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Can An Employment Pass, Personalised Employment Pass, Or Dependent Pass Holder Set Up A Company In Singapore?

Singapore is considered one of the most business-friendly countries in the world, with its thriving economy, secure environment, tax incentives, and stable political system playing a major role towards attracting foreigners from all over the world. As more and more foreigners relocate to work in Singapore under a work pass, they may wonder if it is possible for them to set up their own business here in Singapore. The short answer is yes, but there are certain conditions and restrictions on how one can achieve that. Read along further to find out if and how an employment pass (EP) holder, personalised employment pass (PEP) holder, or a dependent pass (DP) holder can set up a company in the city-state.

Can An Employment Pass Holder Start a Business In Singapore?

A foreign individual is eligible to start a business in Singapore, as there are no regulations preventing them from doing so. However, if the foreign individual is residing in Singapore under a work pass sponsorship from an existing employment, he/she will have to take a few factors into consideration before doing so.

What is an Employment Pass?

An employment pass (EP) in Singapore is one of the work visas issued by Singapore’s Ministry of Manpower (MoM) to foreigners who are employed by a Singapore company to legally work in Singapore. There are three types of employment passes in Singapore: P1, P2, and Q1. The EP is commonly applied by employers or the company looking to act as pass sponsors for their foreign employees employed to work in their Singapore company.

Foreigners, who have already incorporated a company in Singapore and wish to relocate to the country to work and manage the business, can also try to apply for an employment pass and relocate themselves to Singapore to physically manage their incorporated company. The employment pass is commonly valid for a two-year period from issuance, after which the foreign candidate can renew the employment pass, provided the candidate still qualifies for all the pre-requisite criteria. With the EP, you can live in Singapore, work here, open a bank account and travel in and out of the country instead of applying for entry visas.

How to Get an Employment Pass in Singapore?

To apply for an employment pass, it is advised to engage the services of a reputable corporate services firm like Startup Biz Consultants, which can guide you regarding the employment pass requirements and offer you comprehensive advice to successfully secure the EP. Startup Biz Consultants can also help you in the renewal of employment pass.

Here are some requirements that must be met to qualify for Singapore’s employment pass.

  • You must earn a fixed minimum salary of at least SGD 5,000 per month if you are a young graduate. The minimum limit of salary increases with your experience, seniority of role and expertise.
  • You must work in a specialised job that requires a unique skills set, or at a managerial or executive position.
  • You must have a tertiary degree from a renowned university. If you do not possess such a degree, it could be compensated with a strong work experience and high salary.
  • Employers who are seeking an EP for candidates must also demonstrate that they have considered all job seekers fairly and justify why a local was not hired for the job.

The Singapore employment pass processing time is approximately 4 – 6 business weeks once applied online. 

Can You Set Up Your Business with a Singapore Employment Pass?

Generally speaking, an employment pass holder in Singapore can set up a business in Singapore and hold the position of a shareholder without any letter of consent from the Ministry of Manpower (MoM). However, they cannot set up a sole proprietorship or partnership when an EP is allocated to them through existing employment under another company. The EP holder can only legally work for one company but generally can get involved in the company he invested/setup as a shareholder.

However, there are certain situations where an EP holder might be able to achieve this:

  • The EP holder is registered as the shareholder of the company and will recruit employees to run the business instead of doing it himself.
  • The EP holder decides to resign from their current employment and apply his EP sponsorship under the newly incorporated business he started.
  • The EP holder is acquiring a franchise business model which he is investing in.

Most importantly, the EP holder under an employment sponsorship must be aware that many risks are involved, and should engage a professional services firm for advice before making any decision to proceed. A wrong approach or miss management of the timeline could jeopardise the holder’s immigration rights, and they could be deported from the country immediately or fall under Singapore Customs’ blacklist, which will hinder a return entry to the country.

Can A Personalised Employment Pass Holder Work In Singapore?

A personalised employment pass holder cannot set up a business in Singapore directly. However, there are ways in which the PEP holder can start his own work in the country.

What is a Personalised Employment Pass?

A Personalised Employment Pass (PEP) is a type of work visa in Singapore that does not tie you with any one particular employer, like an employment pass. With a PEP, a foreigner can easily switch jobs in Singapore without re-applying for an entry visa or another work pass. As long as the PEP holder has not been unemployed for more than a six-month period and meets all the pre-requisite criteria, he/she can stay in the country and start a job with a new employer anytime simply by informing the Ministry of Manpower (MoM).

A PEP holder enjoys the same rights and benefits as an EP holder; they can travel in and out of Singapore without any entry visa and can bring their direct family members to Singapore under a dependent pass arrangement.

An individual must pass the following requirements for a personalised employment pass Singapore:

  • You must earn a minimum fixed salary of SGD 22,500 per month and should have earned a fixed annual salary of SGD 270,000 in the previous year
  • You must not be unemployed for a period of more than six months prior; otherwise, a new application will be required if you are currently under a PEP status.
  • If you are an overseas individual, you must be earning at least SGD 18,000 per month, and your last earned salary must not be before six months at the time of applying for a PEP.

Can You Set Up Your Business With A PEP?

Personalised employment pass holders are not allowed to start their own businesses in Singapore. They cannot start their own company and be employed under the new set up . They cannot take part in any entrepreneurial activity. However, they can still be directors in a company that they do not own which are most likely their employers.

The Singapore personalised employment pass (PEP) is issued for a duration of three years once approved. Unlike other types of work passes in Singapore, a PEP is only issued once and cannot be renewed. Upon the expiration of the PEP, the individual has the choice to apply for a permanent resident or downgrade to an employment pass status. A PEP is a guaranteed route to becoming a permanent resident of Singapore, after which the individual can easily set up their own company and business in the country.

Alternatively, a PEP holder can consider applying for an EP if he/she should decide to incorporate and manage his/her own business here in Singapore. This is on the assumption that the candidate meets the pre-requisite requirement for an EP.

Can A Dependent Pass Holder Work In Singapore?

Singapore offers great opportunities for individuals to settle and work in the country, and it also allows them to bring their direct family members to Singapore and enjoy the benefits and rights that the country offers. They often have the question in mind that can a dependent pass holder work in Singapore? Let’s understand what a dependent pass in Singapore is and whether its holders can work in the country.

What is a Dependent Pass in Singapore?

A dependent pass is a type of immigration visa that is issued to the immediate family members of work visa holders, including the Employment Pass, EntrePass, Personalised Employment Pass, and the S Pass. If a foreign individual has one of these work passes and he/she wishes to bring their spouse and kids to Singapore, he/she can submit a dependent pass application for them. The applicants must meet the following dependent pass requirements:

  • They must be a Singapore citizen, permanent resident, or a holder of an EP, PEP, S Pass, EntrePass, or a work permit.
  • They must be earning a minimum of SGD 6000 per month. Depending on the number of family members, the amount will be adjusted accordingly to ensure the family can sustain a reasonable well-being when moving to Singapore.
  • The dependent pass applicant must be a married spouse, unmarried children under the age of 21 years, or unmarried handicapped children who may be above the age of 21 years.
  • The dependent applicant must be able to provide proof of financial support by the primary applicant.

Can You Work in Singapore on a Dependent Pass?

The holder of a dependent pass can work in Singapore if he/she obtains a Letter of Consent (LOC) from the Ministry of Manpower. The letter of consent for dependent pass holders allows them to work in the country for a specified time period for which the permit is issued. The LOC usually permits the DP holder to work for one particular employer. If the DP holder wishes to start their business in Singapore, they will need to apply for a work permit like Employment Pass.

There are two main routes to start a business in Singapore on a dependent pass:

Incorporate a Company and Apply for an Employment Pass

This is a straightforward process for a dependent pass holder in Singapore to incorporate a company and then apply for an Employment Pass. Once they receive the EP, they can easily start running their business by physically being there in the country, opening up a corporate bank account, and taking care of all the legal and statutory requirements.

Incorporate a Company and Obtain a Letter of Consent (LOC)

If a DP holder wishes to start a business with another partner, they will need to acquire a letter of consent from the Ministry of Manpower. To apply for the LOC, the DP holder must meet one of the following conditions:

  • He/she is the sole proprietor of a Singapore-registered business
  • He/she is a partner in a registered business
  • He/she is a director with a 30% shareholding in a registered business.

The above-mentioned sections describe in detail how an Employment Pass, Personalised Employment Pass, or Dependent Pass holder can start their own work and business in Singapore. Although not permitted directly, there are ways in which these pass holders can set up their companies in the country. To navigate through all the requirements, paperwork, and legal process of starting your own work with these passes, it is recommended to engage the services of professional corporate service providers like Startup Biz Consultants. With its years of experience and unmatched corporate expertise, Startup Biz Consultants can help you through the complete process, ensuring convenience and compliance. Contact Startup Biz Consultants today to find out how they can help you.