Companies face new rules for employment pass transfers

IMPACT – MEDIUM

What is the change? Companies that seek to transfer employment pass holders to a subsidiary company or group of companies must meet new criteria. If they do not meet these criteria, they must apply for a new employment pass under the name of the new entity.

What does the change mean? Companies will no longer be able to transfer employment pass holders between entities for secondment or career progression purposes by simply notifying the Ministry of Manpower.

• Implementation timeframe: Aug. 1.
• Visas/permits affected: Employment passes.
• Who is affected: Companies with subsidiary or sister entities.
• Impact on processing times: The new regulation requires a new application, which will mean more processing time.
• Business impact: Businesses transferring employment pass holders to subsidiaries now have additional criteria to meet.

Background: Companies may change entity (e.g. from sole proprietorship to private limited company), but the old entity must terminate its registration with the Accounting and Corporate Regulatory Authority if it wants to keep the ability to transfer employment passes. The business activity of the new entity must be the same as the old one and all outstanding levy charges under the old entity must be paid. In addition, at least one of the directors, partners or sole proprietors of the new entity must have been a director, partner or sole proprietor of the old one. Existing passes will not need to be canceled prior to application for the new pass.

BAL Analysis: For transfers of an employment pass holder from one entity to another for secondment or career progression, the new company should apply for a new employment pass as soon as possible.

This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.

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