Employment Pass vs. Work Permit: Common Features:
- A foreigner cannot work in Singapore without an appropriate employment visa. Both the EP and the WP belong to sponsored visas. It means that a foreign employee cannot obtain a visa without having a job secured in Singapore first. The procedure of visa application is organized in the way that only the employer (or an accredited visa agency) are allowed to lodge an application. Such situation implies that both an employee and an employer are subjects to concrete visa’s requirements.
- Both the Employment Pass and the Work Permit are issued for a certain period of time (2 years maximum) after which the visa can be renewed for another 2-3 years provided that an employee and his/her boss still meet the requirements (a worker’s skills correspond with a job position and a salary, and an employer’s hiring policy is within the government’s demands). The government doesn’t extend visas automatically based on the fact of present employment: the fitness of both the employee and the employer is scrutinized again.
- The government is trying to maintain delicate employment equilibrium between a local and a foreign manpower. The Ministry of Manpower struggles for the local employment, and, therefore, it imposes various restraints on employers that hire a foreign manpower. For the Employment Pass, it is implemented with the rule of compulsory advertising of the job position for the locals. For Work Permit, the government introduces quotas (the percentage of foreign manpower that is allowed to be hired).
- Applying for both passes requires elaborate strategizing and profound knowledge of the MOM requirements. Applying with a help of a visa agency increases the chance of approval
- Holders of both visas are subjects to the income tax as any income earned in Singapore must be taxed (an income gained abroad isn’t taxed in Singapore). If a foreigner’s native country has signed an agreement with SG about avoiding double taxation, no taxes will be imposed the same as if the overseas employee stays in Singapore during only 60 days a year or less. The tax rate doesn’t depend on the work visa type but rather on the number of days a foreigner spends in SG: it is 15% for 183 days or less and a resident’s rate (up to 28%) for more than 183 days.
Employment Pass vs. Work Permit: Distinctive Features
The Employment Pass fits high-paid and highly educated overseas professionals, managers and company directors (PME) who arrive in Singapore for a new round of their careers and business. The government welcomes foreign talents especially in growing sectors of the local economy, but still sets stringent demands for them: PME talents must possess valuable knowledge and expertise as well as skills which are scarce on the Singaporean job market landscape.
The Work Permit is for unskilled and usually badly educated foreign manpower that comes from certain approved countries and seeks employment in such niches of the local economy as construction, manufacturing, service, marine and so on. As seen from the description, the government doesn’t expect this manpower to showcase valuable skills or knowledge, and the WP requirements are basically applied to the employer that hires a foreigner on the WP.
The Employment Pass has a minimum (maximum) salary limits needed to separate this visa from the S Pass and the PEP and to separate subclasses within the EP itself. The WP doesn’t have salary limits as it is the only visa for unskilled manpower, and it is already separated from other visas by restrictions it contains.
The EP is a stratified visa. The minimum salary that allows a foreign professional to seek employment in Singapore on the EP is 3,300 SGD. But this is quite a conditional benchmark. Graduates from respectable universities with modest work experience can qualify for the Q1 subclass with a salary of 3,300 SGD while older and more experienced employees are expected to command a higher salary. For them, P1 (starts from 4,500 SGD) and P2 (starts from 8,000 SGD) subclasses were developed. The foreigner’s prospected salary must correspond with the age and the related work background.
The Employment Pass is open for all nations of the world; the government doesn’t apply special requirements or incentives for specific nationalities, but still some nationals may be required to provide additional documents.
The Work Permit is issued only for expats coming from special approved Asian countries such as Malaysia, Hong Kong, South Korea, India, Thailand, People’s Republic of China (PRC), and so on. Each sector of the economy has its own list of approved countries; you can check it on the website of the MOM. The Malaysians working on the WP has a privilege if they need to change an employer: a new employer can process a new WP while the Malaysian worker is still working for the present boss while other nationalities must quit their jobs first and only afterwards, take part in a new application procedure.
Quota & Levy
The quota (a certain ratio of foreign manpower to local manpower within a staff) isn’t applied to foreigner professionals and directors who work in Singapore on the Employment Pass. It doesn’t mean that Singaporean employers aren’t controlled in their hiring of the foreign manpower. The government requires them to advertise the job position for the locals prior to offering it to a foreigner. Moreover, the authorities carefully monitor all local companies for discriminatory hiring practices and penalize them if the local manpower is mistreated. The EP isn’t subject to a levy (compulsory amount of money the employer has to pay for a foreign worker) as well.
The Work Permit holders are subject to both the quota and the levy. The intensity of these restrictions depend on the sector of the economy (the quota is 15% for service niche and 20% for others) and the worker’s qualification (the levy is higher for lower-skilled employees).
What is more, the employers that hire foreigners on the WP must pay a security bond for them unless these foreigners are Malaysian.
Opportunity to Change Jobs
Although both the EP and the WP are visas that are tied to specific employers, holders of the EP are more flexible in changing employers. If they find a better job, they can participate in a new EP application while still working on the previous job position. Even after the EP gets canceled, EP holders have an opportunity to get a Short Term Visit Pass and stay in the country for one more month that can be used for job-hunting and a new EP application.
WP holders are deprived of such privilege of easy job swapping unless they are the Malaysians. After the WP is canceled, its former holder must leave the country in 1 week.
Processing Time & Visa Duration
Singapore is famous for its streamlined and automated services that link the authorities and people. The procedures of visa applications were moved online in order to shorten the processing time. Such electronic services as EP Online and WP Online allow not only submitting applications and the required documents but also tracking the application and finding out the result.
If the Employment Pass application was lodged online, the government processes the request in 7 working days. Manual applications are considered slower – during 5 weeks. The visa gives a foreigner up to 2 years of stay in Singapore (the exact duration will depend on the MOM decision).
Work Permit applications are processed much faster than those of the EP – during 1 working day – and the maximum validity set by the MOM is 24 months. Nevertheless, the duration of the visa will depend on a bunch of factors such as the passport’s validity, duration of employment and so on.
Taking Family Along
The government allows foreigners working in Singapore to take their nears and dears along as dependants but sets quite a high salary benchmark for such sponsorship. It is 5,000 SGD for lawful spouses and children younger than 21 years old (can be taken on Dependant’s Passes) as well as for common-law spouses, step or handicapped children (taken on Long Term Social Visit Pass). For parents, which can be brought to Singapore only under LTVP, the salary benchmark is even higher (8,000 SGD).
According to these requirements, not all holders of the EP are allowed to bring their families to Singapore, and for the WP holders this option is closed at all.
Expats who have worked on the Employment Pass for more than a year can pursue the Singapore’s permanent residence. This status allows them to stay in the country legally and benefit from the employment freedom the citizens have as well as from other perks such as wider opportunities in business, buying property, healthcare, and education. Applying for the permanent residence is a tricky procedure, and it usually takes much more time of waiting and preparations than the official requirement says. The government requires salary slips from the last 6 months, but the general rule says that the longer a worker’s work history in Singapore is, the higher a chance for the PR approval is.
As the WP was developed for foreigners arriving in Singapore for a temporary employment, an opportunity to get a permanent residence isn’t provided for them. According to the ICA (immigration and Checkpoints Authority), only the EP or S Pass holders can qualify, so potentially WP holders can pursue PR after they upgrade to the S Pass category.
Having Families and Children
Employment Pass holders have more private life privileges in comparison with Work Permit holders who are allowed to come to Singapore only for work purpose. Professionals, directors and managers working on the Employment Pass in Singapore are allowed to get married with anybody they want (including Singapore citizens and Singapore permanent residents), get pregnant, deliver children in Singapore and leave them in the country provided that at least one of the spouses earns no less than 5,000 SGD (amount that is considered enough for sponsoring dependants). In case the employed parent earns less, the baby must be deported overseas. The female EP holder can go on maternity leave after delivering a baby but under certain condition: she must work at least 3 months for her employer before giving birth to a baby.
WP holders are allowed to get married unless their fiancé (fiancée) is a Singapore PR or a citizen. For the latter case, a special approval from the government is needed. A pregnant WP holder is allowed to stay in the country, continue working on the WP, deliver a baby and go on maternity leave only if her husband is either a Singapore citizen or a permanent resident (the marriage is approved). If she gets pregnant not in such approved marriage, her WP must be canceled and she must be deported.
EP pass is the only work visa that allows a foreign to start his/her own business while staying in Singapore. Before doing the incorporation procedure, a foreigner must agree his/her business plan with the government and get a “blessing”. The EP holder can freely register the company in Singapore using the electronic system BizFile or via an incorporation agency, but there is one crucial point: in the beginning, a new company must have at least one Singaporean director (a citizen or a PR). This way, the EP holder would own a company in Singapore (be a shareholder), but he wouldn’t be a legal director i.e. he wouldn’t be allowed to sign documents and so on. To become a legal director, the foreigner must be hired on EP as a director by his own company. This may take some time: the new company must fortify its business profile, hire locals and grow the paid-up capital in order to become eligible to apply for the EP for a foreigner (the same requirement is applied to any other employer that is hiring foreign staff on EP).
Finding a local responsible director for your business can be challenging, the same as doing the incorporation procedure. This final step must be strategized beforehand to avoid pitiful mistakes. Everything from the form of legal entity to a company’s name is important. There are agencies that offer full incorporation services including the help with assigning a local director. One Visa and Visa Express are among the leaders in the niche.
WP holders are allowed neither to set up companies nor to be involved in any other activity that isn’t recorded on their WP card. Employers are responsible for taking care of their employees’ orderliness.
Buying Property and Getting Credits
Singaporean banks reluctantly deal with foreigners, so when either an EP holder or a WP holder decides to buy property using a bank’s loan, there might be problems. Although EP holders are higher-paid and having loans and credit cards are theoretically possible for them, the practice sees few Singapore expats (EP holders) getting them. Banks don’t deal with WP holders, so this category of expats can count only on moneylenders that often ensure themselves by setting Draconian conditions.
When it comes to buying property, EP holders are allowed to buy condos only. Landed property such as bungalows and private houses are under restriction for them. The downpayment is 20%; however, it can be hard to get the missing 80% from the bank. HDB flats are only for citizens and PRs. WP holders can also buy condos if they afford the payment / get a loan.
The Employment Pass is separated from the Work Permit not only with the huge salary gap but also with educational and skill requirements. For the EP, stricter criteria are balanced with perks of growing business, taking a family along and settling in the country permanently. The WP opens the door to a bunch of jobs for lower-skilled manpower from Asian countries but limits their privileges to employment only. For both visas, the government has developed deterrent mechanisms of protecting the right of the locals for employment: levies and quotas for the Work permit and compulsory advertising of the job for the Employment Pass. Applying for these passes requires elaborate strategizing and enlisting a professional visa help.