Employed by overseas company but based in Singapore

[stormie]

hi! hope someone can advise me on the subject.

I'm a Singaporean citizen. I'm going to be employed by a overseas company but will still be residing/working in Singapore. When I worked for a US company previously, they had a Singapore registered branch so I received my pay and CPF from the Singapore entity. But the new company I will be joining is registered only overseas. My questions are:

- how does the overseas company remit my salary to me
- how does the overseas company remit my CPF (or do they not need to pay my CPF)?
- how will I be taxed? on the foreign derived income.

appreciate any advice on the above. Thanks!

[jpatokal]

Let me get this straight -- I presume you have PR status in Singapore, and thus no need for EPs and such?

In this case, I assume the company in country X in question would pay you as if you were a local employee of X, so X's compulsory insurance schemes etc apply. The money can be remitted to you anyway you like, and you're liable for Singaporean taxes on foreign income. Of course, if you're evil you don't need to tell Singapore -- or X -- about the income, but this may be criminal tax evasion...

[DimWit Kid]

Agree with patokal. Our company have an employee (though not singaporean) in a scheme like yours (as well as full expats package and locally-paid expat here).

Back to your case, you can ask the company to pay you in your home country or here. It doesn't matter. The bad thing about this is that you will definitely be liable (as far as I know) for tax in both countries (since country of origin will claim tax based on your being employed by a legal entity there, and Singapore will claim tax based of your residential status) irrespective of any tax treaties. For this reason we only employ one employee in this scheme. Our company paid the country of origin tax, while the employee pays the Singapore tax rate.

Re CPF I don't really know how it is but I suspect you need to pay CPF, and you should negotiate with the company about this as part of your total package.

[jpatokal]

Re CPF I don't really know how it is but I suspect you need to pay CPF, and you should negotiate with the company about this as part of your total package.

I don't think you need to. CPF is for registered Singaporean employers, so if your employer isn't in Singapore, they don't pay CPF (and so you don't pay either).

[sundaymorningstaple]

I think he will be liable for Singapore Taxes & CPF as he is a Singapore Citizen as he said in his opening post. I think everybody missed that statement. Singaporeans are liable for any incomes earned by working in Singapore whether or not it is a local company. And it is CPF attractable and the Employer will have to pay it or the Employee pays it all and is reimbursed by the employer on the taxes and CPF using the circular method of computation to arrive at the adjusted gross income. (This is an accepted method of computation).

[stormie]

I think he will be liable for Singapore Taxes & CPF as he is a Singapore Citizen as he said in his opening post. I think everybody missed that statement. Singaporeans are liable for any incomes earned by working in Singapore whether or not it is a local company. And it is CPF attractable and the Employer will have to pay it or the Employee pays it all and is reimbursed by the employer on the taxes and CPF using the circular method of computation to arrive at the adjusted gross income. (This is an accepted method of computation).

Appreciate your comments. Can you point me to a webpage with information on computing the CPF and this circular method of computation? What do you think abt me declaring myself self-employed and contributing my own CPF and I would declare the income remitted by my employer as foreign income. I might be able to avoid paying taxes in both countries because Singapore does have a double-taxation avoidance agreement with the country in mention.

I'm just looking at what options are available. In fact I'm flying there to discuss the terms of my employment so am gathering as much info as I can. Again thanks for your advice/help.

[stormie]

Just want to thank all of you who replied.

[sundaymorningstaple]

Appreciate your comments. Can you point me to a webpage with information on computing the CPF and this circular method of computation? What do you think abt me declaring myself self-employed and contributing my own CPF and I would declare the income remitted by my employer as foreign income. I might be able to avoid paying taxes in both countries because Singapore does have a double-taxation avoidance agreement with the country in mention.

I'm just looking at what options are available. In fact I'm flying there to discuss the terms of my employment so am gathering as much info as I can. Again thanks for your advice/help.

Stormie,

Following are a number of links to the IRAS website (different articles, circulars and pages) the last one gives an indication of what I meant about circular methods (See example two) This is based on a flat 15% and not the same things but the principle is the same. They call it regrossing of your income to taken into consideration the taxes paid on taxes.

The question & Answer is from the CPF website.

Circular regarding Overseas income received in Singapore

Taxation of Income from Overseas Employment

Individuals Employed by Non-Resident Employers (NRE)

Computation of Withholding Tax Where Tax Is Borne By Local Sponsor/Agent (Example 2)

This taken from the CPF Website:

Q: Are there any exceptions to the payment of CPF contributions for employees?
A:

Yes, please refer to the list of exceptions below:

a) Foreigners on Employment Pass, Professional Visit Pass or Work Permit

CPF contributions are not allowed for foreigners. Both the employer’s and employee’s contributions for foreign employees on Employment Pass, Professional Visit Pass or Work Permit will be rejected.

b) Partners, sole proprietors or self-employed

All Singapore citizens or Singapore Permanent Residents who derive income from Singapore or from outside Singapore through any trade, business, profession or vocation excluding employment under a contract of service are considered self-employed. Unlike employees, they do not contribute to all 3 CPF accounts. Instead, they are only required to contribute to their Medisave, which is computed based on their annual net trade income earned.

c) Employees working overseas

CPF contributions are not mandatory for Singaporean employees who work overseas. If you wish to continue making CPF contributions for your existing employees who are posted overseas, you may have to register for a new employer reference number before making a voluntary contribution.

Overseas employers are required to register for an employer reference number to make voluntary contributions for their Singaporean employees.

The above is only applicable for employees who are Singaporeans and Singapore Permanent Residents. The contribution is subject to the limit of $25,245 per calendar year.

This should be a good start for negotiations.

sms

[Sharon Tay]

hi! hope someone can advise me on the subject.

I'm a Singaporean citizen. I'm going to be employed by a overseas company but will still be residing/working in Singapore. When I worked for a US company previously, they had a Singapore registered branch so I received my pay and CPF from the Singapore entity. But the new company I will be joining is registered only overseas. My questions are:

- how does the overseas company remit my salary to me
- how does the overseas company remit my CPF (or do they not need to pay my CPF)?
- how will I be taxed? on the foreign derived income.

appreciate any advice on the above. Thanks!

I had the same scenario. You can established a US bank acct, they will credit there, or open a US $ acct in a Singapore bank and get them to credit here. No CPF as they don't have a business registration here and you can check, how you can pay your tax here, at least in the eyes of the law, you have a job, not unemployed....

[sundaymorningstaple]

Sharon,

I agree that that is a solution, but it's not something I would advocate in public because it does contravene the law. If you read my links you would know that. I am not saying it is not done however. You are obviously one that has done so.

So now he has two options.

[chachalearn]

Hi Stormie,

I am facing the same situation as you Ie I am a Singapore PR who will work for a foreign employer soon. I will be based out of Singapore.

Can you please drop me an email at [email protected] so that we can connect? Will love to have a phone call with you to discuss further. I am keen to understand how the foreign employer will be able to pay my CPF.

Thanks

[Strong Eagle]

Hi Stormie,

I am facing the same situation as you Ie I am a Singapore PR who will work for a foreign employer soon. I will be based out of Singapore.

Can you please drop me an email at [email protected] so that we can connect? Will love to have a phone call with you to discuss further. I am keen to understand how the foreign employer will be able to pay my CPF.

Thanks

Other than the fact that this thread is 12 years old, and you probably won't get a reply:

If the foreign company you are working for has no presence at all in Singapore, then you will be considered to be self employed by the gahmen. You will be required to make MediSave payments, your CPF contributions will be optional.