Singapore tightens rules on hiring for foreign companies

With the recent changes in the law, foreign companies looking to hire expatriates in Singapore face new challenges. The Ministry of Manpower (MOM) has clarified that Employers of Record (EORs) will no longer be able to sponsor work permits for foreign employees.

EORs, which played a major role in helping foreign companies find employment in Singapore, can now only help with the hiring of local talent. In the past, EORs allowed foreign companies to hire foreign workers by handling all the administrative tasks. The EOR sector in Singapore is worth $1.9 billion and is expected to double by 2030. However, with the new restrictions, foreign companies need to rethink their strategies.

Under the new rules, expatriates who want to continue working in Singapore must be hired directly by a local business. Foreign companies that have traditionally relied on EORs will need to set up a Singapore legal entity to sponsor work passes for their overseas employees.

These changes come amid broader changes to Singapore’s employment policies. Since September, expatriates on work visas have been subject to stricter criteria under a new points-based system. The change is aimed at promoting fair employment practices and addressing employment concerns for locals.

While the new rules pose challenges for foreign companies, MOM provides alternatives such as setting up a representative office through the Enterprise Singapore scheme or registering a company with the Accounting and Corporate Regulatory Authority (ACRA). In addition, foreign professionals can apply for a Short-Term Visit Pass (STVP) for business-related activities like attending meetings, valid for up to 90 days per year.