To get setup as a contractor in Singapore can involve alot of administration unless you use an umbrella company. Without them you'll spend days reading government documents, filling in forms, chasing progress and tracking your taxes. Wouldn't it be better to spend that time earning money and looking for new clients? Rather than think about how much will I pay using umbrella companies in Singapore” (FYI no more than 5%) why not look at how much more money you will make from paying less tax and doing less admin.
Singaporean umbrella companies are suitable for contractors in most industries including IT, Oil and Gas, Engineering, Finance and Telecommunications. In this article we'll give a bit more background to umbrella companies and the potential benefits they provide. We'll also explain how you can get help picking the best umbrella company for you.
Understanding Umbrella Companies
Umbrella companies are setup to handle payments for contractors or outsourced employees. They handle all the paperwork (invoicing, payslips, reporting, tax returns), calculate & pay taxes, make payments to the "employee" and assist with tax returns. They will be appropriately registered and insured for most industries and roles. They can sponsor skilled foreign workers for Employment Passes. From dealing with many foreign contractors they also have expertise in expatriate taxation. Often they will offer preferential rates or assistance with supplementary services like health insurance or mortgages. Technically they act as the employer - but they have no control over the employee. Put it all together and you have a company designed to make contracting easier.
All you have to do is focus on your job and client. Although you are a totally independent contractor, the umbrella company now becomes your "employer". They receive payments from your end clients, deduct taxes and other fees and then pay the rest to you. The umbrella company will ensure that you comply with all legalities in Singapore.
Umbrella Company Benefits
You'll pay less tax. Which means you'll earn more! Umbrella companies are experts in the Singapore tax system, especially as it relates to non-residents. So not only will you get more from your salary but you can relax in the knowledge you've complied with all rules and regulations.
You can get sponsored. Having your work permit with an umbrella company gives you the flexibility to work with clients inside and outside Singapore, change contracts, take a sabbatical and more whilst still maintaining your permit.
You'll do less admin. Picture the process. You finish your period of work and submit your timesheet. Behind the scenes they generate the invoice, chase payment, calculate the taxes and all deductions, pay you the rest, send you a payslip, pay the taxes and submit all annual and quarterly reporting.
You'll stay up to date. It is one thing to understand all the rules now when you get setup. But do you really want to keep on top of it every year? Why not leave that responsibility to the compliance department of your umbrella company?
Your Umbrella Company Guide
All umbrella companies aren't created equal. They differ on cost, services and reliability. Given their involvement in your finances and visa status it is crucial to pick the right company. You need a company that meets all your criteria and that you feel comfortable with. We can guide you through the options and help draw up a shortlist of umbrella companies that can assist you. We can recommend the best umbrella companies in Singapore and then you can make your choice. Our advice is absolutely free.