Letter of Consent vs. Employment Pass in Singapore: Which Work Visa Is Best for Entrepreneurs?

For entrepreneurs looking to work in Singapore, choosing the right visa is crucial. The Employment Pass (EP) and Letter of Consent (LOC) are two common options, each with different eligibility criteria and benefits. Understanding these differences will help you make an informed decision.

1. Employment Pass (EP)

Who is Eligible?

• Foreign professionals with a job offer in Singapore.
• Must earn a minimum salary of SGD 5,600 per month (non-financial sectors) or SGD 6,200 per month (financial sector).
• Candidates must meet MOM’s Complementarity Assessment Framework (COMPASS) criteria unless their fixed monthly salary is at least SGD 22,500, which exempts them from COMPASS.
• Applicants should have acceptable qualifications, such as a recognised degree or professional certification.

Key Considerations

• The COMPASS framework evaluates EP applications based on individual and employer-related attributes, requiring at least 40 points to qualify.
• EP holders can apply for a Dependant’s Pass for their spouse and children.
• It is valid for up to 2 years and renewable for up to 3 years.

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2. Letter of Consent (LOC)

Who is Eligible?

• Long-Term Visit Pass (LTVP) or LTVP+ holders who are married to a Singapore citizen or PR.
• Unmarried children (under 21 years old) of a Singapore citizen or PR.
• The LTVP or LTVP+ must be valid for at least three months at the time of application.
• Applicants must have a confirmed job offer from a Singapore employer.

Key Considerations

• Dependant’s Pass (DP) holders are no longer eligible for an LOC as of 1 May 2021. They must now apply for a Work Permit, S Pass, or Employment Pass to work in Singapore.
• LOCs are linked to specific employers, meaning a new LOC application is needed if changing jobs.
• The LOC remains valid as long as the LTVP or LTVP+ is in effect and the applicant remains employed.

3. Which Work Visa Should Entrepreneurs Choose?

If you are an entrepreneur looking to start a business in Singapore, the Employment Pass is the preferred option. The EP allows business owners to work and reside in Singapore while being eligible for dependants’ passes. However, securing an EP can be more challenging due to the COMPASS framework and salary requirements.

On the other hand, if you are a foreign spouse of a Singapore citizen or PR, the LOC offers a simpler path to employment without needing to meet EP salary requirements. However, the LOC is employer-dependent, limiting flexibility.

Summary

Choosing between an Employment Pass and a Letter of Consent depends on your individual situation. Entrepreneurs who plan to incorporate a business in Singapore will generally find the EP to be a better long-term solution, while foreign spouses may benefit from the LOC’s simpler approval process. Understanding these distinctions will help you navigate Singapore’s work visa options effectively.

By staying informed about these regulations, SMEs and entrepreneurs can make strategic hiring and business decisions while remaining compliant with Singapore’s employment laws.

Using a Company Incorporation Service as an extension of your team

Navigating the complexities of the EP application process can be challenging. At Counto, we excel in streamlining this journey for SMEs and entrepreneurs. Our dedicated team offers comprehensive support, from company incorporation to facilitating your EP application through a trusted employment agent. Speak to us directly on our chatbot, email [email protected], or use our  contact form to get started.

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