The sovereign city-state of Singapore is home to many industries that could use skilled international contractors that wish to live and work there. The cost of living can be high, but compensation is as well, so it is feasible for the right role.
As you search for new clients in Singapore, you will want to be familiar with the visa rules and get paid and remain compliant as a contractor. This guide will give you the information to get started while contracting in Singapore, and ways to use third-party experts for support.
What visas do I need to be a contractor in Singapore?
There is no self-employment work permit in Singapore, and unless you want to start your own limited company you will need an employee work permit. This means that your client would have to hire you, sponsor your visa, and you could work for them only.
Most professional contractors would meet the ‘S’ Pass criteria, which requires a minimum salary of SGC $2400 per month. An Employment Pass visa requires a $4500 monthly salary, plus significant education and experience. In addition to the salary limits, employers have quotas imposed limiting the number of employment visas they can sponsor each year.
How do I get paid as a contractor in Singapore?
How you get paid as a contractor will depend on your visa status and experience with contracting.
Work as a self-employed freelancer
You may have been used to working as a freelancer in other countries, but that is going to be more difficult in Singapore. Most likely, you will have to become an employee of your client so they can sponsor your work visa. But then you will also be eligible for employee benefits in Singapore.
Set up your own limited company
Experienced contractors with a long-term commitment to Singapore can set up a limited company to handle contracting with clients. The company will require at least one Singaporean director, so it won’t be completely independent. Clients will contract directly with the limited company for your services.
Work with an umbrella company in Singapore
Another option is to work with an umbrella company in Singapore, which can assist you with visa sponsorship and tax withholding. The umbrella company would collect payment from the client, and after confirming project completion will issue you a payslip.
How do taxes work for contractors in Singapore?
Like all countries, Singapore has its unique tax system, and most contractors will be paying individual not corporate taxes.
Tax residency rule in Singapore
Singapore uses the 183-day rule, and any stays beyond that will result in tax residency. This becomes important for the applicable tax rates for residents and non-residents. Unlike other countries, tax residents don’t pay tax on worldwide income unless it is paid into Singapore.
Tax rates
The progressive income tax rate is 0-22% for residents and 15% for non-residents (no personal allowances) or the resident rate whichever results in higher taxes.
How to file taxes in Singapore
The IRAS website has detailed instructions on how to file your taxes in Singapore.
Do I Need to File Taxes?
You must file an Income Tax Return if you receive a letter, form or an SMS from IRAS informing you to do so. You are not required to file an Income Tax Return if you have received a Non-Filing Service (NFS) Letter. If your employer is participating in the Auto-Inclusion Scheme (AIS), you do not need to report income received from this employer (but you may still be required to file a tax return). Your employer will submit your employment income information to IRAS by 1 March.
Step 1: Obtain a SingPass or IRAS PIN
SingPass is a password you can use to access all Government e-Services. You can apply for one here and should receive it within 4 working days. To be eligible for SingPass, you must be one of the following:
- A Singapore citizen
- A permanent resident
- A pass-holder (Employment Pass, EntrePass, S-Pass, Dependent Pass, Long Term Visit Pass Plus)
- A selected work permit-holder
- Alternatively, you may apply for an IRAS PIN here. You should also receive it within 4 working days.
Step 2: Prepare Documents
Make sure you have these documents and information ready, before logging onto the myTax Portal:
- SingPass / IRAS PIN
- Form IR8A (if your employer is not participating in the Auto-Inclusion Scheme)
- Particulars of your dependents (e.g. child, parent) for new relief claims
- Details of rental income from your property and other income, if any
- Business Registration Number / Partnership Tax Reference Number (for self-employed and partners only)
Step 3: Log in to myTax Portal
Log in to myTax Portal with your SingPass / IRAS PIN. Click on “Individuals” > “File Form B/B1” to start. The form will take about 5-10 minutes to complete. Your session expires if you leave it idle for more than 20 minutes.
Step 4: Verify Existing Details
IRAS will pre-fill the following information for you in the online tax form:
Income, deductions and reliefs from organisations participating in the Auto-Inclusion Scheme e.g. employment income:
- Reliefs claimed by you in the previous year e.g. Qualifying Child Relief, Foreign Maid Levy Relief; and
- Tenanted property information based on the preceding year’s tax declaration and/or e-Stamping records.
- Check that all pre-filled information is accurate and complete. Please contact the relevant organisation directly if there are any discrepancies. The organisation will resubmit the information to IRAS if there are errors in the original submission.
Step 5: Update Existing Tax Reliefs
If you have previously claimed any reliefs but no longer qualify for them, please remove the pre-filled sections when you e-File. You can make amendments.
If you qualify for additional or new reliefs, please include them when you e-File.
Step 6: Declare Other Income Sources
If you have received any other sources of income that are not prefilled (e.g. rental income in the previous year), you need to declare the income in the tax form.
Step 7: Receive Acknowledgement Receipt
An acknowledgement page will be shown after you have e-Filed successfully. Save a copy or print the page for future reference.
Your Notice of Assessment (NOA) or tax bill will be sent to you between the end of April and September. If you have income that is not shown in the NOA or your relief claims in the NOA are incorrect, please inform IRAS within 30 days from the date of your NOA.
For more detailed information, check out the following links on the IRAS website:
What are the social security contributions in Singapore?
Central Provident Fund (CPF) is the national pension scheme, but no contributions are required by foreign nationals or their employer unless they are permanent residents. A voluntary Supplementary Retirement Scheme is available to foreigners, and contributions are capped at 35% of salary (employer and employee contributions combined).
Can I work remotely for a company in Singapore from my home country?
With all the visa requirements you might consider working remotely from your home country for a client in Singapore. This saves you the cost of living in Singapore and your client won’t need to sponsor a visa for you. You would arrange a cross-border method of payment and could also use an umbrella company in your own country to facilitate.
How do I stay compliant while contracting in Singapore?
As a foreign contractor, you will be concerned about compliance with Singapore law and regulations, as you are working and living within its borders. Your primary compliance risks are:
- Meeting tax and social contribution requirements
- Business registration for limited companies
- Work permit validity and sponsorship
That is a lot to overcome, especially for new contractors, and you might need the help of an umbrella company to take over many of these tasks. Contractor Taxation has licensed, verified umbrella companies in Singapore who are ready to assist you with setting up your contract and making sure that your payments are secure. Here are some of the benefits of using an umbrella company:
- Handles all client payments, tax withholding and any social contributions
- Issues you a payslip each month, to a local or foreign account
- Can sponsor work permits
- Helps set up the contract with the client
- Moderates any disputes with your client
- Advises on access to totalization and double taxation treaties
Unless you are prepared to handle all of this on your own, you may find that an umbrella company is a valuable partner in Singapore as you embark on your contracting journey in a new country. Please contact Contractor Taxation with your questions about how an umbrella company can work for you.
