We’ll focus on the whys here and leave the elaboration in our article comparing different types on company structure.
First, let’s establish that a private company limited by shares is the way to go. If this is your first business, you can get straight to registering the company.
A quick overview on the requirements to set up a company in Singapore as a foreigner:
- At least one local resident director who is a Singapore citizen, a Singapore permanent resident, or an EntrePass/Employment Pass/ Dependent’s Pass’s holder with LOC.
- At least one Shareholder
- S$1 paid-up capital
- A physical local address
- A company secretary
After you register a company in Singapore as a foreigner, you will need to get the right visa to live in Singapore and run your business.
There will always be a debate over an EP or EntrePass for foreign business owners. We are advocates of the Employment Pass. Why?
1. Higher application success rate
A qualified individual for EP should have a tertiary or degree certification and a minimum monthly salary of S$4,500. This will be increased in September 2022 to S$5,000.
An EntrePass candidate is intended for serial entrepreneurs, high-calibre innovators or experienced investors whose business in Singapore that is venture-backed or owns innovative technologies. In comparison, the EntrePass is daunting.
2. EP is family friendly
If you’re bringing spouse or kids in, they can apply for dependent passes attached to your EP. The qualifying salary for the EP holder is S$6,000. However, if you’re on an EntrePass, you need a total annual business spending of S$100,000 and meet local employment requirements.
3. No specific requirement for renewal
The renewal of an EP is subjective by nature. The Ministry of Manpower (MOM) looks at the company’s need for the EP holder and their capabilities of engaging him/her for another period.
The EntrePass is has a progressive renewal criteria framework. By the 2nd year, you should plan to hire at least 3 full-time employees (FTE) or 1 local professional, manager or executive (PME). Your total annual business spending by then must be at least S$100,000.