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Can Work Pass Holders Start a Business in Singapore?

Updated: May 24

Can I start my own business if I am holding a valid Employment Pass (EP), S Pass or Work Permit (WP)? Can EP, S Pass or WP holders be registered as company directors? Is an EP, S Pass or WP holder allowed to invest in or hold shares of a Singapore-registered company?


Employment Pass (EP)


The general position is that an EP holder is only allowed to work for the employer the EP is approved for. The EP holder can also be appointed to the Board of Directors of the same company, without having to notify MOM.


However, companies seeking to appoint an EP holder employed by another company to be a director, prior to the appointment, will first have to seek approval from MOM.


When the request is approved, the MOM will grant a Letter of Consent (LOC) to the EP holder. The requesting company can then register their directorship positions with ACRA.


As the requesting company:


1. You must ensure that the EP holder’s employer has no objections to the EP holder taking on directorship.


2. You must get approval from MOM by applying for a LOC, as directorship duties are considered work.


3. If approved, you can then proceed to register the directorship position with ACRA.


The criteria for MOM granting LOCs are set out below:


1. The requesting company is related by shareholding to the EP holder’s employer. Such relationship can arise from by being a parent or subsidiary company or by being an investor with shares in the company. This must be reflected in ACRA records.


Secondary directorship positions in related companies, e.g. subsidiary, may be critical to the EP holder’s job role. As such, EP holders would generally be allowed to take up such secondary roles.


2. The EP holder is taking up the secondary directorship for purposes related to his/her primary employment.


If the secondary directorship position is in an unrelated company, e.g. fund entities, the LOC may still be granted if it is relevant to the EP holder’s primary occupation.


Similarly, EP holders must also seek MOM’s approval before registering a sole-proprietorship or partnership.


S Pass


S Pass holders are not allowed to carry on or manage any business in Singapore. As such, they are not allowed to be directors of any Singapore-registered company or sole-proprietors, partners of a business.


By doing so, they will have infringed the work pass conditions and their work passes will be revoked. They will also need to serve an employment ban.


If you are a S Pass holder who wants to set up a business in Singapore, you should terminate your current employment and apply for an EntrePass.


Work Permit (WP)


WP holders are not allowed to carry on or manage any business in Singapore. As such, they are not allowed to be directors of any Singapore-registered company or sole-proprietors or partners of a business.


By doing so, they will have infringed the work pass conditions and their work passes will be revoked. They will also need to serve an employment ban.


Personalised Employment Pass

You cannot be a director where you are also a shareholder in an ACRA-registered company.


You are not allowed to start a business or conduct any form of entrepreneurial activity while on a PEP. If you intend to do so, you should apply for an EntrePass.


Dependent Pass (DP)


All dependants of foreigners holding a Dependant's Pass will need an applicable work pass (e.g. EP, S Pass or Work Permit) to work in Singapore. They will have to meet the eligibility criteria for these passes.


The relevant qualifying salary, dependency ratio ceiling, and/or levies for the respective work passes will apply.

DP holders who wish to start a new business can apply for an LOC to do so, provided that their business creates local employment. They will need to fulfil the following criteria:


1. The DP holder is a sole proprietor, partner, or company director with at least 30% shareholding in the business; and


2. The business hires at least one Singaporean/Permanent Resident who earns at least the prevailing Local Qualifying Salary (currently $1,400) and receives CPF contributions for at least 3 months


Letter of Consent (LOC)


You can apply for a LOC to work in Singapore if you are a LTVP/LTVP+ holder who is the spouse or unmarried child of a Singaporean or permanent resident.


Long Term Visit Pass (LTVP or LTVP+)


If you are holding a Long-Term Visit Pass (LTVP or LTVP+) issued by ICA, you can work in Singapore if you get a Letter of Consent (LOC).


You first need to find a job in Singapore and get the employer to apply for an LOC for you.


If you are applying for, or renewing, your LTVP or LTVP+ with ICA, you will be given the option to apply for a Pre-approved Letter of Consent (PLOC).


The PLOC allows LTVP or LTVP+ holders to work in Singapore without the need to find a job first.


PLOC holders are not allowed to work in some restricted occupation such as journalist, editor, sub-editor, producer, or in any religious occupation. To work in these occupations, your prospective employer need to apply for an LOC.


Other family members of Singaporeans and permanent residents

Parents or parents-in-law of Singaporeans and permanent residents who are holding an LTVP can work in Singapore on a Work Permit. They will only be counted under the employer's overall quota.


The rest of family members who are not holding an LTVP will need to qualify for an Employment Pass, S Pass or Work Permit on their own merit to work in Singapore.


Parents accompanying a child studying in Singapore

If you are a Long Term Visit Pass holder accompanying a child who is studying in Singapore, you are not allowed to work during your first year here.


You can find a job on a Work Permit, Employment Pass or S Pass after you have been in Singapore for a year.


Under the Work Permit, you are:

  • Able to work in any sector.

  • Not subject to source country restriction.

  • Only counted under your employer's overall quota.

  • Subject to the foreign worker levy.

  • Not allowed to work in objectionable occupations (bar or dance hostess, masseur, etc.).

Employment Pass and S Pass are usually harder to get than a work permit because they require higher educational qualifications and a high minimum salary.


If you have any questions in relation to the notes above, please contact professionals from Bestar.


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