In the dynamic business landscape of Singapore, many Employment Pass (EP) holders seek opportunities to contribute their expertise beyond their primary employment. A common avenue for this is taking up secondary directorship appointments in other companies. However, there are specific regulations and requirements EP holders must adhere to, as outlined by the Ministry of Manpower (MOM).
Understanding Secondary Directorships
EP holders are generally permitted to work only for their primary employer as specified on their work pass. When they wish to undertake directorship appointments—whether executive or non-executive—in other companies, they need to discharge their duties in accordance with the Companies Act. This activity is considered a form of work that requires proper authorization through a work pass.
Letter of Consent (LOC) Requirement
To take up secondary directorship appointments, EP holders must apply for and obtain a Letter of Consent (LOC) under Regulation 11 of the Employment of Foreign Manpower (Work Passes) Regulations 2012. The LOC acts as formal permission allowing EP holders to engage in directorship duties for companies other than their primary employer.
Directorships in Related Companies
MOM is generally accommodating when it comes to EP holders taking secondary directorships in related companies. The relationships considered relevant include:
Directorships in Companies Related by Corporate Shareholding: If the secondary company is related to the primary employer through direct or indirect corporate shareholding, an LOC is typically granted. This provision ensures that EP holders can fulfill roles that might be crucial for their primary job. Examples:
Scenario 1: An EP holder working for Company B (a subsidiary of Company A) can be granted an LOC to serve as a director in Company C (another subsidiary of Company A).
Scenario 2: An EP holder in a primary employer that is a holding company (Company A) can receive an LOC to be a director in any of its direct or indirect subsidiaries (Company B).
In such cases, the company requesting the EP holder’s directorship must provide MOM with an organizational chart detailing the relationship between the primary employer and the secondary company.
Directorships in Unrelated Companies
When the secondary directorship appointment is in an unrelated company, the process involves additional scrutiny:
Sector Government Agency Support: For secondary directorships in unrelated companies, MOM looks for the endorsement from the relevant sector government agency that regulates or promotes the development of the industry. For example, the Monetary Authority of Singapore (MAS) might support an EP holder working for a fund manager to take on a directorship in one of their investment vehicles.
Exceptional Cases: In exceptional situations, an LOC might be granted if the EP holder holds a sufficiently senior position or has a significant ownership stake in the secondary company. Each application is assessed on its merits, and relevant information must be provided to MOM for evaluation.
Conclusion on taking up Secondary Directorships for Employment Pass Holders.
For EP holders in Singapore, taking up secondary directorship appointments is a viable option, provided they navigate the regulatory requirements diligently. The MOM’s guidelines aim to balance the flexibility for EP holders to contribute their skills across various entities while ensuring compliance with work pass regulations. By securing the necessary LOC, EP holders can broaden their professional influence and support the growth and development of multiple businesses within Singapore’s robust corporate framework.
With Account-Ink Pte Ltd’s expert assistance, the process becomes more straightforward, allowing EP holders and their employers to focus on maximizing their business potential.
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