Foreign businesses that do not have a legal presence in Singapore may send their employees to Singapore for a variety of reasons that may encompass a wide spectrum of business and non-business related activities.
Examples of activities undertaken by such employees are performing market studies, participating in trade shows, meeting prospective customers, supervising projects for customers, providing after-sales technical advice and support, managing customer relationships, sourcing for goods and services, managing vendor relationships, undertaking installation projects, conducting trainings, negotiating customer contracts and working on short term projects. Some of these activities could be undertaken for related parties.
The type of work performed by the employees and, the duration and regularity of such activities will have a bearing on the tax consequences for both the foreign business and its employees. As such, with upfront planning, it may be possible to minimize the tax consequences.
In addition, foreign businesses need to ensure that they are compliant with other regulatory requirements such as company law, labour law and social security requirements when sending their employees to Singapore.
Evaluating and understanding the tax and non-tax implications of sending employees to Singapore will help in mitigating hidden risks and penalties for non-compliance.
We have compiled a checklist of some common issues that foreign businesses may consider before sending their employees to Singapore.