What Is The Difference Between Employment Pass And Work Permit In Singapore
You’ve probably heard that an Employment Pass is a better option than a Work Permit when it comes to staying in Singapore for the long term. The word “pass” itself sounds more desirable, doesn’t it? Well, I’ll tell you if it really lives up to its name. Here’s how the Employment Pass and Work Permit differ from each other and which one you are eligible to apply for.
Anyone who has friends, family or acquaintances in Singapore will know that the most common path to work in Singapore does not seem to be a direct one. Most people have found their way there, after months of twists, turns, trials and tribulations. We may not have known it at that time but this holds true for many other foreigners currently working in Singapore.
What Is The Difference Between Employment Pass And Work Permit In Singapore
The difference between employment pass and work permit in Singapore is that an employment pass is for foreigners who are working for a company or organization, whereas a work permit is for foreigners who are working for themselves. An employment pass allows you to work in Singapore as an employee, while a work permit allows you to work in Singapore as an independent contractor.
Employment Pass
The Employment Pass is for professionals and managers who can be self-employed in Singapore. It is meant for those who are employed by a company outside of Singapore and will be working on a full-time basis in Singapore. The Employment Pass allows you to work in Singapore for an extended period of time, as long as you are employed by an overseas company.
Work Permit
If you want to work in Singapore as an employee, then the Work Permit is what you need. This allows you to take up employment with any company within the country. A Work Permit holder has a limited validity period of up to 2 years, after which they must apply for an extension or leave the country.
There are a lot of differences between an employment pass and a work permit in Singapore. An employment pass is a type of visa that allows you to work in Singapore for up to 2 years at a time. A work permit is another type of visa that’s needed if you’re going to be working here for longer than 2 years, but less than 5 years.
Employment Passes are usually given out by the Ministry of Manpower (MOM), while Work Permits are issued by the Singapore Customs & Excise Department (SCE). The MOM will only issue an Employment Pass if they’re satisfied that there aren’t enough local workers available for the job you’re going to do. They’ll also check your qualifications against their list of approved occupations before giving you an Employment Pass.
If you want to stay here longer than 2 years, but less than 5 years, then you need to apply for a Work Permit instead of an Employment Pass. The SCE will issue this based on your qualifications and job experience—they won’t take into account whether there are enough Singaporeans available for it or not!
Despite both the Employment Pass and the Work Permit are often named as “work permit”, they are actually absolutely different visas. Singapore is an employment destination for high-tier professionals and company directors as well as unskilled overseas manpower. To set these polar categories of employees apart and distribute privileges and restrictions justly according to the skills each category of manpower imports to Singapore, the government has developed different visas – the Employment Pass and the Work Permit. They have only a few features in common, and a huge gap of salary scope and benefits in between.
Some common features between the two visas are that both visas can be given for up to two years and are renewable. Both work permit (WP) and employment pass (EP) holders are required to pay income taxes to the Singaporean government unless a signed agreement between the foreigner’s native country and Singapore states that there will be no double taxation.
The Difference between the Work Permit and the Employment Pass
The Employment Pass fits high-paid and highly educated overseas professionals, managers and company directors (PME) who arrive in Singapore for a fresh start in their career or business venture. 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 foreign manpower that are hired from certain approved countries. They are usually employed in industries such as construction, manufacturing, service, marine etc. The government does not expect this manpower to showcase any valuable skills or knowledge, and the WP requirements are mostly applicable to the employer that hires the individual.
Salary
The Employment Pass has a minimum salary requirement. On the other hand, 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 3,600 SGD. This is a necessary requirement for all nationalities except for Malaysians. Malaysian are able to be granted EP status at a lower salary.
Nationality
The Employment Pass is open for all nations around the world; the government does not apply special requirements or incentives for specific nationalities, but still certain nationals may be required to provide additional documents.
The Work Permit is issued only for workers arriving from special approved Asian countries such as Malaysia, Hong Kong, South Korea, India, Thailand, People’s Republic of China (PRC) just to name a few. Each sector of the economy has its own list of approved countries. Malaysians who are working on the WP are given more flexibility. In the event that a Malaysian national would like to change employers, the new employer can process a new WP while the Malaysian worker is still working for the current employer while other nationalities must first quit their jobs before proceeding to apply for the WP.
Quota & Levy
The quota (a certain ratio of foreign manpower to local manpower amongst the staff) is not applied to foreigner professionals and directors who work in Singapore on the Employment Pass. It does not mean that Singaporean employers are not controlled in their hiring of foreign manpower. The government requires them to advertise the job position for the locals prior to opening up the position to foreign individuals. Moreover, the authorities carefully monitor all local companies for discriminatory hiring practices and penalize them if the local manpower is mistreated. The EP is not subject to a levy (compulsory amount of money the employer has to pay for a foreign worker).
Employers planning to apply for Work Permits are subjected to both quota and 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). Furthermore, 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, EP holders are given more flexibility in changing employers. If they had found another job that suits their liking whilst at their current job, they can participate in a new EP application without termination. In the event the EP gets cancelled, 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 Malaysians. After the WP is cancelled, the individual must leave the country within a 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 – within 5 weeks. The visa gives a foreigner up to 2 years of stay in Singapore (the exact duration is dependent on MOM’s assessment).
Work Permit applications are processed much faster than Employment Passes – within 1 working day – and the maximum validity set by the MOM is 24 months. Nevertheless, the duration of the visa will depend on a various factors such as the passport’s validity, duration of employment and so on.
Bringing Along Your Family
The government allows foreigners working in Singapore to take their nearest and dearest along as dependants but in return, they set a high salary benchmark for sponsorships. A minimum of 6,000 SGD as a salary is required in order to bring lawful spouses, common-law spouses and children younger than 21 years old (including step children and handicapped children) on Dependent Passes. In order to bring parents along with them, a minimum of 12,000 SGD is required for the salary and the parents will be issued a Long Term Visit Pass.
This option is only available to EP holders and does not apply to WP holders.
Permanent Residence
The next stage for Expats to look forward to is the potential of obtaining permanent residency in Singapore. Expats who have worked on the Employment Pass will allow them to apply for the Singapore Permanent Resident visa. 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.
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 WP holders who wish to obtain the PR visa can do so after they upgrade to the S Pass visa.
Having Families and Children
Employment Pass holders have more private life privileges in comparison to Work Permit holders who are allowed to come to Singapore solely for work purpose. EP holders in Singapore are allowed to marry and have deliver and raise children in Singapore on the condition that their spouse (potential or otherwise) earns no less than 6,000 SGD. If employed parent earns less than the stated amount, 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 not 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 (and the marriage is approved). If she is pregnant and not married to a Singapore PR or citizen, her WP will be cancelled and she will be deported.
Doing Business
EP pass is the only work visa that allows a foreign to start his/her own business while staying in Singapore. Before incorporating their company, the individual must run through their business plan with the government and receive approval. 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). The EP holder can only be a shareholder at this point in time. 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).
WP holders are neither allowed 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 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.
When it comes to buying property, EP holders are allowed to purchase private apartments or condominiums only. Landed property such as bungalows and private houses are under restriction for them. The down payment 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 are more often than not unable to purchase any property or apply for any credit cards and loans. However, if they are able to afford the payment or obtain a loan, they are able to purchase private apartments or condominiums.
Conclusion
As you can see, the main difference between a work permit and an employment pass is that if you possess an employer’s work permit, you provide your own salary, work permit, and shelter. However, if you have an employment pass, then it is your employer who provides you with a job, salary, and work permit.
It is always better to have an employment pass or work permit in Singapore, however given that these types of visas are difficult to obtain, many foreign expats do end up taking ‘freelance’ jobs (even though they pay a high price for doing so). It is important to apply for work permits and employment passes as soon as possible when working in Singapore.