Comparing Entrepreneur Pass & Employment Pass
Many entrepreneurs and foreign professionals intending to relocate to Singapore are often unsure of whether to apply for the Entrepreneur Pass or the Employment Pass. Ottavia has prepared this guide to clarify the issue and to ensure that potential emigrants understand the general difference between the two schemes.
It is important to note that the type of pass most suitable to your personal circumstances may not be immediately clear. We encourage all potential applicants to contact Ottavia for more information and for personalised guidance.
How are the two schemes similar?
The two schemes share a number of characteristics:
- Both schemes can essentially be considered to be temporary residency schemes allowing the applicant and their immediate family the opportunity to relocate to Singapore.
- Applications for both scheme are subject to review and subsequent approval or rejection by the Singapore Ministry of Manpower, and other government authorities.
- Both work passes schemes are issued for a period of one to two years, after which they are renewable, subject to their respective renewal requirements.
- Both work pass schemes ultimately may allow the applicant and their family to apply for permanent residency in Singapore in due course, subject to approval by the relevant authorities.
- Both work pass schemes come with the expectation that the holder will be paid a salary by a sponsoring or nominated company. The pass holder will be liable for the payment of Singapore personal income tax to be calculated on their salary on an annual basis.
How are the two schemes different?
Although the two schemes share broad similarities, they differ in significant ways in their requirements, application process and other details.
Should the applicant of a company hold more than 30 per cent of the shares of the sponsoring company, they will need to apply under the Entrepreneur Pass Scheme. Nonetheless, it is still possible for them to apply under the Employment Pass Scheme.
How recently you incorporated your business (if applicable) will partially determine your eligibility for both the Entrepreneur Pass and Employment Pass schemes:
- Applying for the work pass prior to the incorporation of the company:
- You may only apply for Entrepreneur Pass as the Employment Pass scheme requires that the company be previously established. Should your Entrepreneur Pass application be approved, you will be required to incorporate the company within 30 days of approval.
- Applying for the work pass less than six months after incorporation:
- You may apply for either Entrepreneur Pass or the Employment Pass, pending your meeting the relevant shareholding and eligibility requirements.
- Applying for work pass more than six months after incorporation:
- You may only apply for the Employment Pass. Where the sponsoring or relevant company is more than six months old, the Ministry of Manpower and other authorities may ask for applicants to show evidence of positive developments and growth in the company to demonstrate that you are running a viable business. These can include contracts, revenue, business expenditures, et cetera.
Business idea and business plan requirements
Entrepreneur Pass requires that applicants demonstrate the entrepreneurial and innovative nature of their business idea. A business plan of approximately 10 pages will be required to be submitted as part of your application for the work pass. This business plan must show the potential for good growth that results in increased local employment opportunities. Routine business ideas such as staffing agencies, travel agencies and other similar ideas will not be considered for Entrepreneur Pass applications.
Employment Pass applications will usually not require the submission of a business plan, however this may be altered on a case-by-case basis.
The Entrepreneur Pass application puts less focus on the importance of educational qualifications, as the strength of the applicant’s business idea and their relevant background are considered to be more important. In the case of an Employment Pass, the applicant must hold a tertiary degree from a reputable university in addition to possessing good professional experience.
For the Entrepreneur Pass application, the company is required to hold a paid-up capital of at least S$50,000. No similar official requirement exists for the Employment Pass, although the quantity of paid-up capital can be considered as a contributing factor during the review of the Employment Pass application.
Local employees hiring
Entrepreneur Pass applications include a local staff hiring requirement that is taken into account during a renewal application. The company will be required to demonstrate that it has employed a certain minimum number of full-time local staff from baseline of two local employees for the previous 12 months at the time of renewal. The hiring of local staff is one of the key requirements for renewal of the Entrepreneur Pass. For further information on this, please refer to the Entrepreneur Pass Renewal Guidelines Section of Ottavia’s Entrepreneur Pass guideline.
Entrepreneur Pass renewal requires a minimum Total Business Spending requirement that ranges from S$100,000 to S$400,000 over the previous 12 months. The exact amount will depend on the number of years after your EntrePass has been awarded
Application processing time
Entrepreneur Pass applications take slightly longer to process (between four and six weeks) compared to Employment Pass applications (between one and five weeks).
The below table provides a side-by-side comparison of the Employment Pass and Entrepreneur Pass schemes. For detailed information about the respective schemes, please refer to Ottavia’s Entrepreneur Pass Guide and Employment Pass Guide.
|EMPLOYMENT PASS||ENTREPRENEUR PASS|
|Who is it for?||Professionals employed by a business. Company staff includes executives.||Founders of a newly established business who hold a minimum of 30 per cent shareholding.|
|When can it be applied?||Applications can be made at any point after the company is incorporated.||Applications must be made either prior to incorporation of the company or within six months after incorporation.|
|What is the main evaluation criteria?||Applicant credentials: relevant experience, proposed salary, education and qualifications|
Company credentials: Operating history and paid-up capital
|Local employment potential, proposed business idea, initial investment amount, applicant’s relevant business and entrepreneurial background.|
|What is the minimum salary requirement?||SGD 3,300 (w.e.f. 1 January 2014).|
Note: This salary threshold will be raised to SGD 3,600 w.e.f. 1 January 2017.
Please refer to the Ministry of Manpower’s website for more information.
|No specific requirement|
|Is there a minimum investment amount required?||No official minimum amount is required as part of the process, but the amount of paid up capital will be considered by the authorities. Ottavia recommends a minimum of SGD 50,000.||A minimum investment amount of SGD 50,000 is required.|
|Is there any difference in the documents to be submitted?||The MOM may require a copy of the tenancy agreement for the business’ operating address and other supplementary documents as required.||Requires submission of a 10-page business plan.|
|Who reviews and approves/disapproves the pass?||A single government authority – The Ministry of Manpower (MOM).||Two different government bodies – Standards, Productivity and Innovation Board Singapore (SPRING) and The Ministry of Manpower (MOM).|
|What’s the processing time after application submission?||Between 1 day and 5 weeks||Between 4 and 6 weeks.|
|For how long is the pass issued initially?||1-2 years at the discretion of authorities||1 year|
|Are family members eligible to relocate to Singapore?||Yes. The spouse of the applicant and unmarried children under 21.||Yes. The spouse of the applicant and unmarried children under 21.|
|Can the spouse work in Singapore||Yes. Permission must be granted by the relevant authorities.||Yes. Permission must be granted by the relevant authorities.|
|Can the children study in Singapore?||Yes, children can attend public or private schools.||Yes, children can attend public or private schools.|
|What is the renewal criteria?||You must still be employed by the company.||Your business must still be in operation and working according to the original business plan submitted to the authorities. The company should be employing local staff and be meeting any other criteria as outlined in the Entrepreneur Pass approval letter or eligibility requirements.|
|Can the applicant apply for Singapore permanent residence in due course?||Yes. Normally after 2 years and is subject to approval by authorities.||Yes. Normally after 2 years and is subject to approval by authorities.|
For more information on both the Entrepreneur Pass and the Employment Pass schemes, please refer to the Ministry of Manpower website.