A general introduction to immigration law and policy in Singapore

An extract from The Corporate Immigration Review, 10th Edition

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.

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).

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.

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.

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.

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.