Singapore is renowned for its ease of doing business, attracting professionals from around the world who wish to work and live in the city-state. If you hold an Employment Pass (EP) and are considering starting a business here, the answer is yes, but with certain conditions.
An EP is designed for foreign professionals employed in Singapore. While it primarily allows you to work for your employer, it may also open the door to starting your own business if you go through the proper channels. The process isn’t automatic; you must seek approval from the Ministry of Manpower (MOM), meet specific eligibility requirements, and follow guidelines laid out by the Accounting and Corporate Regulatory Authority (ACRA).
This guide walks you through everything you need to know. From understanding the required permissions to the practical steps involved in incorporating a company in Singapore, this article helps Employment Pass holders navigate the path to entrepreneurship in a transparent and compliant manner.
What is the Role of an Employment Pass Holder in Singapore?
The Employment Pass (EP) is issued by the Ministry of Manpower (MOM) to foreign professionals who work in Singapore. To qualify, candidates must earn at least $5,000 a month and pass a points-based system called COMPASS.
While it is primarily intended for employment, EP holders may explore business opportunities, provided they adhere to ACRA’s rules and obtain formal approval from MOM. They must also follow ACRA’s rules and remain compliant with all applicable regulatory requirements.
For more reference, View MOM’s EP Guide.
Can an EP Holder Legally Start a Business in Singapore?
Technically, yes—but not without prior approval. An Employment Pass (EP) is issued to foreign professionals to work for a specific employer in Singapore. It does not automatically permit business ownership or directorship in another company.
If an EP holder wants to start a business, they must first seek approval from the Ministry of Manpower (MOM). The individual must not engage in business activities unless their current EP conditions are updated or changed.
What are the Steps to Register a Company as an EP Holder in Singapore?
If you’re holding an Employment Pass (EP) and intend to start a business in Singapore, the process involves more than just filing paperwork. There are specific legal and regulatory steps to follow—both to incorporate the company and to secure permission from the Ministry of Manpower (MOM) for your involvement.
Here’s a step-by-step overview to guide you through it:
| Step | Action | Explanation |
|---|---|---|
| 1 | Choose and Reserve a Company Name | Please start by selecting a suitable name for your business and reserving it through ACRA’s BizFile+ portal. The name must be unique and must not conflict with existing businesses. You can perform a name check directly on the portal before proceeding. |
| 2 | Engage a Licensed Corporate Service Provider (CSP) | As an EP holder, you cannot register the company on your own. You’ll need to appoint a registered CSP to manage the incorporation process and ensure you meet all regulatory requirements. They’ll also assist with paperwork and statutory submissions. |
| 3 | Prepare Incorporation Documents | Your CSP will prepare and collate all necessary documents, including the company’s constitution, consent to act as directors, shareholder details, and proof of identification. Ensuring these are correctly completed is crucial before submission. |
| 4 | Appoint a Local Director and Company Secretary | Singapore law requires every private limited company to have at least one resident director. A company secretary must also be appointed within six months of incorporation. If needed, nominee director services can be arranged by your CSP. |
| 5 | Apply to MOM for Involvement Approval | As an EP holder, you must request permission from the Ministry of Manpower to be involved in your company’s operations. This may be in the form of a Letter of Consent (LOC) or a new EP linked to the business. You are not allowed to manage the business without this approval. |
| 6 | Register the Company with ACRA | Once the documentation is in order and the necessary approvals are obtained, your CSP will proceed to register the company with ACRA. This step is handled online via BizFile+ and, in most cases, can be completed within a day. |
| 7 | Open a Corporate Bank Account | After your company has been successfully registered, you’ll need to open a corporate bank account in the company’s name. Most banks will require your presence for verification. Choose a banking partner that aligns with your business needs. |
To reserve your company name and register online, visit the official ACRA BizFile+ portal.
How do you Choose the Right Business Structure in Singapore?
Selecting the proper business structure is a crucial decision when setting up a company in Singapore.
Each structure comes with its own set of advantages and limitations. The right one for you will depend on the nature of your business, your long-term goals, and the level of risk you’re prepared to take on.
Below is a comparison of the most commonly used business structures in Singapore:
| Structure | Suitable For | Legal Identity | Personal Liability |
|---|---|---|---|
| Sole Proprietorship | Small, owner-managed businesses | Not a separate legal entity | The owner bears full personal liability for debts and obligations |
| Limited Liability Partnership (LLP) | Joint ventures with professional firms (e.g. legal, consultancy) | Separate legal entity | Partners are liable only up to their capital contribution |
| Private Limited Company (Pte Ltd) | The most common structure for EP holders and foreign investors | Separate legal entity | Shareholders’ liability is limited to their shareholding |
Among these, the Private Limited (Pte Ltd) structure is the most widely recommended for foreign entrepreneurs and EP holders. It offers limited liability protection, a separate legal identity, and a professional business image—all of which are important for long-term growth and investor confidence. Additionally, it makes it easier to raise capital, attract new partners, and expand both regionally and internationally.
What Documents are Needed to Register a Company in Singapore?
Here’s what you’ll typically need:
- Company name and description of business activities
- NRIC/Passport details of shareholders and directors
- Registered office address
- Constitution of the company
- Consent forms
- Company Secretary appointment (within 6 months of incorporation)
Guide to Company Registration in Singapore: Everything You Need to Know
What are the Ongoing Compliance Obligations for EP Holders in Singapore?
Staying compliant helps avoid fines and protects your company’s status. Your company must:
- Keep proper financial records
- Hold an AGM (if required),
- File annual returns with ACRA.
- Submit corporate tax filings to IRAS.
How is an Employment Pass Different from an EntrePass?
If you’re a foreign national looking to run a business in Singapore, it’s essential to understand the differences between the Employment Pass (EP) and the EntrePass. The Ministry of Manpower issues both, but they serve different purposes. EntrePass is for startup founders and innovators. EP is for professionals moving into business after initial employment.
Here’s a quick comparison:
| Feature | Employment Pass | EntrePass |
|---|---|---|
| Purpose | Skilled employment | Starting a business |
| Salary requirement | Yes | No (but needs a strong business plan) |
| Application timing | After incorporation | Before or shortly after incorporation |
| Family passes | Salary-dependent | Based on business progress |
What Government Support is Available for EP Business Owners in Singapore?
EP holders running businesses may be eligible for:
- Startup SG grants
- Productivity Solutions Grant (PSG)
- Enterprise Development Grant (EDG)
- Start-Up Tax Exemption (SUTE)
- Responsive client support
Check Enterprise Singapore for current funding schemes.
Conclusion
If you’re an EP holder thinking of leaping into business, Singapore offers a solid platform to do so. The city-state welcomes foreign investment, and its regulatory environment makes it relatively straightforward—if you follow the rules.
From obtaining approval to registering your company with ACRA, each step is manageable with the proper guidance. You’ll need to engage a local director, stay compliant, and plan, but with support from a professional firm.
At 3E Accounting Singapore, we help Employment Pass holders to set up and manage businesses in Singapore smoothly and professionally. Could you get in touch today to speak with one of our incorporation specialists?
Would you be ready to get started? Contact 3E Accounting to launch your business the right way.
Incorporating a Business as an EP Holder?
Let 3E Accounting handle the complexities while you focus on building your business. Our team can guide you through every step—from company formation to MOM approvals.
Frequently Asked Questions
Not automatically. EP holders must seek MOM’s approval before taking up any directorship or managerial role in their own company.
In some cases, yes. MOM may issue a Letter of Consent (LOC) allowing EP holders to participate in their company, but this is subject to eligibility and approval.
Yes. Singapore allows full foreign ownership, so an EP holder can own all shares in the business.
Yes, you may be a passive shareholder. However, once you wish to manage or run the company, MOM approval is mandatory.
Processing times vary but generally range from 2 to 6 weeks. It depends on the nature of your business and the quality of your application.
Sectors aligned with Singapore’s economic goals—such as tech, fintech, green energy, and advanced manufacturing—tend to receive more support.
Abigail Yu
Author
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.
