Employment Pass (EP) vs EntrePass
3 minute read
All foreign business professionals and entrepreneurs in Singapore need to learn what an EP and an EntrePass are and how they differ. Relocating and working in Singapore is not possible if a person does not plan to become a holder of one of these two permits.
Fortunately, this is your chance to learn all the important details regarding the EP vs EntrePass. Bear in mind that there is more than one factor you should consider when deciding on the pass that is most suitable for you and your business profile.
There are many important differences between the Employment Pass vs EntrePass, and this article will most likely direct you towards the right permit for you.
What is an EP?
The Singapore Employment Pass (EP) is a permit that allows foreign business professionals, managers, and executive officers to work in Singapore. To be eligible for this pass, you need to be offered a job in Singapore for you.
Candidates have to earn at least $4,500 a month and have sufficient qualifications and experience. On the other hand, employers need to prove that they have fairly considered other applicants for the role.
An employer has to apply for an Employment Pass on behalf of the candidate. Once the pass is approved, a first-time candidate can stay and work in Singapore for up to 2 years. Every next renewal grants the duration of stay of up to 3 years. There is no foreign worker levy or quota that is required.
Finally, it is also important to denote that the EP allows passes for family members. That means that an applicant who successfully goes through the process and obtains the pass can come to Singapore with their loved ones.
What is an EntrePass?
The Entrepreneur Pass (EntrePass) is a scheme devised for foreign serial entrepreneurs, high-profile innovators, or experienced investors that have an interest in starting a business in Singapore. This also includes relocating to Singapore.
The government of Singapore has a plan to attract foreign talent to the country with the aim of becoming a regional business hub. In the case of EntrePass, there is no stipulated minimum salary. A first-timer enjoys a stay of up to 1 year and every next successful renewal grants a duration of stay of up to 2 years.
If the pass holder has a family, it is worth noting that this pass is only available for certain family members. Also, there is no foreign worker levy or quota required.
Finally, bear in mind that an applicant has to meet the following minimum eligibility criteria under one of the three stipulated categories:
- Entrepreneur
- The applicant’s company is receiving at least S$100,000 in funding or investment from a third-party venture capitalist (VC) or angel investor duly accredited by a Singapore government agency.
- The company is incubated by an incubator or accelerator recognized by the Singapore government.
- The applicant has an established business network and an entrepreneurial track record.
- Innovator
- The applicant possesses intellectual property.
- The applicant has research collaborations with a Singapore-based institute of higher learning or credible research institute.
- There is a record of extraordinary achievements in the key expertise areas.
- Investor
- There is a record of good investments.
Main similarities
Many people make the mistake of thinking that an EP and an EntrePass are the same because there are certain areas where these passes overlap.
- First of all, it is worth saying that both passes, in essence, are temporary residency schemes that allow the applicant and their immediate family to relocate to Singapore.
- Applications for both Singapore work passes are subject to review. This means that approval is needed and it is authorized only by the authorities.
- Both schemes are issued for 1 to 2 years and they are renewable. Also, both passes allow the holder to bring certain family members along.
- Both pass schemes stipulate that the holder will be paid a salary (with a predefined minimum amount) from the company. The pass holder is liable to pay Singapore personal income tax based on the salary on an annual basis.
- Additionally, no scheme stipulates an official requirement for a paid-up capital. However, a paid-up capital amount of S$ 50,000 is likely to be a contributing factor in the review of both the EP and EntrePass applications.
Differences between the two types of visa
Now that we have covered the similarities, it is time to move on to areas where these passes differ.
The most notable area of difference is the shareholding requirement. If the candidate holds more than 30% of the shareholding, it is more likely that they will need to apply under the EntrePass scheme. However, it is still possible to apply under the Employment Pass scheme.
Application timing
If a candidate wishes to apply for a work pass before incorporating the company, they will only have the option to apply for EntrePass (because an Employment Pass can only be applied after the company is set up).
If the EntrePass application is approved, the candidate will be required to incorporate the company within 30 days.
If the company is incorporated but less than 6 months old, it is possible to apply for either EntrePass or Employment Pass depending on the respective shareholding and other eligibility criteria.
Finally, if the company is incorporated and more than 6 months old, it is possible to apply for an Employment Pass.
But when applying for an Employment Pass under a company that is more than 6 months old, the authorities may require the candidate to show positive developments in the company such as contracts, revenue, business expenditure, and so on, to ensure that the business is viable.
Education-related requirements
Education-related qualifications are less relevant for EntrePass applicants since the business idea and the applicant’s relevant background both carry more weight.
In the case of an Employment Pass, on the other hand, the applicant must have a tertiary degree from a reputable university and extensive professional experience.
Business idea and business plan criteria
If a candidate wishes to apply for the EntrePass, the business idea has to be entrepreneurial and innovative in nature. It is necessary to submit a business plan of approximately 10 pages as part of the application.
It must have the potential for good growth and result in the increased hiring of local employment. Routine business ideas such as travel agency, staffing agency, and so on, do not qualify for EntrePass applications.
On the other hand, Employment Pass applications usually do not require a business plan, but the authorities may ask for certain details on a case-by-case basis.
Local workforce recruiting requirements
Bear in mind that the EntrePass has local staff hiring requirements that shall be taken into account during the renewal processes.
The business has to employ a certain minimum number of full-time local staff (starting from two local employees) for the past 12 months at the renewal time. Hiring local staff is one of the key requirements for EntrePass renewal and this information is included in the official EntrePass guide.
Business spending requirements
Finally, keep in mind that EntrePass renewal has a certain minimum requirement in total business spending. This requirement ranges from S$ 100,000 to S$ 400,000 over the past 12 months.
Wrap up
Both the EP and EntrePass can be quite useful to many business professionals. However, it is clear that you should choose according to your own preferences and situation.
Keep in mind the major differences you have read about in this guide. The Employment Pass was designed for company staff and executives while the EntrePass was designed for founders.
The main evaluation criteria for the EP lies in the company credentials and applicant credentials while the criteria for the EntrePass include the proposed business idea, local hiring, investment amount, and the relevant background of the applicant.
So, think well before you decide to apply and contact Sleek if you need any further information. Good luck!