Options for Singapore Dependant’s Pass Holders

Options for Singapore Dependant Pass Holders www.rikvin.com Dependant's Pass Holder (Foreign Spouse of a Work Visa Holder) Option 1: Seek Employment Option 2: Start a Business Employer applies for Letter of Consent (LOC) Employer applies for Employment Pass (EP) Register a Sole Proprietorship + apply for LOc Register a Pte Ltd Company + apply for LOC Register a Pte Ltd Company + apply for EP Advantages of LOC: Advantages of EP: M Straightforward M Commensurate salary M Easy to apply No educational / professional M Job stability M Validity independent of eligibility requirements sponsoring spouse's visa Disadvantages of LOC: Disadvantages of EP: X Dependent on spouse X More stringent requirements (If the sponsoring spouse's work visa is cancelled, the DP is also automatically cancelled.) Letter of Consent (LOC) vs Employment Pass (EP) Sole Proprietorship vs Private Limited Company Advantages of Sole Proprietorship: Advantages of Pte Ltd Company: M Easy and flexible management M Easy to raise capital or funds Can be home-based M Limited liability 100% Foreign Ownership Business taxed at entity level tax M Control of decision making incentives and exemptions M Easy to add owners/transfer M Easy to add owners/transferring ownership interest ownership interest M 100% Foreign Ownership Disadvantages of Sole Proprietorship: Business looks more established M Risky, high/unlimited liability and credible No tax incentives & exemptions Profits taxed at personal income level Disadvantages of Pte Ltd Company: Difficult to raise capital and finance M High cost of maintenance M Strict compliance requirements Singapore Personal Income Tax Rates Singapore Effective Corporate Tax Rates Personal Income Tax Rates range from o% to 20% The headline corporate tax rate is 17%. Band (SGD) Rate (%) Taxable Income (SGD) Effective Tax Rate 0-20,000 0.0 100.000 0.00% 200,000 2.97% 20,001 - 30,000 2.0 300,000 3.97% 30,001 - 40,000 3.5 400,000 5.95% 40,001 - 80,000 7.0 S00.000 7.14% Sole Proprietorships are taxed at the owner's personal tax rates; whereas Pte Ltd Companies are taxed at corporate tax rates (& are eligible for tax exemptions & incentives) 80.001 - 120.000 11.5 1,000,000 10.60% 120,001 - 160,000 15.0 2,000,000 13.80% 160,001- 200,000 17.0 14.87% 3,000,000 200,001- 320,000 18.0 5,000,000 15.72% Above 320,000 20.0 10.000.000 16.36% RIKVIN RIKVIN PTE LTD | 20 Cecil Street, #14-01 Equity Plaza, Singapore 049705 Phone: (+65) 6320 1888 | Fax: (+65) 6438 2436 | [email protected] | www.rikvin.com