Deciding Between Entrepreneur Pass vs Employment Pass

Keep in mind that if the EP applicant is not a shareholder or holds less than 30% of shares in the Singapore company, he/she can only apply for Employment Pass. The issue of Employment Pass vs EntrePass is only an issue when the applicant is more than 30% shareholder in the company.

Employment Pass Considerations

When choosing to apply for Employment pass, you should be aware that the company must be incorporated first. If your relocation to Singapore is absolutely essential for your company, what do you plan to do with your company if your EP application is not successful? Are you prepared to apply for Entrepreneur Pass if your EP was not successful (you can do so within the first 6 months of company incorporation)? Or will you operate your Singapore company without relocation to Singapore and perhaps apply for Employment Pass again at a later date when you can show that your company is already doing business successfully?

What are your chances of success with the EP application? Based on our past and recent experience with handling Employment Pass (EP) applications, the following is an up-to-date list of known factors that are taken into consideration by authorities when reviewing EP applications:

Company Credentials

• Is the Singapore entity an extension (subsidiary, branch, or representative office) of a foreign company? If so, it will usually lend more credibility to the Singapore entity.
• What is the paid-up capital of the company? The higher the paid-up capital, the more credible the company. We normally recommend S$50K or above, when possible.
• Does the company have a business operations address in Singapore? Authorities are now paying special attention to this matter. Therefore, we strongly recommend that you establish a business operations address before applying for EP.
• For a newly incorporated company, has the company already secured any MOUs, contracts, etc. with suppliers and/or clients? This will add to the credibility of new the company.
• If the company was incorporated a while ago, has the company done any business (revenue, expenditure, etc.) and/or hired any local staff? A higher level of business activity will lend more credibility to the company.

Applicant Credentials

• Does the applicant have a degree from a reputable institute? The better the education, the higher the EP approval chances.
• How many years of professional experience does the applicant have? Is the applicant’s professional experience in the same field as his/her education? The more extensive the experience, the higher the EP approval chances.
• Can the applicant backup his previous work experience by showing appointment letters, recommendation letters, etc from previous employers? If so, this will be a positive factor in application assessment.
• Will the applicant be working in the same field in Singapore as his previous experience? If not, this might be a red flag for authorities.
• Does the applicant hold more than 30% shares in the new company? If so, this can act as a negative factor in the Employment Pass application assessment in some cases. Authorities in such cases may reject the EP application and ask the applicant to apply for Entrepreneur Pass (EntrePass) instead. Note that the authorities don’t seem to apply a consistent policy in this regard and this is decided on a case-by-case basis depending on the overall assessment of the application.
• What is the proposed salary for the EP applicant? The higher the salary, the better of course. The salary however must correlate with the proposed paid-up capital. If your paidup capital is low but the salary is high, this might not look very attractive unless you can prove that you will be generating business income from day one.
• Further note that the above are guidelines only and are based on our extensive experience with handling EP applications. Unfortunately authorities keep the approval criteria very confidential and do not publish any clear cut rules on this matter. Consequently, it’s not possible to guarantee a positive outcome for any EP application.

For further information about Employment Pass, refer to Detailed Guide to Employment Pass.

Entrepreneur Pass (EntrePass) Considerations

The good thing about applying for EntrePass is that you can apply for it before incorporating the Singapore company. Therefore you don’t have to incur any expenses in starting a company until you know that you can relocate to Singapore. Once your EntrePass is approved, you will be given approximately a month to incorporate your company. The negative side of pursuing the EntrePass is that the eligibility and renewal requirements are more stringent and they are as follows:

• The proposed investment amount must be at least S$50,000. When you incorporate your company, you will need to invest this amount into the company in the form of paid-up capital.
• The applicant must have at least 30% shareholding in the company.
• The proposed business idea must be of entrepreneurial in nature and be able to create local employment opportunities.
• Your background must be relevant to the business you are proposing.
• You are required to submit a 10-page business plan as part of the EntrePass application.

For subsequent renewal of the pass, you must demonstrate that: 

• Your business is in commercial operation and engaged in business activities as per the original business plan.
• You have employed local work-force and have a Total Business Spending (TBS) of at least S$100,000. 
• You have paid corporate taxes.
• Note that as is the case for Employment Pass applications, EntrePass applications are not approved as a matter of course but subject to the review and decision by authorities. Consequently, it’s not possible to guarantee a positive outcome for any Entrepass application.

For further information about EntrePass, refer to Detailed Guide to Entrepreneur Pass.

Next Steps

Based on the above considerations, let us know which pass better suits your needs so can assist you with the next steps accordingly.