Some days back, I was forwarded an email exchange from a foreign entrepreneur reflecting the “difficulties (that would be) faced (by foreign entrepreneurs) in relocating to Singapore to startup a company” in light of changes to the Entrepass framework by the Ministry of Manpower (MOM) that took effect on 28 September 2009. Indeed, the new framework does look extremely complex and demanding, especially when it is applied to technology start-ups.
On first look, this appears to be a classic case of our government’s ongoing ignorance to the needs of entrepreneurs in the technology sector. The concept of any paid-up capital being in excess of S$2 is not one that is shared by a pair of bootstrapping engineers working on their prototype out of their rented apartment or incubator, much less the thought of hiring and paying wages to between 2 to 8 locals just to meet the requirements of the Entrepass visa. It therefore comes as no surprise that most people can immediately empathize with relocating entrepreneurs clamoring for greater ease and certainty in the immigration process and hoping to be welcomed with open arms, instead of being faced with a string of obligations to adhere to. Far fewer put themselves in the shoes of our government, and understand that the Entrepass was never designed specifically for one group of individuals.
One size never fits all – it is inevitable that some people end up falling through the cracks of a scheme designed to be open enough to cater to entrepreneurs from all industries, yet prudent enough to eliminate the false positives. We should never forget that our government always has the best of intentions behind its pro-business and pro-talent policies, even if its subsequent execution is left wanting.
Across the Pacific, one can see a parallel in the stink raised by H1B – not another strain of the H1N1 virus, but USA’s temporary guest worker visas for specialized workers – that has cast a long pall over the Valley’s ability to attract and retain talent from aboard ever since its quota was scaled back after the tech bust. Like Singapore, Silicon Valley attributes much of its success to its foreign talent, a point that was not missed by Dave McClure, Eric Ries and Shervin Pishevar when they started StartupVisa to raise awareness and change policy around the EB-5 visa, to be adapted to make it easier for entrepreneurs to come to the US and start new businesses. Under current US laws, an individual is able to obtain an EB-5 visa by starting a business with at least US$1 million in investment capital and creating 10 US jobs (or US$500k for economically targeted areas). The idea is to adapt it to enable entrepreneurs that get funded to the tune of US$500k to US$1 million by qualified US-based investors, to obtain the EB-5 visas as well.
Let’s hope MOM gets their act together and considers adopting further modifications to the Entrepass along the lines of what’s proposed by StartupVisa, in order to better tailor the scheme to suit tech entrepreneurs. In the meantime, we’ll have to resort to legal ‘hacks’ to get around the system, and take heart that Singapore has yet to go down the slippery slope of setting quotas on top talent imported from abroad.
I replied to the entrepreneur in question with a suggested way out of his predicament. I thought I’d share it here for the benefit of entrepreneurs looking for a quick and easy way to get going in Singapore.
- Incorporate a Private Limited (Pte. Ltd.) company in Singapore;
- Open a local corporate bank account and wire some funds to the account;
- Skip the Entrepass; instead, instead, go for the Employment Pass (EP) for yourself and your co-founder(s). The only thing you’ll lose out is the ability to be considered for ‘at least 30% local shareholding’, should you ever be tempted to apply for one of those government grants for SMEs to fund R&D. There’s ways around that as well, but I’d have to kill you if I told you ;-).
- Paper applications still work, but my contact at MOM tells me to expect 8 – 10 weeks processing time. Save yourself a world of pain by taking the online route, which has a much faster turnaround (at 1 – 2 weeks).
- Pay yourselves a salary of at least S$2,500 per month (since it’s left pocket to right pocket anyway) in order to clear the minimum hurdle for a Q1 Employment Pass. Q1 will enable you to apply for Dependents’ Passes for your direct family members to be in Singapore with you.
Before we go further, here’s a massive catch-22. Online EP applications require a Singpass account, which is only issuable to locals and foreigners already carrying a valid work pass (duh). This means it’s really hard for inbound tech entrepreneurs to self-serve their EP applications. Here’s the various options available to you, in order of descending complexity vs. ascending cost:
- Put in the manual (paper) application and get a government agency that you’re liaising with to write to Tan Hung Boon of MOM Work Pass Division’s Trading, Finance, IT, Marine, Process, Transport, DP & LTSVP Group (gee, what an awfully long name for a department) to fish out your manual application from the stack and expedite the process.
- Find a local who trusts you, to be your initial local director and make the online EP application using his/her SingPASS on your behalf. You can then transfer it away and reverse the company directorship once you’re in.
- Put in a manual application well in advance, sit tight and pray all the documents are received and are in order.
- Sign up with a local technology incubator for a business address, and seek their help on this.
- Pay a local service provider to take care of the application on your behalf.
Stay cool – after all, all roads do lead to Rome in the end.