Being an IT contractor in Singapore is appealing due to the job opportunities, quality of life, and attractive tax rates. However, to make the most of it, you’ll need a strategy for handling the numerous admin responsibilities.
Going it alone: figuring out your visa and taxes
You can get pay your taxes and get a visa for IT contracting in Singapore by yourself. Using a Personalised Employment Pass is one path - provided you’ll be working for a Singapore-based company and can show your last monthly salary payment was at least SGD 18,000. You'll need to earn at least SGD 140,000 per year and never be out of work longer than 6 months. You must also advise the Singapore Ministry of Migration of any changes to your status. The PEP limits any chances to reduce your tax.
Using an intermediary: benefits of working with an Umbrella Company
Many contractors outsource burdensome admin tasks to an Umbrella Company.
The Umbrella Company essentially acts as your employer, even though they don’t control your clients, your workload, or your hours. They collect payments from the end client, filter out the necessary social security and other fees, and send you a net wage.
Additionally, they can sponsor contractors for an Employment Pass. This means you’re working under a single permit, instead of constantly applying for a new one (or having to turn down clients who can’t sponsor you). You can find out more info on permits and visas in this FAQ.
They’re also experts in local tax law, so you don’t have to navigate a whole new tax system on your own. They ensure you keep the largest amount of earnings as you legally can. They can also help you reduce any tax liability back home.
You keep more of your earnings, all while staying on the right side of tax authorities in Singapore and in your country of tax residency.
Basically: you get all of the benefits of a full-time employer, without giving up any of your independence as a freelance worker.
Get in touch with us if you’d like simple feedback on IT contracting in Singapore.