correct matching of tax invoices or import permits with the correct accounting periods so that customers do not miss their GST refunds.

With a sound tax regime in place and with all companies playing their part in the marketplace, the companies and economy will only continue to grow.

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