MOM puts new rules in place for companies appointing employment pass holders as directors

IMPACT – MEDIUM

What is the change? Singapore has instituted a requirement that employers seeking to appoint employment pass holders from another company to their board of directors must first obtain a letter of consent from the Ministry of Manpower.

What does the change mean? The ministry has said it will generally grant letters of consent in these circumstances if (1) the company is “related by shareholding” to the employment pass holder’s employer and (2) the pass holder’s appointment is related to his or her primary employment in Singapore.

• Implementation time frame: Immediate and ongoing.
• Who is affected: Employers seeking to appoint employment pass holders to their board of directors.
• Impact on processing times: The ministry says requests for letters of consent are processed within five weeks.
• Business impact: The requirement adds administrative steps and additional time to the process of appointing an employment pass holder to a company’s board of directors.

Background: The change was recently announced and will apply retroactively as well as prospectively, i.e., companies with employment pass holders from other companies already serving on their board of directors must apply for a consent letter for that pass holder. Letters of consent must be renewed whenever employment passes are renewed in order for the employee to continue serving as a company director.

B·A·L Analysis: BAL is able to assist employers seeking to appoint an employment pass holder to their board of directors by helping submit applications for letters of consent.

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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