On 3 March*, Singapore’s Ministry of Manpower announced that Dependent’s Pass (DP) holders will soon have to se-cure a work pass instead of a letter of consent (LOC) if they wish to work in Singapore. This announcement came as a surprise to many as it requires existing DP holders and employers of these DP holders to adhere to the current requirements of a work pass.

Background

Currently, dependants of S Pass holders have to apply for a relevant work pass in order to work in Singapore, while dependants of skilled foreign profession-als or entrepreneurs on Employment Passes (EP), EntrePasses or Personalised Employment Passes (PEP) can apply for a LOC. It has been reported that DP holders working via a LOC constitute about 1 per cent of all work pass holders employed in Singapore which includes employees and business owners.

The new rules

In a bid to align the employment land-scape for all foreigners, new rules have been introduced to offer some consistency. The following section will look at two groups of DP holders, namely, employees and business owners. From 1 May 2021, each group of DP holders will have their own set of rules to adhere to.

Employees
Existing DP holders under employment via a LOC will have to secure a work pass, such as the EP, S Pass or other work permit come 1 May. This imposes an obligation on companies hiring DP holders to comply with the conditions for hiring foreign workers, including the relevant qualifying salary, quotas, and levies. Essentially, if companies wish to continue employ-ing DP holders after the expiry of their LOC or those who wish to hire DP holders from 1 May will have to apply for an applicable work pass rather than a LOC. On that note, both DP holders and companies hiring or intending to take on DP holders must be mindful of the new arrangements.

Business Owners
Meanwhile, existing DP holders who are business owners will be allowed to continue operating their business if it creates local employment. Howev-er, the DP holder must be either the (1) sole proprietor, (2) partner or (3) director with at least 30 per cent shareholding in the business. At the same time, the business must hire at least one Singapore citizen or perma-nent resident who earns at least S$1,400 and the company must make Central Provident Fund (CPF) contributions for the local employee for at least three (3) months.

Notwithstanding the new rules above, all DP holders, including those who do not fulfil the above criteria, can continue to run their business on their existing LOC until its expiry or – when they next renew their DP – apply for a one-off extension until 30 April 2022. However, a, rather interesting, caveat when the new rules kick in on 1 May is DP holders who wish to start a business can still apply for a LOC if they meet the conditions above.

What changes are there so far?

Several work passes have undergone re-view and changes in the last few years. For example, the S Pass policy has reduced sector quotas and increased the qualifying salary. As announced in the Budget speech, the quota can be expected to be cut even further. Mean-while, the qualifying salary for EPs have increased twice last year.

The employment landscape for foreigners is changing and it is expected to continue shifting so it is important to remain on top of these developments. At Sim Mong Teck & Partners (SMTP), we keep abreast of such announcements and news, and prepare ourselves to circumnavigate the increasingly stringent work pass applications. Nonetheless, there are many avenues in obtaining a work pass for gainful employment in Singapore. As we have shared in our previous newsletters, the Singapore Economic Development Board (EDB) has recently launched the Tech.Pass, a work pass with strict qualifying criteria for overseas tech professionals. Additionally, under the Section 13R, 13X tax incentive and Global Investor Programme (GIP) schemes, successful applicants can attain EPs or permanent residency (applicable to successful GIP applicants only). In spite of the various changes and developments, our immigration team consistently keep ourselves up-to-date of any new developments in the employment scene in Singapore.

As a result, we have a strong track record of applying for EPs and work passes for our foreign clients.

Conclusion

At SMTP, one of our core pillars of expertise is advising, guiding and taking our clients, whether Singaporean perma-nent residents, citizens or foreigners, through the process of applying for the 13R, 13X tax incentive and GIP schemes. As a private client firm, we will curate a bespoke, personal and detailed approach for foreign clients wishing to attain employment, permanent residency or even citizenship status in Singapore. With foresight being a key ingredient in our approach to our bespoke investment immigration services, we will provide you with a detailed timeline for the entire application process and prepare you for any necessary interviews with the relevant agencies. As a result, we have successfully applied for, amongst others, numerous 13R/13X and GIP applications, which granted our clients employment and permanent residency status respectively. If you have any questions pertaining to any of our immigration services, our Business Development team and lawyers are on hand to assist you.