I INTRODUCTION TO THE IMMIGRATION FRAMEWORK

There are very few formalities required to visit Singapore on business. The passports of most countries are accepted for entry to Singapore without a visa. A visit pass valid for 30 days (60 days for persons holding an APEC Business Travel Card) is normally issued upon arrival in Singapore, and covers visits for '(a) social, business or professional purposes, (b) as a tourist, or (c) for the purposes of seeking employment or being employed in Singapore'.

An exemption is available to engage in certain short-term activities in Singapore without a work pass. Otherwise, a work pass is required to engage in any employment, trade, vocation or profession. Applying for work passes in Singapore is a relatively smooth and uncomplicated process, taking about three weeks. The Ministry of Manpower (MOM) issues the following passes to live and work in Singapore:

  1. a work permit for low- and semi-skilled workers, domestic workers, confinement nannies (restricted to Malaysian citizens), and performing artistes employed by eligible public entertainment outlets;
  2. an S pass for mid-level skilled technical workers;
  3. an employment pass for professionals, managers, executives and highly paid or highly skilled individuals, or individuals who are both highly paid and highly skilled;
  4. a personalised employment pass (PEP) for high-earning professionals, managers and executives; and
  5. an EntrePass for entrepreneurs intending to start new businesses in Singapore that contribute to local employment.

Employment passes – the type of work pass that is most relevant for corporate immigration – are, as a matter of practice, issued for 12 to 24 months at a time in the first instance. They may be renewed – typically for 12, 24 or 36 months at the discretion of the issuing authority – as early as six months prior to expiry. Early renewal involves no loss or wastage of the validity period of the holder's current pass.

Investors and holders of employment passes, S passes and PEPs can apply to live in Singapore on a more settled basis as permanent residents. A person may include his or her spouse and children under 21 years in an application for permanent residence. Singapore permanent resident status is effectively granted for three or five years at a time, and may also be renewed prior to expiry. Permanent residents do not require work passes to engage in employment or business.

Permanent residents may apply to become Singapore citizens by registration. If the application is granted, the person must renounce his or her foreign citizenship before becoming registered as a Singapore citizen.

i Legislation and policy

The primary immigration-related statutes are the Constitution, the Immigration Act, the Employment of Foreign Manpower Act and the Enlistment Act.

The Constitution of the Republic of Singapore contains the provisions governing citizenship by birth, descent, registration and naturalisation, renunciation of citizenship and deprivation of citizenship.

The Enlistment Act obliges Singapore permanent residents and citizens to perform both full-time and 'operationally ready' (i.e., reservist) national service in the armed forces.

The Immigration Act and the Immigration Regulations govern visas and visit passes for travel and entry to Singapore, and entry and re-entry permits for Singapore permanent residents.

The Employment of Foreign Manpower Act regulates work passes for the employment of persons who are not citizens or permanent residents of Singapore.

Other than the main immigration legislation, employers should also be aware of employment guidelines, such as the Tripartite Guidelines on Fair Employment Practices, which are used by the MOM to investigate complaints of unfair employment practices (e.g., unreasonably recruiting foreigners in preference to locals).

ii The immigration authorities

The MOM facilitates and regulates the employment of foreigners in Singapore. In particular, the Work Pass Division of the MOM administers the work passes under which non-permanent-resident foreigners are permitted to live and work in Singapore.

The Immigration and Checkpoints Authority (ICA) is the division of the Ministry of Home Affairs that performs immigration and registration functions, such as the issuing of travel documents and identity cards to Singapore citizens, and various immigration passes and permits to foreigners. For instance, foreigners who are granted permanent residence receive an entry permit to 'enter and reside in Singapore', a National Registration Identity Card, and a re-entry permit – generally valid for up to five years at a time – to re-enter Singapore as a permanent resident after travel abroad. The issuance is administered by the ICA. The ICA is also responsible for border security at the country's land, sea and air checkpoints.

The Standards, Productivity and Innovation Board (SPRING) is an agency of the Ministry of Trade and Industry responsible for small and medium-sized enterprise development. Together with the MOM, the Infocomm Media Development Agency (IMDA), and SGInnovate, it jointly assesses applications for EntrePasses to start businesses in Singapore.

The Economic Development Board (EDB) is Singapore's foreign direct investment agency. Together with the ICA, the EDB administers the Global Investor Programme (GIP). This is the permanent residency programme for investors.

At 18 years of age, male permanent residents and citizens of Singapore are required to enlist for two years' full-time military service in the Singapore armed forces. From the age of 13 years and until he completes his full-time national service, a Singapore citizen or permanent resident intending to travel and remain outside Singapore for three months or more requires an exit permit from the Ministry of Defence (Mindef), which administers and enforces the Enlistment Act. When he is posted to the reserves after his full-time national service and until the age of 40 or 50 (depending on rank) a citizen or permanent resident will also require an exit permit from Mindef to travel and remain outside Singapore for six months or more.

iii Exemptions and favoured industries

Work pass-exempt activities (for not more than 90 days in a calendar year) are permitted without taking out a work pass provided that the MOM receives notification beforehand. In principle, failure to notify the MOM that a person is carrying out a work pass-exempt activity in Singapore is subject to the same penalties as working (and employing the person) in Singapore without a pass.

The following are work pass-exempt activities:

  1. performing as an actor, a singer, a dancer or a musician (or involvement as a key support member of staff) in an event supported by the government or any statutory board, or in an event at a venue to which the public or any class of the public has access (free or paid), such as a theatre or a concert hall. It excludes performing at entertainment outlets certified with a public entertainment licence (such as bars, discotheques, lounges, nightclubs, pubs, hotels, private clubs and restaurants); in the latter case, a work permit (performing artists) is required;
  2. journalism activities (including media coverage for events or media tours) supported by the government, or any statutory board constituted by or under any written law for a public purpose;
  3. involvement by sportspeople, coaches, umpires, referees and key support members of staff in sports competitions, events or training supported by the government or any statutory board constituted by or under any written law for a public purpose (other than being engaged as a sportsperson of a Singapore sports organisation pursuant to a contract of service);
  4. activities of actors, models, directors, film crew or technical crew and photographers in location filming or fashion shows;
  5. organising or conducting speaking events, such as seminars, conferences, workshops, gatherings, or talks by speakers, moderators, facilitators, and trainers, provided that the event:
    • does not relate directly or indirectly to any religious belief or to religion generally;
    • does not relate directly or indirectly to any race or community generally; and
    • is not 'cause-related' or directed toward a political end;
  6. commissioning or auditing new plant and equipment (including any audit to ensure regulatory compliance or compliance with one or more standards) by an expert or specialist;
  7. providing expertise relating to the installation, dismantling, transfer, repair or maintenance of equipment, processes or machines;
  8. providing expertise relating to the transfer of knowledge about the processes of new operations in Singapore;
  9. participating in exhibitions of trade fairs as an exhibitor or a trader (this does not include trade fairs that require a trade fair permit issued under Section 35 of the Environmental Public Health Act);
  10. acting as an arbitrator or mediator, provided that the case or matter:
    • does not relate directly or indirectly to any religious belief or to religion generally;
    • does not relate directly or indirectly to any race or community generally; and
    • is not 'cause-related' or directed toward a political end;
  11. organising, promoting, or conducting an event in a casino by:
    • event representatives employed by an event promoter whose principal place of business is situated outside Singapore; and
    • self-employed event promoters whose principal place of business is situated outside Singapore or whose principal business activity is conducted outside Singapore (event representatives and promoters must hold valid event representative and promoter licences issued by the Casino Regulatory Authority); and
  12. facilitating tours by tour leaders or tour facilitators employed by companies whose principal places of business are situated outside Singapore or whose principal businesses are conducted outside Singapore.

II INTERNATIONAL TREATY OBLIGATIONS

Singapore is a member of the World Trade Organisation (WTO). As such, it is a party to the WTO's General Agreement on Trade in Services (GATS). The normative requirement to advertise a job opening on the national Jobs Bank and consider local applicants for the job before applying for an employment pass is waived with respect to 'intra-corporate transferees' as defined by the WTO GATS.

A Comprehensive Economic Cooperation Agreement (CECA) has existed between India and Singapore since 2005. Chapter 9 of the CECA pertains to the 'Movement of Natural Persons', which allows for freer movement of labour between the two countries. Since 2011, Singapore has progressively raised the criteria for the employment of expatriates (see Section III). These measures have progressively impeded the ability of Indian companies operating in Singapore (particularly IT outsourcing companies) to employ Indian citizens in their Singapore operations essentially at will. Indian sources have expressed views that the raised work pass criteria introduced since about 2012 were inconsistent with Singapore's obligations under the CECA. Some Indian parties felt that the CECA was intended to avoid salary benchmarking and labour market testing in particular. As such, the application of increasing salary thresholds for work pass applications and the Fair Consideration Framework (FCF), respectively, were claimed by some Indian sources as violations of the CECA. The second review of the CECA was concluded on 1 June 2018 with no changes made to the chapter on the movement of people. After the second review of the CECA was completed, the information on the Singapore government's website relating to the employment of Indian nationals was updated and expanded to emphasise that the CECA takes nothing away from the qualifying criteria for work passes or the obligation on employers to try to recruit locally before seeking fill a position with an expatriate even in relation to intra-corporate transferees from India.

III THE YEAR IN REVIEW

There was steady employment growth for both 'resident' (citizen and permanent resident) and 'foreign' employees in 2019. As at December 2019, foreigners' share of employment in Singapore was about 37.9 per cent, permanent residents about 9.3 per cent, and citizens about 52.8 per cent. In short, counting permanent residents (who, by definition, are not Singapore citizens), foreign nationals' aggregate share of total employment in Singapore is about 47 per cent.

Of particular relevance to corporate immigration is that, as at June 2019, there were about 189,000 work passes extant for professionals, managers, executives and business owners, and about 197,800 for mid-level skilled technicians.

There is no formal quota for the number of foreign nationals a company can hire on employment passes but, under the rubric of the FCF, the MOM mandates labour market testing except in certain circumstances. It is advisable for an employer to demonstrate that its hiring policy is in line with FCF's objectives and that as a rule it gives genuine consideration to resident jobseekers, whether or not labour market testing is obligatory in any particular instance.

At present, labour market testing is not mandatory for (1) an employer with fewer than 10 employees, (2) a vacancy for a position with a fixed monthly salary of S$15,000 and above, or (3) an intra-corporate transferee. In March 2020, the MOM announced that, with effect from 1 May 2020, labour market testing will be expanded to cover positions paying up to S$20,000 monthly.

From 1 May 2020 also, the minimum fixed monthly salary qualifying for an employment pass will increase from S$3,600 to S$3,900; this is the salary threshold for a fresh graduate with no experience. Salaries for more experienced applicants seeking to obtain employment passes will necessarily go up proportionately, even if the MOM's guidelines only specify the minimum salary for new graduates.

The MOM pays attention to whether employers comply with the FCF in good faith or only go through the motions of compliance. Employers suspected of non-compliance with the FCF are put on a watch list for scrutiny, audit and monitoring of their human resources practices. Generally, these are companies with disproportionately few local PMEs (compared with others in the same industry), or that are the subject of complaints of nationality-based discriminatory hiring practices. Their organisational charts for the nationalities of employees at each level, recruitment processes, staff grievance-handling procedures, employee-progression frameworks, and plans and policies for developing local staff to take on higher roles or reduce reliance on foreigners on employment passes are examined. The most recent information has about 1,000 employers on the MOM's watch list for falling short of the fair-consideration guidelines, compared with about 600 the year before. The Tripartite Alliance for Fair Employment Practices (TAFEP) provides guidance to companies on the MOM's watch list on improving their employment practices, and watch-listing means that a company goes under the microscope over the course of a six-month period. Being placed on the watch list has, at the minimum, negative repercussions for the success of new employment pass applications. Since 2016, companies have had 3,000 new employment pass applications withdrawn, rejected or withheld while they were on the watch list.

Beginning in 2020, the MOM will deny a recalcitrant employer not only new employment passes, but also the renewal of existing employment passes for 12 to 24 months. It has been announced that 23 employers were sanctioned in this manner in the first two months of 2020. In January 2020, a company became the first employer to be prosecuted in court for 'whitewashing' – making a false declaration in a work pass application that it had interviewed and considered local candidates for an opening when in fact a prior decision had been made to hire a foreigner instead. The Minister for Manpower has said that responsible executives could be charged individually (not only companies) and, if they are foreigners themselves, lose their own employment passes.

While there is no quota as such on employment passes for professionals, managers, executives and business owners, the hiring of mid-level skilled workers (i.e., S passes) is strictly governed by arithmetic. Presently, the S pass quota ceilings are 13 per cent or 20 per cent of the payroll, depending on the industry sector. From 1 January 2021, the 13 per cent quota ceiling on foreign mid-level skilled workers in the 'services' sector will be cut to 10 per cent. At the same time, the 20 per cent quota ceiling in the 'construction', 'marine shipyard' and 'process' sectors will be cut to 18 per cent; and then, from 1 January 2023, cut further from 18 per cent to 15 per cent.

In contrast, 550 companies have been identified as having employment practices 'over and above what is fair and legal'. These employers have been inducted by the MOM into its Human Capital Partnership Programme, one of whose benefits is speedier processing of employment pass applications.

IV EMPLOYER SPONSORSHIP

Most work passes require employer sponsorship. The work pass framework largely only caters to persons who already have firm offers of jobs in Singapore. Work passes are not granted to jobseekers. A work pass is also specific to an employment and must be surrendered for cancellation when a person leaves his or her employer. The exception is the PEP, which, as the name suggests, is personal to the holder so that he or she can use it from one job to another for the duration of the pass; and the EntrePass, which is granted to qualifying self-employed individuals.

The sponsor company is normally expected to be a well-established, Singapore-registered company. It is expected to furnish the respective numbers of its local (i.e., citizen and permanent resident) and foreign employees, and its business turnover for the past three years, as part of the work pass application. In the case of a newly incorporated subsidiary, it is possible to get around the lack of a business record in Singapore and to establish one's bona fides by capitalising the subsidiary with a respectable level of paid-up share capital or by disclosing the financials of the parent company.

A Singapore company can be wholly foreign-owned; there is no local shareholding requirement. But a company must have at least one director who is ordinarily resident in Singapore. The resident director need not be a Singapore citizen or permanent resident. A person holding a work pass can qualify as a resident director.

The sponsor is required to certify, confirm and ensure that:

  1. the work pass application is made for the purpose as stated by the foreign employee;
  2. the information set out in the application is true and correct; and
  3. the foreign employee fully understands the declarations made in his or her application.

It is necessary to keep copies of the foreign employee's educational certificates as declared in the application form for the duration of the foreigner's employment.

i Work permits

The relevant work passes for professionals, executives, business owners and mid-level to highly skilled workers are the employment pass and the S pass.

Employment pass

From May 2020, the basic requirements to be considered for an employment pass are a fixed monthly salary of S$3,900 for young graduates, rising with age and experience and also acceptable qualifications (as defined below).

Fixed monthly salary

For the purposes of evaluating an employment pass application, 'fixed monthly salary' means basic salary and fixed allowances; that is, remuneration and allowances that do not vary from month to month; regardless, for example, of employee or company performance. It excludes:

  1. variable allowances;
  2. overtime payments, bonuses, commissions, or annual wage supplements;
  3. in-kind payments;
  4. reimbursements;
  5. productivity incentive payments;
  6. contributions by the employer to any pension or provident fund (including contributions made on the employee's behalf); or
  7. any gratuity payable on discharge, retrenchment or retirement.

Acceptable qualifications

Acceptable qualifications include:

  1. good degrees (see below);
  2. professional qualifications;
  3. specialist skills; or
  4. a proven track record and exceptional skill set.

Degree-awarding institutions are recognised according to their global and country rankings by independent accreditation boards (such as QS World University Rankings and the Academic Ranking of World Universities), the employment outcomes of their graduates and their enrolment standards. The MOM has been known to reject applications where the qualifications do not come from a listed institution.

Most employment pass applications are submitted online. An employer must first apply for a CorpPass account for access to online government services and then specifically register for the online employment pass application system. Setting up the CorpPass and EP Online accounts (both one-time procedures) takes about a week. Then the MOM takes about three weeks to decide an employment pass application. Longer processing times are to be expected for applications sponsored by newly incorporated companies.

Hard-copy applications have been phased out.

It is possible to request an employment pass for up to 60 months. In practice, employment passes are mostly granted for 12 or 24 months at a time. However, they are renewable indefinitely, subject to:

  1. checks by the MOM with the Inland Revenue Authority of Singapore on the taxpaying record of the individual;
  2. the business performance of the employer continuing to justify the person's employment; and
  3. the employment pass policy and criteria prevailing at the time of renewal.

An employment pass does not require the holder to be physically present in Singapore for any minimum number of days in a year.

PEPs

A PEP is intended for the highest-earning professionals, managers and executives. Unlike sponsored work passes, a PEP is specific to the holder and will not be cancelled when the PEP holder leaves his or her employment; the MOM merely has to be notified of each change in the holder's employment status. The holder may remain in Singapore on the PEP for up to six months between jobs.

A PEP is issued only once, for a three-year duration, and cannot be renewed. The intent behind the PEP is that the person will, after three years in Singapore, take the next step of applying to become a permanent resident and assimilate into the Singapore talent pool.

The basic requirement for a foreign national to obtain a PEP is a last-drawn fixed monthly salary of S$18,000 or more. The foreigner must file the PEP application within six months of the last drawn salary. An employment pass holder (i.e., an individual who is already working in Singapore) whose fixed monthly salary is S$12,000 or more may also apply for a PEP. The entire process usually takes about eight weeks.

The PEP is not available to self-employed freelancers, sole proprietors, partners, company director–shareholders, journalists, editors, subeditors or producers.

PEP applications are now also made online; hard-copy applications have been phased out. PEPs have the same dependant privileges as employment passes.

EntrePass

The EntrePass is intended for foreign entrepreneurs to start new businesses in Singapore and contribute to local employment. As such, an EntrePass application normally involves a proposed company rather than an already existing local sponsor or employer.

A new EntrePass is issued for 12 months and can be renewed, subject to certain criteria. It is valid for another 12 months after the first renewal, and thereafter for 24 months for subsequent renewals. The EntrePass application requires the applicant to provide his or her work experience as well as a detailed business plan. The required business form is a Singapore private limited company.

One of the following criteria must be fulfilled:

  1. the company receives at least S$100,000 funding from an unrelated venture capitalist or business angel that is accredited by a Singapore government agency;
  2. the company holds intellectual property related to its business contributed by one or more of the shareholders and registered with the Singapore Copyright Office or an approved foreign IP institution;
  3. the company is involved in ongoing research collaboration with a research institution recognised by the Agency for Science, Technology and Research or institutes of higher learning in Singapore;
  4. the company is an incubatee at a Singapore government-supported incubator;
  5. the applicant has a significant business network and entrepreneurial track record;
  6. the applicant has a record of extraordinary achievements in the areas relevant to the intended business; or
  7. the applicant has a good investment track record.

EntrePass applications are made in hard copy, and assessed jointly by the MOM, IMDA, SGInnovate and SPRING Singapore.

Renewal of an EntrePass depends on evidence of business activities, continuing shareholding in the company and employment created for locals (i.e., Singapore citizens or permanent residents) and business expenditure. Apart from the requirement that the EntrePass holder own at least 30 per cent of the shares in the company at the end of the first year, the following requirements must also be fulfilled:

After year No. of local employees Minimum business expenditure
Two One PME or three other full-time employees (FTEs) S$100,000
Four Two PMEs or six other FTEs S$200,000
Six Three PMEs or nine other FTEs S$300,000
Eight and later Four PMEs or 12 other FTEs S$400,000

Business expenditure for this purpose is defined as operating expenses less the amount of any royalties, franchise fees or know-how fees to overseas recipients, any work subcontracted overseas, and the EntrePass holder's remuneration from the company.

S pass

Persons who do not earn enough or do not have the qualifications to secure an employment pass may obtain an S pass. For work pass purposes, these employees are described as mid-level skilled technical workers. The criteria are a fixed monthly salary starting at S$2,400 and rising with age and work experience; educational qualifications from technical certificates corresponding to at least one year of full-time study through polytechnic diplomas to university degrees; and any relevant work experience. S pass applications are made through the same online system as employment passes and likewise usually take about three weeks to be processed. There is, however, an S Pass quota that obliges employers to maintain an industry-specific ratio of local and foreign employees.

Renewals and appeals

Employment and S passes may be renewed as early as six months before the pass expires. (The PEP is issued just once, and the EntrePass is only renewable three months before expiry.) Renewal largely involves the employer updating the employee's data (if it has not been necessary to do so already) and is generally a routine matter, unless there has been a change in policy or in the qualifying requirements for the pass.

Statutorily, any person who is aggrieved by a decision not to issue or renew a work pass (or to revoke a work pass) may appeal to the MOM, whose decision is final. There is no forum or tribunal or appeal should an application for the grant or renewal of a work pass be refused. An applicant is not entitled to know the reasons for refusal. Nonetheless, as a matter of practice, it has always been possible to appeal in writing for a review of an unfavourable decision. Also, the Work Pass Division does specify and ask for fuller or better information or documents. This is done so that it may have sufficient information to consider and approve an application, rather than reject it without any feedback.

ii Labour market regulation

Contract and tort law are relevant. The Employment Act, the Industrial Relations Act, the Trade Unions Act, the Retirement and Re-employment Act, the Central Provident Fund (CPF) Act, the Work Injury Compensation Act and the Workplace Health and Safety Act are also important sources of employment law in Singapore.

The CPF Act, for instance, makes it mandatory for employers to contribute to their employees' national pension fund (CPF) accounts. Under the CPF scheme, Singaporean employees and permanent residents generally contribute 20 per cent of their salary to the CPF, while their employers make a 17 per cent CPF contribution over and above the salary paid to the employee. The contribution levels do vary with age. And there is a cap on contributions. Additionally, new permanent residents phase into the CPF scheme over three years, meaning that full CPF contributions at the normal levels are required in respect of a permanent resident only in his or her third year. Foreigners on work passes are excluded from this scheme. This means that, at the same wages, Singaporean employees and permanent residents are structurally more expensive to employ than work pass holders.

The Employment Act regulates conditions of service and seeks to prevent malpractice and abuses at the work place (e.g., imposing limits on overtime work, regulating entitlement to sick leave). The Act, however, does not offer protection to employees if they earn more than S$4,500 in a 'managerial or executive position' (which has not been clearly defined). The presumption is that such employees are better able to protect their own interests and hence do not need statutory protection.

Apart from litigation, arbitration or mediation, employees or employers can approach the MOM for free mediation or conciliation services when there is an employment dispute.

iii Rights and duties of sponsored employees

Spousal and familial applications

An employment pass holder with a fixed monthly salary of at least S$6,000 may be accompanied by his or her spouse, partner, or children under dependant's passes or long-term visit passes. An employment pass holder with a fixed monthly salary of at least S$12,000 may be accompanied by his or her parents. The dependant's pass and long-term visit pass eligibility matrix is as follows:

Fixed monthly salary Relationship Eligible for
S$12,000 and above Parents Long-term visit pass
S$6,000 and above Spouse (legally married) Dependant's pass
Unmarried children under 21 years Dependant's pass
Common-law spouse Long-term visit pass
Unmarried handicapped children over 21 years Long-term visit pass
Unmarried stepchildren under 21 years Long-term visit pass

An S pass holder earning a fixed monthly salary of S$6,000 or more has the same dependant's pass privileges as an employment pass. Otherwise, S pass holders may not bring their families to live in Singapore.

Dependant privileges for an EntrePass holder are subject to different criteria, namely, employment created for locals and annual business expenditure:

Local employees Business expenditure Relationship Eligible for
Two PMEs or six other FTEs $200,000 Parents Long-term visit pass
One PME or three other FTEs $100,000 Spouse (legally married) Dependant's pass
Unmarried children under 21 years Dependant's pass
Common-law spouse Long-term visit pass
Unmarried handicapped children over 21 year Long-term visit pass
Unmarried stepchildren under 21 years Long-term visit pass

A dependant's pass or a long-term visit pass is granted for the duration of the work pass. As a general rule, the practical difference between the long-term visit pass and the dependant's pass is that the person with a dependant's pass may obtain a letter of consent to work in Singapore whereas the long-term visit pass holder may not work; that is to say, the latter must qualify for a work pass on his or her merits to be able to work in Singapore.

There is no public guidance from the MOM on whether dependant's passes and long-term social visit passes are available to same-sex spouses and partners. Male homosexual acts or 'gross indecency' between 'any male person' and 'any [other] male person' are legally criminal offences punishable with up to two years' imprisonment, but prosecutions are rare.

Cancellation of work pass

When the work pass holder leaves his or her job, the pass must be cancelled and the card surrendered to the Work Pass Division. When the work pass is cancelled, the person will receive a 30-day short-term visit pass. A visit pass can be extended for up to 89 days. Work pass holders are also required to pay any outstanding income taxes in Singapore before they leave. There is a 'tax clearance' obligation on the employer to notify the Revenue of a foreign national's impending departure at least one month in advance, and withhold any monies owing to the employee pending clearance from the Revenue.

V INVESTORS, SKILLED MIGRANTS AND ENTREPRENEURS

i Permanent residence

Holders of employment passes, PEPs, EntrePasses and S passes may apply for permanent residence after working in Singapore for about two years. Generally, the higher the category of work pass held, the greater the likelihood of obtaining permanent residence. The usual processing time is around six months.

A person applying for permanent residence may include his or her spouse and children under 21 years in the same application. A family unit applying for permanent residence is regarded as evincing a greater degree of commitment to Singapore and generally receives more favourable consideration than an application that omits one or more members of the applicant's immediate family.

On the other hand, parents should consider carefully whether to make their sons permanent residents of Singapore because compulsory conscription for national service applies to boys who obtain permanent residence through their parents. They have to enlist in the Singapore armed forces for two years when they reach the age of 18. This is followed by part-time 'operationally ready' or reservist service up to age 50 for officers or age 40 for other ranks.

A person granted permanent residence receives an entry permit to enter Singapore as a permanent resident. If he or she never leaves Singapore again, the duration of his or her status as a permanent resident is indefinite.

A permanent resident is also issued with a re-entry permit. A valid re-entry permit is required to return to Singapore as a permanent resident. In other words, a person ceases to be a permanent resident should the re-entry permit expire while he or she is abroad. In practice, therefore, permanent resident status is not truly 'permanent' but has to be renewed periodically.

ii GIP

The GIP is a scheme offering direct entry to permanent residence for an investment of S$2.5 million.

It is offered by the EDB to four categories of individuals. They are (1) entrepreneurs whose businesses have sustained revenues of S$200 million or more a year, (2) next-generation owners of businesses with sustained revenues of S$500 million or more a year, (3) founders of fast-growing businesses with valuations of S$500 million or more, and (4) individuals with assets (not counting real estate) of S$200 million or more who possess a track record in entrepreneurship, investment or management.

Entrepreneurs, next-generation business owners and founders of fast-growth businesses may choose any one of three investment options. They may elect to invest the requisite S$2.5 million passively in a pre-approved venture capital fund that invests in Singapore-based companies or they may offer their own business plan to invest S$2.5 million, either (1) to start or expand a business in an industry that Singapore is interested in promoting or (2) to set up a single-family office to manage assets (not counting real estate) of S$200 million or more (of which S$50 million or more has to be transferred to and held in Singapore). High-net-worth individuals (i.e., the fourth category of persons eligible for the GIP) must present a business plan under the single-family office option.

Permanent residency for the investor's spouse and children is available, if desired, in the same application.

VI OUTLOOK AND CONCLUSIONS

As at June 2019, the total population of Singapore was 5.7 million with about 2.21 million foreign nationals working, studying and living here. The citizen population grew by 0.8 per cent over the past year because of citizen births and immigration, while the permanent resident population has remained relatively stable. Foreign employment over the past year grew by 36,800.

The Singapore government takes a pragmatic approach towards immigration. It recognises that the population is rapidly ageing and the need to plug its thinning workforce with foreign employees; reliance on foreign manpower is a necessity. However, it also recognises that there is political sensitivity regarding the number of foreigners and the liberal immigration approach initially taken. In response, the government has implemented various initiatives to assist Singaporeans at all stages of their employment, such as training programmes and job matching. However the effectiveness of such initiatives also depends on jobseekers being open to new occupations or industries and on employers improving the quality of the jobs they offer to attract jobseekers.

The gradual raising of the thresholds for employing foreigners has most effect on labour-intensive service businesses, where labour cost is a major expense, accounting for 20–50 per cent of total revenue. Employers are encouraged to look to a wider pool of jobseekers, such as long-term unemployed or mature retrenched jobseekers, to meet their staffing needs. Stricter penalties will add real teeth to the enforcement of employment guidelines and should lead to raised human resources standards among more Singapore companies.

Employment growth remains robust in sectors such as community, social and personal services, professional services, financial and insurance services, and information and communications. Job opportunities for both local and foreign employers in these sectors will continue to provide support to the labour market.


Footnotes

1 Leon Kwong Wing is a partner and Trizia May Dela Cruz is a legal executive at Withers KhattarWong LLP.