Singapore has been declared the best country for expatriates based on a survey conducted by HSBC among expats worldwide. We shall not discuss the reasons why Singapore is so awesome to live in but will rather focus on the legal side of expatriatism.
Getting the Employment Permit
If you want to work in Singapore as an expat you will need to first obtain a special permit from the Ministry of Manpower. Unlike other countries, Singapore offers different types of permits that service different purposes. You will most likely be looking at the options to obtain an Employment Pass or an S Pass. These two permits are provided for high and middle-skilled workers respectively. Here are the most important facts you need to know about these passes. Keep in mind that the employment permit is also your long-term residence permit in Singapore.
Singapore Employment Pass
The Employment Pass or shortly EP is provided for foreign professionals, managers and executives who want to work in Singapore. In order to apply for this pass you will need to cover the following criteria:
- Have a job offer in Singapore;
- Work in a managerial, executive or specialized job;
- Earn a fixed monthly salary of at least S$ 3900, although the sum may be higher;
- Have a degree in your field issued by a respectable institution.
You can’t apply for the EP alone. Your employer must do so. A huge benefit of the Employment pass is that if you earn a certain income (currently fixed at S$6000 per month) you can also bring your spouse and children with you as expatriates. They are eligible to receive a Dependant’s pass or a long term visit pass in case you are not legally married to your partner.
The duration of the employment pass is up to 2 years when the pass is first granted to you. It can then be renewed for periods of 3 years.
One very important consideration is that the Employment Pass is valid only if you work for the same employer. If you want to change employers you will need a new EP. A workaround option is the personalized employment pass. If you obtain a personalized EP you can change jobs without applying for another work visa and you can stay unemployed in between jobs for up to six months, after which your Personalised Employment Pass will be revoked. This pass requires a higher monthly income for the expat and is only granted for 3 years without a renewal option.
Singapore S Pass
The S Pass is a work permit for mid-level skilled staff. The requirements for this pass are slightly lower than those for the Employment Pass. You still need an employment offer and a minimum monthly income of S$ 2400. You also need a diploma or some sort of technical experience to prove your qualifications in the respective area.
Unlike the EP, employers who hire employees under S Pass are subject to quotas and levy. The quota for S Pass holders is:
- 13% of the company’s total workforce in the services sector.
- 20% of the workforce in all other sectors.
Employers must also pay levy for all S Pass holders in the company. The levy liability starts from the day the S Pass is issued and ends when the pass is cancelled or expires. The levy rate is ~ $330 per month.
Working Without a Permit
You should never perform any employment duties in Singapore without obtaining a pass. An employer that employs an expat employee who does not have a valid work pass commits a criminal offense.
Registering Your Own Company
Living and working in Singapore as an expat with an employment or an S Pass may be quire restricting for the reasons given above. Thus, some expatriates may consider directly incorporating their own company. You can learn more about the company registration procedure in Singapore here. If you have a company in Singapore you are still eligible to receive an Employment Pass as a company director with the additional security that you are only tied to your own company.
Singapore Taxes for Expats
As an expat in Singapore make sure to consult with an accountant or tax lawyer both in Singapore and your own country. You may be a subject of taxation in both countries. This applies to citizens of the USA and Australia as well as some other countries. If this is the case for you, you will probably also be eligible for double taxation relief but still, it is advisable to consult a professional.
If you are a Singapore tax resident your income is taxed at progressive resident rates and you may claim tax reliefs. If you are not a Singapore tax resident your employment income is taxed at 15% or progressive resident rates, whichever results in a higher tax amount.
Director’s fees and other income are taxed at the prevailing rate of 22% (20% prior to Year of Assessment 2017). You are not entitled to tax reliefs.