You’re in Singapore under Employment Pass and time has come to open your own business. Congratulations! Here’s what you need to do.
Can I incorporate if I have an Employment Pass?
Sure. There are two options: you can be only a shareholder in your company if you don’t want to change your status. You can’t have another official role in your company in this case.
Or you can be a director. For that, you need to get a new Employment Pass (EP) issued per your new company. It’s best if you are not a shareholder in this scenario to ensure receiving an EP. You’ll have to leave your current employer, too.
Can I become a resident director myself?
You don’t have to, but it might be cheaper. Singapore law requires each company to have one resident director. There are three ways to go:
- Invite someone you know to be a local director.
- Hire a Nominee Director, it’ll cost you S$1,800 - S$2,500 a year (many agencies also charge a refundable deposit of S$2,000 which we’ll explain below).
- Apply for EP and become one yourself. It usually takes 3-6 months, so you’ll still need the nominee service while you’re waiting.
Who is a nominee director?
A Nominee formally holds director’s position, without any actual decision-making powers or authority to run the company. He is a company officer on paper, necessary to meet the requirements of the law. When you hire a Nominee, many agencies ask you to place a refundable deposit of S$2,000. It works as insurance for the nominee, you get it back when his contract expires.
Can I keep my old Employment Pass and still become a director?
Only if your current company is affiliated with the new one. Then the Ministry of Manpower can issue a special approval. If not, you will have to apply for a new Employment Pass.
Can I transfer my Employment Pass to my new company?
No, EPs are issued per one specific company. You can only work for the employer that sponsors your visa. So after you’ve incorporated, your new business has to apply for your new Employment Pass. Do it seamlessly: there’s no need to cancel your old EP before you secure the approval of a new one.
What do I need to start a business?
You need a local address, a corporate secretary, and a resident director. Remember, existing Employment Pass does not qualify you to be a resident director, so invite a local, or hire a nominee.
What does the incorporation process look like?
Usually incorporation is handled by an agency which also provides you with necessary services such as corporate secretary, nominee director or local address. They will fill in an application and submit it to ACRA (Accounting and Corporate Regulatory Authority). The application contains your passport details, company name, resident or nominee director data, corporate secretary details, all your shareholders, and local address. Normally an application can be confirmed within minutes.
How much does it cost to open a company in Singapore?
The expenses include incorporation, government fees and the first year of necessary services – corporate secretary, local address, nominee director and a deposit. The total depends on whether you apply for a new EP or not. Here are the two options:
|You want to be a shareholder only, not a director, and you don't apply for an EP
You'll need a nominee director all the time
|You want to be a director, and you apply for an EP
Hire a nominee for 3–6 months while waiting for an EP
|+ S$2,000 refundable deposit||+ S$2,000 refundable deposit that you get back once your visa is ready
+ S$6,000 monthly salary you pay yourself to qualify for EP
|If you have a resident director||If you have a resident director|
This article was written by experts at Osome – online Incorporation, Secretary, and Accounting in Singapore. We help entrepreneurs to start and run business and get Employment Passes. We respond fast 24/7 in a secure chat. Learn more and get a free consultation on our site.