The Singapore Ministry of Manpower now requires Employment Pass holders to obtain a Letter of Consent before taking up external directorships with other entities.

As part of Singapore’s pro-business regulations, an Employment Pass (EP) allows foreign professionals, managers, and executives to work in Singapore. Eligibility requirements for such foreign professionals include a minimum salary and qualification threshold.

The Ministry of Manpower (MOM) introduced a new rule—effective from 7 November 2016—requiring EP holders to obtain a Letter of Consent (LOC ) before taking up external directorships with other entities.

Presently, an EP holder is only allowed to work for the employer specified on his or her EP and can be appointed to the board of directors of that employer without having to notify the MOM. However, it is possible for EP holders to take up additional directorship positions in other companies (e.g., in a subsidiary) if it is critical to the EP holder’s job role. In this scenario, the MOM needs to be notified and its approval obtained before the EP holder is able to take up the additional appointment(s).

Criteria

The MOM will generally grant the LOC to the EP holder if

  • there is a shareholding relationship between the EP holder’s employer and the other company; or
  • the EP holder is appointed to the board of directors of the other company for purposes related to the individual’s primary employment.

Nevertheless, it is notable that even if the additional directorship is in an unrelated company (e.g., a fund entity), the LOC may still be granted if such directorship is relevant to the EP holder’s primary occupation.

Steps to Obtain Approval

  1. EP holder’s employer confirms that it has no objection to the EP holder taking up a directorship with the applicant company in question.
  2. Applicant company submits a scanned copy of the completed Request Form to the MOM via its iSubmit portal.
  3. Applicant company sets out the EP holder’s proposed responsibilities.
  4. Applicant company ensures that it has updated its shareholding records with the Accounting and Corporate Regulatory Authority (ACRA).

Companies that have already appointed non-employee EP holders to their boards of directors without obtaining the requisite LOC should complete and submit the Request Form to the MOM at the earliest opportunity.

Timeline

The MOM will take approximately five weeks to process each request, and retains the discretion to call for additional supporting documents for further review.

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