Working in Singapore as a dependent often involves choosing between two main options: the Letter of Consent (LOC) and the Employment Pass (EP). This post provides a clear, simple comparison. We’ll directly examine Letter of Consent vs Employment Pass, focusing on who qualifies, how to apply, and the advantages of each, to assist in making the right employment choice.
What is a Letter of Consent (LOC) for DP Business Owners?
As a Dependant’s Pass (DP) holder, the Letter of Consent (LOC) is your gateway to launching a business in Singapore. It grants you the legal authorisation to work, which in this case, means running your own company.
With an LOC, you have the freedom to pursue your business ideas without needing a separate work visa. This means you can:
- Be your own boss: Establish yourself as a sole proprietor or partner in a business.
- Flexibility and control: Shape your business according to your vision and goals.
- Simplified process: Obtain authorisation directly through your existing DP, streamlining the administrative process.
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Letter of Consent or Employment Pass? Check your eligibility instantly
Requirements for a Letter of Consent (LOC)
- There is no minimum salary required.
- There is no requirement for qualifications from recognised institutions.
- There is no requirement for professional working experience and specialised skill sets.
- The Dependant’s Pass must be valid for at least 3 months.
- For Dependant’s Pass holders (if spouses is holding a PEP, EP or S Pass), to be eligible to apply for an LOC, the candidate needs to be one of the following types of business owner:
- The sole proprietor of an ACRA-registered business.
- A partner of an ACRA-registered business.
- A company director with at least 30% shareholding in an ACRA-registered business.
What is an Employment Pass (EP)?
The Employment Pass (EP) is a work visa designed for foreign professionals, managers, and executives who wish to work in Singapore. It’s a popular option for those possessing in-demand skills and qualifications, offering a route to contribute your expertise to Singapore’s dynamic economy.Requirements for an Employment Pass (EP)
- There must be a job offer in Singapore.
- There is a minimum monthly salary requirement of at least $5,600. Older and more experienced candidates will require higher salaries to qualify for an EP.
- Candidates should have qualifications from recognised institutions. Otherwise, candidates may need a higher salary to qualify for an EP.
- Candidates must possess the relevant professional working experience and specialised skill sets.
- The company should have sufficient finances to pay annual staff cost.
- Candidates are encouraged to use the MOM Self-Assessment Tool (SAT) to get an indication of whether they meet the EP requirements. If the SAT result shows that the candidate is not eligible, then the candidate should not proceed to apply for the EP because the application will be rejected. If the SAT result shows that the candidate is eligible, then the chance of getting the EP will be around 90%.
Letter of Consent vs Employment Pass
| EP | LOC(for DP holders) | |
| Minimum salary requirement | Between $5,000 to $11,500 depending on age, qualification, sector | $0 |
| Additional criteria | Company should have sufficient finances to pay staff costs for at least 1 year Need to Pass COMPASS at 40 points | Generally, only for DP holders who are business owners |
| Can employee apply? | Yes | No (with the exception of DP spouse of ONE Pass or Tech.Pass) |
| Can start and operate a business? | Yes, Private Ltd Company only | Yes. No restriction on company type |
| Validity | Up to 2 years for new application Up to 3 years for renewal | 1 year or up to the DP expiry date, whichever is shorter for new application Up to DP expiry for renewals |
| Processing time | Outcome or update within 10 days | 4 weeks |
| Renewal criteria | Between $5,600 to $11,800 depending on age, qualification, sector | Hire a local for at least 3 months |
| Consideration | Employee or business owner with funds | No need for much funds for the business. Able to operate the business with uncertainty |
Letter of Consent vs Employment Pass: Which is easier to apply?
The LOC application process is generally more straightforward than applying for an EP. Here’s a closer look at why: Simpler Requirements:- No minimum salary: Unlike the EP, there’s no minimum salary requirement for an LOC. This is a major advantage for early-stage entrepreneurs who may not have high revenue streams initially.
- No quota: EPs are subject to quotas within a company, meaning there’s a limit on how many foreign employees a company can hire on EPs. LOCs have no such quota, providing more flexibility.
- Fewer criteria: The eligibility criteria for an LOC are less stringent compared to an EP. You don’t need to score points on a framework like COMPASS, which assesses skills, qualifications, and salary benchmarks for EP applicants.
Direct Application Process
- Leveraging your DP: Since you’re already a DP holder, the LOC application process builds upon your existing pass. This eliminates the need to start from scratch with a completely new work visa application.
- Online submission: The entire LOC application can be submitted online via the Ministry of Manpower (MOM) website, making it convenient and efficient.
- Faster processing: LOC applications typically have a shorter processing time compared to EPs.
Need advise on Letter of Consent vs Employment Pass in Singapore?
Choosing the right work authorisation is a crucial first step. Whether you need a Letter of Consent (LOC) or an Employment Pass (EP), Sleek can guide you through the visa application process. Our team of experienced professionals can help you understand the requirements, prepare your application, and ensure a smooth and hassle-free experience. Don’t let visa complexities hold you back. Contact Sleek Singapore today for expert assistance with your LOC or EP application.Conclusion
Ultimately, the choice between a Letter of Consent (LOC) and an Employment Pass (EP) depends on your individual circumstances and business goals as a DP holder in Singapore. The LOC offers a simpler, more accessible route to entrepreneurship, while the EP provides more flexibility for those seeking traditional employment or higher levels of control within their company. Carefully consider the requirements, benefits, and limitations of each option to determine the best fit for your entrepreneurial journey.Frequently asked questions about Letter of Consent vs Employment Pass in Singapore
What's the main difference between a Letter of Consent and an Employment Pass?
A Letter of Consent lets certain dependents work based on someone else’s main pass. An Employment Pass is your own primary work pass based on your job offer, skills, and salary.
Who is eligible for an Letter of Consent versus an Employment Pass?
You might get a Letter of Consent if you have a specific Dependant’s Pass (DP) or Long-Term Visit Pass (LTVP/LTVP+). You need a qualifying job offer, skills, and meet salary requirements for an Employment Pass.
Does my employer need to apply for both an LOC and an EP?
Yes. Your employer must apply to the Ministry of Manpower (MOM) for you, whether it’s for a Letter of Consent or an Employment Pass.
Can I hold a Letter of Consent and then switch to an Employment Pass later?
Yes, but it requires a new application. Your employer must apply for the Employment Pass based on your qualifications. If approved, the EP replaces the Letter of Consent.
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