In order to obtain an employment pass, a foreigner will need to get the prospective employer to apply for an Employment Pass (EP) for him or her. I will then ask the person who posed this question whether the primary motivation for setting up a new company is to obtain an EP. If so, then the answer to this question would be no. However, if the reason for setting up a new company was to do business in Singapore, then obtaining an EP for a foreign employee would be possible if the criteria to obtain an EP is met. Here are some other more practical considerations for the newly set up company.
The company should be in a sound financial position to pay the incoming employee
If the company has very low paid-up capital, say $100, and has little to no income, then how can it be expected to maintain the salary of the EP holder? The minimum salary of the EP holder is $4,500 a month. If the company does not have that money in the company account, how will it pay salaries?
The company must be actively doing business
The company may be getting a foothold in the market but it should have vendors and suppliers. It should also have expenses, an operational office and maintaining proper accounts. This is what most proper business setups would have in place. If the company is merely a
There must be a very good reason for the company to hire a foreigner instead of a Singaporean or Singapore permanent resident (PR)
The position must be advertised in the jobs bank before it is opened up to foreigners. A company cannot hire a foreigner outright as the priority should be given to Singaporeans and Singapore PR. The company can only hire a foreigner if the position cannot be filled by a local.
The setting up of a company should be with the purpose of having commercial activities. The hiring of employees, and the possible hiring of foreigners, should be to support the purpose of the company. If the company is set up by foreigners with the eventual goal to obtain an EP, the reason for this should be that the foreigner is key to the company and his or her presence in Singapore should allow the company to function more efficiently. Typically an active, newly set up company should have a decent number of transactions after six months to consider hiring someone on an EP. Our experience tells us that applying for an EP soon after incorporating a new company often results in a failed application. Like we previously mentioned, this is not set in stone. If the company is genuinely expanding and needs to hire, a genuine EP application will still be considered by the Ministry of Manpower.
If you would like to incorporate a company and/ or apply for an EP, you may contact us at [email protected].
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
The editorial team at Singapore Secretary Services
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