Employment pass Vs Entrepass. Which one should company shareholders & directors apply for?
10 minute read
International entrepreneurs, investors or business owners hoping to set up a venture in Singapore, are often confused on which is the best visa for them to work in Singapore- Entrepreneur Pass (EntrePass) or an Employment Pass. In this article, we will discuss the criteria, we will explore the differences between each, application procedure and all necessary information to find out which alternative is best suited for your future in Singapore.
- Incorporating a company in Singapore
- What Does It Mean to Be an Employee in Singapore?
- Understanding Employment Pass
- Entrepreneur Pass (EntrePass): what is it?
- Similarities between EPs and EntrePasses
- What is the difference between an Entrepreneur Pass and an Employment Pass?
- When can shareholders apply for an Employment Pass (EP)?
Incorporating a company in Singapore
Companies must have a minimum of 1 shareholder and a maximum of 50 shareholders in Singapore. Singapore allows foreign shareholders to own 100% of the company. Shareholders can be individuals or corporations, whether they are local or foreign.
Anyone from any country can incorporate a company in Singapore, but that does not mean they are eligible for EP, which is controlled and quota-based.
For short term visits, a social visit visa can be used to visit Singapore for business purposes. A social visit visa allows anyone to visit Singapore for business dealings only, but EP cannot be applied to a company director or shareholder as such. Only a Singapore employee is eligible to apply for EP. The Ministry of Manpower (MOM) will determine whether EP can be approved.
What Does It Mean to Be an Employee in Singapore?
As an employee in Singapore, you will:
- Singapore relocation (Singapore is where I generally reside)
- Perform at least 40 hours per week of full-time work for a Singaporean company
- Salary received monthly
- Taxes should be paid on that salary
Understanding Employment Pass
The Employment Pass is a work pass for company staff and executives who wish to work or have been offered a position in Singapore. In order to qualify for the EP, you must meet the following requirements:
Minimum monthly salary of S$5,000 (for young graduates) and S$10,500 (for candidates in the mid-forties)
Good professional background and tertiary degree from a reputable university
The EP holder may also bring in their dependants on Dependant’s Pass or Long Term Visit Passes..
Which one is better for you?
When it comes to deciding between an Employment Pass and an Entrepass, the choice should ultimately depend on your personal circumstances.
If you’re looking to work for a Singaporean company or be employed by one, then the Employment Pass might be the better option for you. This pass is granted based on your qualifications and job offer, with higher salaries often resulting in easier approval.
On the other hand, if you plan on starting your own business (which is venture-backed or possesses innovative technology) and you would like to take on a lower or no salary in the initial phase in Singapore, then the Entrepass might be more suitable. It’s designed specifically for entrepreneurs who wish to establish their business in Singapore. However, this pass requires more documentation and proof of financial backing compared to an Employment Pass.
Another factor to consider is whether you have any prior experience running a business or working in Singapore. If so, this may make it easier for you to obtain either pass depending on your specific situation.
Both passes have their pros and cons depending on what type of work or venture you plan on pursuing in Singapore. Do thorough research before making a decision that best fits your unique situation.
Entrepreneur Pass (EntrePass): what is it?
The Singapore Entrepreneur Pass, popularly known as the EntrePass, is a work visa for foreign entrepreneurs eager to start businesses which are venture-backed or possess innovative technologies in Singapore. Innovators, business owners and investors that seek to use Singapore as a launch point to access ASEAN and the Asian area also benefit from this pass.
- Applicants who have started a venture-backed/innovative business (not older than 6 months) or intend to start a business in Singapore.
- The EntrePass is open to all nationalities and requires foreign entrepreneurs to own at least 30 percent of the company’s shares.
You must meet the following requirements to qualify for the EntrePass:
- A business plan that showcases entrepreneurial and innovative ideas, as well as future hiring plans for locals
- A business should not have been established for more than six months (otherwise, you should apply for an EP).
- The candidate and business must meet the innovative criteria as an entrepreneur, innovator or investor.
Some of its key features include:
- no stipulated minimum salary
- one-year work pass renewable for another year, followed by two-year renewal afterward; exemption from paying worker levies or meeting quota requirement
- ability to bring your family members and parents (if certain business milestones are met).
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Similarities between EPs and EntrePasses
EP and EntrePass can both be used by foreign business owners moving to Singapore, so their functions are similar.
- As temporary residency schemes, both allow applicants and their immediate families to relocate to Singapore.
- Government authorities must review and approve both.
- Valid for 1-2 years and renewable, subject to their respective renewal requirements.
- With government approval, both allow the applicant and their family to apply for Singapore Permanent Residence (PR).
- A pass holder is expected to be paid a salary by their employer, so he or she must pay personal income tax on that salary every year.
What is the difference between an Entrepreneur Pass and an Employment Pass?
Criteria for eligibility
Directors, managers, or high-level professionals from foreign companies who have job offers in Singapore are eligible for the Employment Pass. Directors and company owners must be employed by their own companies.
Entrepreneurs with successful portfolios who plan to open and manage new businesses which are venture-backed or possess innovative technologies in the country are eligible to apply for the EntrePass.
Most Employment Pass applicants need a degree from a reputable university and professional experience.
The assessment of the EntrePass application is more focussed on the entrepreneurial portfolio and business plan than your educational background.
In order to be eligible for an Employment Pass, applicants must earn a minimum salary of S$,5,000 for fresh graduates and up to S$10,500 for candidates in their mid-forties.
Although EntrePass has no specific salary requirement, applicants may still need to submit certain financial records, depending on the case.
The Employment Pass can only be obtained after the company has been incorporated. Entrepreneurs who wish to move to Singapore after six months of incorporation will have to obtain an Employment Pass.
To ensure the financial ability of the company, you may need to prove to MOM that the company has sufficient funds to pay all staff costs for at least 1 year.
EntrePasses can be applied for before or up to six months after incorporation.
A Singaporean entrepreneur will be able to handle the incorporation process in person. However, they must incorporate their company within 1 year after receiving their EntrePass.
Business plans are usually not required to apply for an Employment Pass. Authorities may, however, ask for more information about your business
Applicants must submit a business plan as part of the application process. The Singaporean authorities will judge the application based on its value and potential.
As an entrepreneur, you can either apply for an Employment Pass or EntrePass. Whether which pass to apply for depends on whether the business is venture-backed or possesses innovative technologies, and also the salary which you intend to pay yourself at the start of the business.