7 Jul 2020, Rennie S.
Singapore has a solid track record of growth and opportunity. This is demonstrated by its stable government, fair and transparent judicial and ease of business administration. Singapore is a young nation and is advantageously located at the East meets West trade crossroads via air and sea routes. With its low taxation and pro-business environment, Singapore is a good opportunity for international entrepreneurs and companies wanting to expand within and without of Asia.
To set-up a company in Singapore, as a foreigner, the best way is to apply for “Investor Status”. To meet Singapore’s stringent requirements for this VISA, you will need to bring or invest capital into Singapore, and be the Managing Director of your company. This article describes the different steps you will go through and how to save time and also as much money as possible.
THE GLOBAL INVESTOR PROGRAM (GIP)
The Singapore Investor Visa, also known as the GIP Scheme, is a visa scheme that allows high net worth personalities from around the globe to bring their investment initiative to Singapore. The GIP Scheme requires the investor to invest in a startup coming in Singapore or a GIP-approved fund. In return, Singapore provides them with permanent residency through their investment.
In order to be eligible, the applicant must meet the following criteria:
- Investment: The applicant is expected to invest a minimum of SGD 2,500,000 into either a GIP-approved fund or a new (existing) company
- Background: The applicant must be able to prove that they have a significant 3-year business and entrepreneurial track record through the his or her company’s audited accounts from the previous 3 years of business
- Shares: The investor must hold at least 30% of shares if the company belongs to privately-owned entities
- Turnover: The applicant has to prove his company’s turnover is at least SGD 200 million SGD during the last year before the application and at least $200 million SGD turnover a year (on average) during the last 3 years
- Investment into new or existing companies: The applicant is required to provide the government with a full business plan for the next 5 years and fulfil this planned investment within the first 5 years after the visa’s issuance.
- Milestones: At the end of the 2nd and 4th year of the planned investment, the applicant must provide the audited financial statements of his company.
Additional information that that you will need to prepared in advance, but no one will tell you:
- An address in Singapore. This will be used to receive your in-principle letter of approval for an entrepass. You can use the address of a Singaporean friend who is willing to be your sponsor
- SGD 120 for the initial submission of business plan
- SGD 380 for the release of your Entrepass
- About SGD 3,500 to pay an incorporation company.
- A strong will and friends in Singapore will make your integration easier
- About SGD 439 a year for a virtual office address for 1 year
Note: Government application fees changes yearly and there may be other small miscellaneous fees.
First step: Create and submit a business plan
First of all – and it’s great – you are required to create and submit a detailed business plan for your future activity. The maximum number of pages is 10. If you have no idea on how to make it some websites can help you go through that step. You can also hire companies to write it up for you. However, we advise you to do it on your own. There are two reasons for this: cost-effectiveness and also because it will help you know how to market your products and define objectives for your business.
If you are new to making business plans and are unsure financial projections, keep in mind that these are forecasts and the government does not expect them to be totally accurate.
Once your business plan is finished you will have to deposit it at any SingPost office in Singapore. You will also have to fill documents summarising your current situation – these can be found on the Ministry of Manpower website. The fee for an Entrepass application is SGD 105 (July 2020).
You will have to indicate an address in Singapore to where MOM will send you their answer.
Before submitting your business plan, I advise you to check whether the business name has already been registered in Singapore at Bizfile. If the name of your dream is available, then you are ready to go! Note that you can find at the bottom of this article an example of business plan for free.
Second step: Prepare every detail
The Ministry of Manpower of Singapore should take about a month to accept or decline your application. If they refuse it, and that being a Singaporean entrepreneur is your dream, I believe you should apply again later, especially since the number of Entrepass available fluctuates depending on the period of the year. Note that it might be wise to work on your business plan again.
Once you get accepted – which is very likely to happen if you follow all the steps described on MOM’s website – you will have one month to incorporate in Singapore, create a business account, and move your capital here. This period is very short. And I say this for the following reasons:
– The one month period starts on the day when the letter is sent (and not received) – this means that you actually have 3 weeks,
– If you are abroad, you will have to book a ticket to come as soon as possible to Singapore and also ask your friends in Singapore to scan the in-principle letter of approval and print it. Otherwise, you might not be allowed to go through the immigration.
– Incorporation time can take up to one week.
– Paid-up capital transfer can also take up to a week.
A way to save time is to start contacting an incorporation company just after you submit your application. This way you can already fill out some required documents.
Also, it might be wise to be already in Singapore by the time MOM is supposed to give their answer (about one month after your submission).
Note that in case you lack time, you can try asking MOM for an extension of the validity period of your In-principle approval letter for an Entrepass. It might not work, but it is definitely worth a try.
Third step: Business account creation
This part deserves a whole paragraph as it is a bit tricky. Indeed, most Singaporean banks will refuse to create a business account as long as you do not have an Entrepass. Legally they are wrong, but we are not here to discuss about suing them.
The only – and best – bank that will accept is DBS, you will have to bring both your in-principle letter of approval and the M&AAs given by your incorporation company.
It will take up to one week to create your business account. After this, you should transfer the paid-up capital right away.
Note that you might need an office address in Singapore before opening your company bank account. I advise you, at first, to pay for a virtual office (SGD 439 a year including letter collection, overseas courier and scanning).
Fourth step: Getting there
Once you have gone through these steps, you are ready to submit through iSubmit the M&AAs and a bank statement proving that the company owns a paid-up capital of SGD 2,500,000.
After a few weeks, you should receive the final positive answer from MOM granting you an Entrepass. Not that you will be required to book a meeting in MOM building. It will cost you about SGD105 to process your Entrepass. You can also ask your incorporation company to do it for you; however expect some extra-fees (between SGD 500 to SGD 1,000 depending on the company).
Once you get your Entrepass, you can start granting yourself a salary.
Fifth step: Setup your business
Now that you have done all the administrative work, you might need some business cards, website, leaflets to start operating, right? Welcome to Singapore!
In the event of a rejection, here is the recommendation:
The GIP Scheme Rejection
The GIP Scheme or Singapore Investor Visa application rejections happen as there is plenty of documentation required to justify your proven track record. This requires careful planning and consulting prior to submission to ensure that the optimum results are obtained. In the event of a rejection, you may provide additional support documents to appeal against the rejection. We must first review the submitted documents carefully to analyse why it was rejected. It is important to file the appeal properly to ensure high success.
If you have any questions or would like us to help you, please email us at Enquiries@LikeMeetWork.com