Singapore has a range of work permits available for foreigners depending on their situation ranging from the standard sponsored Employment Pass through to visas just for Entreprenuers. It is straightforward for skilled permanent employees of a Singaporean company to get a working visa. For contractors the options have been simple by recent legislative changes: if you are contracting for Singaporean companies then you can potentially get a Personalised Employment Pass otherwise you'll need a local company to sponsor you. Contracting for foreign companies, freelancing with multiple clients or having an annual declared income below SGD 140,000 will require sponsorship through a Singapore umbrella company.
The equivalent of a highly skilled work permit. There are 3 classes:
- P1 (salary of at least SGD 8000 per month)
- P2 (salary of at least SGD 4500 per month)
- Q1 (Graduate from certain institutions earning at least SGD 3000 per month)
The requirements: A Singaporean company must sponsor the visa, the minimum salary is at least SGD 3000 per month, and the person must hold appropriate qualifications. If you earn a monthly salary of at least SGD 4000 per month your dependants can also join you. Note that if your employer is not based in Singapore then you can still qualify for an Employment Pass by using a local Singapore registered company as the sponsor.
This suits contractors who will be working for Singaporean based companies. It runs for 3 years and you can bring your spouse and dependants. You also get 6 months to get settled and find a job on arrival. You need to show your last monthly salary was at least SGD 18,000, and draw a salary of at least SGD 144,000 whilst in Singapore. It doesn't suit entreprenuers because you aren't allowed to be a director of a singaporean company or work on a free-lance basis without a direct client in Singapore. You must keep the Ministry of Migration informed of any changes in employment and you cannot be unemployed for more than 6 months at any point.
This is suited to entreprenuers who wish to start a business in Singapore. Your company must less than 6 months old, be registered in Singapore and have at least SGD 50,000 in paid up capital. You must hold at least 30% of the shares. There are also restrictions on the type of business which qualifies.
This is similar to the Employment Pass but aimed at lower skilled workers. There are stricter criteria in terms of role, skills, experience and salary. Employers also have a cap on how many of their staff can be S Pass holders (normally 20%). The employer must pay each S Pass holder a salary of at least SGD 2,200 per month. Only S pass holders who earn more than SGD 4000 per month can bring their dependants into Singapore.
What is a Singaporean Umbrella Company?
Singaporean Umbrella Companies are third party employers. They can “employ” contractors although this is merely a technicality. The contractor still controls all aspects of their career and day-to-day work. The umbrella company will ensure compliance with the relevant employment, immigration and taxation legislation. They will review your contracts to make sure they are compliant and advise on how to best structure your earnings. They also handle the administration related to invoicing and getting paid.
By acting as the employer, the umbrella company is able to sponsor an Employment Pass or S Pass. This has the added benefit of meaning you don't need to deal with visa transfers or advising the Ministry of Migration whenever you take a new contract - because your sponsoring employer is always the umbrella company. Part of their service is to make sure they meet all the government requirements to sponsor foreign workers and advise their contractors of any potential changes to migration policy. So you won't have any unpleasant suprises from work permit changes sneaking up on you.
Can Umbrella Companies Also Assist You with Singapore Taxation?
This is actually the primary function of an umbrella company - to offer contractors the highest possible net retention on their earnings. They know all the rules and tricks to maintain your tax residency in the most beneficial way. Additionally they can structure your salary to incorporate your personal services and maximise any allowable deductions. They will also prepare and file your tax return. Lastly they can also advise on any issues related to tax in your home country and whether you are affected by dual tax agreements. What could be better? Your main responsibility is just to send in your timesheets and enjoy your time in Singapore.