The Importance of Singapore Employment Pass (EP)
Singapore’s corporate taxation has contributed a major part in Singapore’s worldwide popularity as a pro-business country. The corporate taxation states that start up companies are to pay Zero tax on the first S$100,000 of chargeable income for the first three consecutive years. Furthermore, an exemption of 50% will be given on the next S$200,000 of the chargeable income. This has been the major reason why Singapore was ranked first in the list of World’s Easiest Place to do Business given by World Bank, Ease of Doing Business Report, 2010.
For this reason, foreign individuals and companies are encouraged to form a Singapore company. Also, foreign individuals who desire to work in Singapore are encouraged to obtain an Employment Pass. The Employment Pass (EP) is a work visa issued to foreign professional employees, managers, and owners/directors of Singapore companies. The number of Employment Passes that can be issued to a company are not limited by any quota system.
The following instances makes you eligible to apply for Employment Pass:
* You are an owner/director of a Singapore company and needs to relocate to Singapore to handle the operations of the company. It must be noted however that if your company is newly set up and you own more than 30% of the shares, you can also apply for Entrepreneur Pass.
* You are hiring foreign staff for your Singapore company. If this is the case, an Employment Pass application needs to be filed by the company for such foreign staff.
Employment Pass is normally issued for 1-2 years at a time and renewable thereafter. By virtue of an EP visa, you can work and live in Singapore and travel freely in and out of the country without applying for Singapore entry visas. Possessing an Employment Pass also opens the door for Singapore permanent residence in due course.
The following are the key facts and requirements for an Employment Pass:
* A monthly fixed salary of more than S$2,500.
* A tertiary degree from a reputable university coupled with relevant professional experience. Your strong professional work experience history and good salary may compensate for lack of good education in some cases. The proposed Singapore employment must be relevant to previous work experience.
* No quota system is implemented. Authorities review each application on the basis of the credentials of the employing company and the applicant.
Depending upon your salary, education, and experience, you will be issued one of the following three types of Employment Passes:
* P1 Pass: for applicants with a base salary of above S$7,000 a month.
* P2 Pass: for applicants with a base salary between S$3,500 and S$7,000 a month.
* Q1 Pass: for applicants with a base salary between S$2,500 and S$3,500 a month.
The above is a general guideline only and the specific type of pass issued is still at the discretion of the authorities. The three types of Employment Passes do not have much difference except for the following:
* Although all the above three types of EP work visas allow you to bring your spouse and children under 21 years old, Q1 pass holders are unable to apply for Long-Term Social Visit Pass for their significant others.
* The timing of permanent residence application filing. As a rule of thumb, P1 holders can apply for Singapore PR as early as 1 year after obtaining EP whereas P2 and Q1 pass holders should wait at least 2 years.
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Asiabizservices is the leading Singapore Employment Act Service Specialists. It has successfully helped thousands of foreign entrepreneurs start a Singapore company. Our office is located at Raffles Place, in the heart of the Singapore business district. (“CBD”) If you’re in our neighborhood and want to discuss any aspect of our service then feel free to come in to our offices during business hours.
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