As the premiere financial hub of Southeast Asia, Singapore continuously works to attract the globe’s top talent, savvy entrepreneurs chief among them. While Singapore offers a conventional, passive residence-by-investment route through the Global Investor Program, this route – which now has a minimum investment requirement of some US$7.4 million – is prohibitively expensive for most. Through the Entrepass Program, Singapore also offers an active investor visa, but this is specifically aimed at innovative startups that obtain funding from government-recognized VC or Angel funds.
There is, however, a simpler, often overlooked route to residency for entrepreneurs in Singapore: Residency by employment in your own company through the Singaporean Employment Pass (EP) Visa.
Business owners have long used the EP, predominantly a work visa, to gain residency in Singapore. Entrepreneurs need only register a company in Singapore and have it employ them, allowing them to submit an EP application that grants a two-year residence permit.
By taking advantage of the EP route, business owners could easily benefit from Singapore’s low tax environment and world-class talent pool.
The EP has proven a popular immigration channel and a stable source of talent for Singapore.
A new points-based system
Last year, the Singaporean government refined the EP qualification criteria. While, in previous years, the government raised the minimum salary needed to issue an EP, it took a further step in 2022 by introducing a new points-based scheme, dubbed the Complementary Assessment (Compass) Framework, consisting of four criteria, which will come into effect on the first day of September 2023.
This update raises questions about how entrepreneurs can continue to qualify through a system primarily designed to attract top professionals rather than investors. To better understand that, take a closer look at the Compass factors set by the government:
Compass Factor One - High Salaries
The first Compass criterion entrepreneurs can easily meet is a high salary. Since the business owner is effectively hiring himself through his own company, he can theoretically give himself any salary he deems fit. This allows him to easily achieve this criterion and gain the maximum number of points.
Compass Factor Two - Qualification
The second qualification criterion is based on academic credentials. Those with a "Degree Equivalent Qualification" can get ten points, while "First Tier Institution" credentials can obtain a maximum of 20 points.
Those without a relevant degree always can enroll in a course at local Singaporean universities to make up some points.
Compass Factor Three - Diversity
The third factor focuses on diversity hiring, allowing business owners to gain more points if they hire more employees with diverse ethnicities and nationalities. A business owner gains points by hiring employees with different nationalities, increasing the overall diversity of the company staff. The more diverse, the more points available, for a maximum of 20 points.
For companies looking to expand, this is an easy criterion to meet. It may take more targeted recruitment, but the extraordinarily diverse population of Singapore makes it an easy task.
Compass Factor 4 - Local employment
One of the main objectives of any government in attracting foreign investors is to stimulate local employment, which is also the case under Singapore's EP.
The more staff a firm hires, the more points they get, with a maximum of 20 points available. Entrepreneurs have a good chance of getting those points depending on the nature and size of their new business.
A simple route for entrepreneurs
The new EP points system also provides "bonus points" for those who operate within the government's key industry (shortage) list, which includes PPPs working on ambitious investments, innovation, internationalization, or business and workforce transformation activities.
The four Compass factors are quite simple, and entrepreneurs should have an easy time collecting the required points to meet the minimum requirement, as achieving a high salary is entirely in their hands, while hiring staff opens the door for them to obtain points from two different Compass factors.
A solid education pedigree is preferred, but it is not compulsory, and entrepreneurs can make up the points elsewhere, especially if they operate in one of the key shortage areas.
Singapore is one of the world's most attractive destinations, especially for those who aim to do business on a global scale from within one of the world's most vital economic hubs. The EP Compass scheme makes that possible, and applying is much easier than many think.
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Hannah graduated from Renmin University, one of the top universities in China, with Bachelor degree majoring in English Literature. She joined Globevisa in 2008 and worked in Managing position for more than ten years.
Unique relocation experience from Beijing, Hong Kong, and Singapore has enriched her with empathy of global clients demands.
She was the key person to build up several offices including Singapore, UAE, Turkey, and Vietnam. And her major responsibility is to develop global awareness of Globevisa.