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How to work in Singapore on a Dependent Pass

Are you in Singapore on a Dependent Pass (DP) and looking for work, or have a great idea and want set up your own business? You might be finding it tough-going, and there’s a good reason why. The employment landscape for DP holders has changed in the past year with governing body the Ministry of Manpower (MOM) tightening up rules. We spoke with Katherine Chapman from CSLB Asia Corporate Advisory Services about the situation for DP holders.

regulations for working in Singapore
Don’t be caught out by rule changes – keep the MOM website in your bookmarks

Working on a Dependent Pass

It’s possible to work on a DP. You can look for a suitable role through any of the numerous online recruitment sites (Indeed and LinkedIn are great starts) or local recruitment agencies. “If you find work, your new employer can apply for a Letter of Consent (LOC) or Employment Pass (EP) to employ you as a DP holder,” Katherine Chapman says. This is the best and most cost-effective option available.

Options for those wanting to start a business

Last year, the rules around DP holders starting a small business as a Sole Proprietorship (SP) changed – and tightened. Previously, the simple route was for a DP to register a business as a Sole Proprietor and then employ themselves on an LOC. Bingo: instant, legal employment in the business of your choosing!

That all changed last year. Katherine says a DP holder must now arrange for a Singaporean Citizen, PR holder or Foreign Individual (a person living outside of Singapore) to register a Sole Proprietorship (SP) on your behalf. “As the registered owner the SP they can then make an application to employ you under a Letter of Consent (LOC). The SP and the DP holder must demonstrate a clear employer/employee relationship and the MOM will only approve LOC’s on a case-by-case basis,” she says.

“The important point is that a DP cannot be the registered owner of the Sole Proprietorship in Singapore. The DP holder would become an employee of the SP, but not the owner,” she says. If the DP holder can find someone willing to be the registered owner of their business this a cost effective way of obtaining an LOC.

Other options

Another path is to register (or incorporate) a Singapore Private Limited Company, which must have one local director (aa Singapore citizen, PR holder or EP holder with the written approval of persons current employer and MOM). Katherine says that the capital start-up should not be less than $20,000. “Once registered, the company can apply for an LOC (again subject MOM’s discretion) or EP for the DP to work for the company by demonstrating a clear employer/employee relationship,” she says.

“Importantly, ACRA has reduced the ongoing compliance obligations for start-ups by doing away with audit requirements. This makes it a good option to gain an LOC or an EP. On the down side, the initial incorporation fees and minimum $20,000 capital start-up (required in cash) could be prohibitive for some,” she says.

Setting up a Private Limited Company: costs

The cost can vary wildly from $650 (do-it-yourself through the ACRA website) to $1,500 with additional annual costs for engaging a Company Secretary (who can take care of the administrative work, compliance and so on).

Further advice

If you want to set up a company, and engage a service provider to take care of this for you, Katherine recommends shopping around to ensure you engage someone that understands your industry and what you want to achieve with your business. “This should include the markets you wish to operate in and understanding of the rules in relation to foreigners owning and operating companies in Singapore. Also, someone who can communicate in a clear, concise manner and is responsive to your requests for information,” she says.

Projections for 2017

“Firstly, there are more changes to come for DP holders in 2017 with MOM suggesting that they will be releasing some additional requirements for DP holders with respect to obtaining LOCs,” explains Katherine. And, she says, another avenue that is becoming increasingly popular is for consultants and freelancers in similar work spaces to get together and share the cost of incorporating companies and then applying for EP or LOCs.

* Keep in mind that the Ministry of Manpower does change regulations from time-to-time, so stay up to date by visiting www.mom.gov.sg/passes-and-permits/dependants-pass/eligibility.

https://www.cslb-asia.com/

To read about successful business start-ups in Singapore head to our Business page

 

 

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