Tightening of Work Pass Requirements for Foreigners in Singapore
The Ministry of Manpower announced that from 1 May 2021, foreigners in Singapore on dependant pass (“DP Holder”) will need to have their own work pass to entitle them to be employed in Singapore.
With Singapore known as a business-friendly country with laws and tax system which attract foreigners to live and work here, these individuals often plan to relocate to Singapore with their family members, especially their spouse and children. The Dependant Pass allows spouse and children of Employment Pass, EntrePass or Personalised Employment Pass holders to join them in Singapore.
Currently, DP holders do not need a separate work pass and can work after being granted an LOC issued by the Ministry of Manpower. With no minimum salary requirements, no foreign worker levy or quota requirement, and relatively short processing time for an LOC approval, it has been fairly easy for employers to hire DP holders.
By way of background, a dependant:
(i) of a holder of an Employment Pass, EntrePass or Personalised Employment Pass;
(ii) with a dependent’s pass valid for at least 3 months;
(iii) who had a job offer from a Singapore employer, can “piggy back” on their spouses to work in Singapore by obtaining an LOC from the Ministry of Manpower.
To this end, a separate Employment Pass, S Pass, or Work Permit, is not necessary for the DP Holder, as long as the Dependant Pass Holder obtains a LOC. An LOC :
(i) is significantly easier to obtain than other work passes as there is no minimum qualifying salary for the same;
(ii) does not subject the employer to a foreign worker levy;
(iii) does not form part of an employer’s dependency ratio (i.e. the proportion of S Pass and Work Permit holders to local employees that an employer employs);
(iv) does not require an employer to advertise the job on the MyCareersFuture.gov portal before an LOC application is made. This makes LOCs an extremely attractive manner by which employers can employ foreigners who are Dependant Pass Holders.
Impact on Employers
From 1 May 2021, employers will no longer be able to apply for LOCs to allow Dependant Pass holders to work in Singapore. Employers currently employing Dependant Pass holders with LOCs will now have to apply for work passes such as an Employment Pass, S Pass or Work Permit for these individuals once their current LOC expires.
It will facilitate the transition to a work pass. Currently, the transition provides exemption from existing job advertising requirements. However, the relevant qualifying salary, dependency ratio ceiling, and/or levies for the respective work passes will apply. MNCs will now need to consider this new regulation when hiring or transferring its foreign employees with families relocating to Singapore, as it impacts their potential foreign hire’s family arrangements and desire to work in Singapore.
Impact on Dependent Pass Holders
Existing Dependant Pass holders with an LOC will be allowed to continue working until the LOC expires, after which they will need to obtain an applicable work pass to continue working in Singapore. DP holders who are running a business in Singapore will be allowed to continue working on an LOC if they are either a sole proprietor, partner or director holding at least 30% of company’s shares, and that their business employs at least one Singaporean or permanent resident who earns at least S$1,400 and receives CPF contribution for at least 3 months.
Those who do not fulfil these criteria can continue to run their business on their existing LOC until its expiry, or apply for a one-off extension before 1 May 2022, when they next renew their DP. DP holders who want to start a business can apply for an LOC even after 1 May 2021, provided the above conditions are met.
Understanding Singapore Work Pass
This increasing restriction of Singapore work visas has led to delays in processing times, as the immigration authorities have increased scrutiny while reviewing applications. Online applications that used to take one week for the most popular work permit the Employment Pass, will now take up to three weeks. In person applications can take longer than 5 weeks.
This is especially true in the IT sector, where Singapore along with the US and Australia have cracked down on issuing work visas to Indian IT outsourcing companies. Typical 2-4 week processing times now have increased to several months in some cases, if there is a comprehensive review of the application to make sure that local workers are not being passed over.
Work permit cost in Singapore has increased in recent years to reflect the effort of more intense application review. For the Employment Pass, the application fee ranges from $30 to $70 and the issuance fee is an additional $30 to $150. While these costs are not prohibitive, a foreign company has to factor in the staff time required of HR departments to post and monitor applications.
Many companies just entering the Singapore market will rely on a local employer of record through Shield GEO to handle all immigration and work permit sponsorship and applications. This can alleviate the burden on global mobility professionals, and given the new level of complexity for work visas, having a local expert in Singapore can save lots of time and money when deploying staff. Our in-country specialists can simplify all aspects of employment and immigration in Singapore, and can advise you on the best work visa for your overseas workers.
