Foreign nationals intending to enter Singapore to take up employment or to engage in business must obtain the relevant pass from the Ministry of Manpower (MOM).
Primarily, the Singapore government has adopted the policy of encouraging well-qualified and skilled foreigners who can contribute to the country’s economy to join the workforce in Singapore. EP and S Pass holders can subsequently apply for permanent residence in Singapore, supported by six months’ pay slips and three years of tax assessments.
Another permanent residence scheme exists whereby foreigners with entrepreneurial ability and substantial financial resources may invest in Singapore under the Global Investor Programme administered by the Singapore EDB.
Foreigners who plan to exercise employment or establish businesses in Singapore must obtain the necessary approval from the relevant authority prior to the commencement of employment.
A Work Permit is generally for lower-skilled foreigners, from an approved country or territory who wants to work in Singapore. Various conditions apply depending on the country of origin of the workers. Employers of Work Permit holders must purchase medical insurance with a minimum coverage of $15,000 for inpatient care and day surgery. With the exception of Malaysian workers, employers will also need to provide a bank or insurance guarantee of $5,000 per foreign worker.
Employers are also required to pay the Foreign Worker Levy which is a pricing mechanism designed to regulate the number of foreign workers in Singapore. The Foreign Worker Levy is paid on a monthly basis and the amount is dependent on the type of industry, as well as the “Dependency Ceiling” i.e. the number of foreign workers that may be employed by that industry and the qualifications of the workers. The levy amount varies from $300 to $950 per month for each employee, depending on the number of Work Permit holders employed by the company.
An S Pass is granted to mid-level skilled workers who earn a fixed monthly salary of at least $2,200, possess the required tertiary education or technical training and have relevant work experience. The number of S Pass holders an employer can employ is capped at 15% of its workforce for the service sector and 20% for the other sectors. The employer must purchase and maintain similar medical insurance for S Pass holders as for the Work Permit holders and are also required to pay a Foreign Worker Levy of $330 for the S Pass quota up to 10% of the company’s total workforce. The next 10% to 20% of the S Pass quota will be levied at $650.
Employment Passes (EP) are usually issued to graduates, professionals, technical personnel and skilled workers in managerial, executive or specialised jobs. The requirements include recognised qualifications, preferably a good degree, adequate relevant experience and a salary of at least $3,600 a month.
The company needs to ensure that it is financially strong enough to support the salaries and costs of employing the EP holder and also the other business expenses.
From 1 January 2018 onwards, EP and S Pass holders need to earn a fixed monthly salary of at least $6,000 to be eligible to apply for Dependent Passes (DP) for their legally married spouse and unmarried children under the age of 21 years old. This is a 20% increase from the current qualifying salary of $5,000.
The qualifying salary to apply for the Long Term Visit Pass (LTVP) for parents will similarly be adjusted upwards by 20% from the current $10,000 to $12,000.
The above changes will apply to new DP or LTVP applications made on or after 1st January 2018. Renewal applications made on or after 1st January 2018 will not be affected as the salary criteria remains unchanged.
However, if the pass holder is changing their employer, they will need to meet the revised salary criteria to retain their dependant privileges.
It should be noted that dependants will typically need to present the EP that they are attached to, in order to access certain services in Singapore. As an example, DP holders cannot get the following services on their own accord: a mobile phone contract, an internet provider or a TV provider.
Both EP and DP are granted by the MOM for periods ranging from one to three years and are renewable upon expiry.
Entrepreneur Pass (EntrePass)
The EntrePass is designed for foreigners who intend to move to Singapore to start a business. Applicants must own at least 30% of a newly incorporated Private Limited (Pte. Ltd.) company that is registered under ACRA for less than 6 months at the time of application. The paid-up capital must be at least $50,000 and documentary proof from a local bank is required. In addition, the business must meet one of the 4 other requirements: ownership of Intellectual Property (IP), investment by accredited venture capitalist/business angel, conducting ongoing research with a recognized institution or incubatee at a Singapore Government supported incubator.
Personalized Employment Pass
The Personalized Employment Pass (PEP) is available to current EP holders who earn a fixed monthly salary of at least $12,000 or foreign professionals whose last drawn fixed monthly salary was at least $18,000.
The pass is issued for three years at each successful application and is non-renewable.
The pass holder can take on employment in any sector and change between jobs freely and need not make a new pass application with each change. However, PEP holders must earn an annual fixed salary of at least $144,000 for each calendar year of the PEP and ensure that there is no lapse of more than six continuous months in between change of jobs.
In addition, the pass holder can remain in Singapore for up to six months, to source for new employment opportunities.
Singapore offers permanent residency to foreign investors under the Global Investor Programme and holders of the above mentioned work passes under certain conditions. The benefits of the permanent residency include:
- The capacity to stay in Singapore for an unlimited period of time, subjected to the validity of the permanent residence issued.
- Employer and employee contributions to the CPF,
- The possibility of public home ownership,
- The possibility for the resident’s children to enter Singapore’s public education system.
One of the main obligations pertaining to PRs is the obligation for their sons (if the sons are also PRs) to enlist for national service when they are 18. National Service in Singapore lasts for two years. This is followed by 40 days of Operationally Ready National Service every year until they are 50 years old for officers, or 40 years old for other ranks.