How Foreigners Can Start a Business and Get an Employment Pass in Singapore

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Singapore is one of the world’s most attractive destinations for foreign entrepreneurs. With its pro-business environment, strong legal framework, low corporate tax rates, world-class infrastructure, and political stability, the country is frequently ranked as one of the easiest places to start and grow a business.

Because of these advantages, thousands of foreigners incorporate Singapore companies each year. Many of them also wish to relocate to Singapore to run the business, and the most common work visa route is the Employment Pass (EP).

But how exactly does a foreigner start a business in Singapore, and what steps are needed to successfully obtain an EP? This comprehensive guide explains the entire process—from company incorporation to preparing a strong EP application—and outlines what MOM (Ministry of Manpower) looks for.

1. Yes, Foreigners Can Start a Business in Singapore

Singapore welcomes foreign entrepreneurs. A foreigner can own 100% of a company incorporated in Singapore. You do not need to be a permanent resident (PR) or citizen.

However, you cannot self-register the company. You must engage a licensed corporate services provider (CSP) to incorporate it on your behalf.

Foreigners can:

  • Own 100% of the shares
  • Be a director (with or without a work pass)
  • Hire staff (locals or foreigners)
  • Operate any legal business
  • Open bank accounts (subject to due diligence)

Foreigners cannot:

  • Self-incorporate a company on ACRA
  • Work in the company without a work pass
  • Act as a local director without a valid pass

To run the business physically in Singapore, a foreigner must hold either:

  • An Employment Pass (EP)
  • An EntrePass
  • Or appoint a local resident director while staying overseas

For most business owners who want to operate their company locally, the EP is the preferred route.

2. Which Work Pass Is Suitable for Foreign Entrepreneurs?

1. Employment Pass (EP)

Best for entrepreneurs or business owners who have:

  • Professional qualifications
  • Strong work experience
  • Clear business roles (e.g., CEO, COO, Director)
  • Ability to draw a salary that meets EP criteria

2. EntrePass

Best for:

  • Venture-backed startups
  • Tech founders
  • Innovative business models
  • Those requiring government agency support (Enterprise Singapore)

EntrePass has stricter requirements. Most foreigners prefer the EP route unless their business qualifies under the innovative startup criteria.

This article focuses on the Employment Pass pathway.

3. Step-by-Step Guide: How Foreigners Can Start a Business in Singapore

To apply for an EP, you must first set up your company.

Step 1: Choose a Business Structure

Most foreign entrepreneurs choose a Private Limited Company (Pte Ltd) because:

  • It is the most tax-efficient
  • It provides limited liability
  • It looks credible to banks and clients
  • It is eligible for government incentives
  • It allows easier EP application

Step 2: Engage a Corporate Services Provider (CSP)

Foreigners cannot self-register a company. A CSP helps with:

  • Incorporation
  • Nominee director services
  • Registered address
  • Corporate secretarial services
  • Filing compliance
  • EP application assistance

Choose a provider with experience in EP applications for new companies.

Step 3: Choose a Company Name and Register With ACRA

The name must be:

  • Unique
  • Not identical to existing businesses
  • Not offensive
  • Not restricted unless required licenses are obtained

Once approved, the CSP proceeds with incorporation.

Step 4: Decide Shareholding and Paid-Up Capital

You can own 100% of the company.

Paid-up capital recommendation:

  • Minimum required: S$1
  • Recommended for EP approval: S$50,000 to S$100,000

Higher paid-up capital helps demonstrate:

  • Financial stability
  • Ability to pay EP salary
  • Commitment to building a real business

It is one of the most important factors for EP success for new companies.

Step 5: Appoint Directors

You need at least:

  • One local director (Singapore citizen, PR, or EP holder)

Foreigners can be directors after their EP is approved.

If you don’t have a local partner, your CSP will offer a nominee director service temporarily.

Step 6: Open a Corporate Bank Account

Banks will conduct due diligence. You may need:

  • Passport
  • Proof of address
  • Bank statements
  • Explanation of business activities
  • Business plan
  • Details of shareholders

Some banks allow video verification; others require physical presence.

Step 7: Prepare the Company for EP Application

Once the company is incorporated, you must strengthen the company profile before applying for the EP.

This includes:

  • Building a professional website
  • Creating marketing materials
  • Drafting a strong business plan
  • Preparing a detailed job description
  • Signing partners/clients (if possible)
  • Injecting adequate paid-up capital
  • Setting up business operations

The stronger your company looks, the higher the EP approval chances.

4. Step-by-Step Guide: How Foreigners Can Get an Employment Pass Through Their New Company

Once the business is incorporated and operational groundwork is done, you can proceed to applying for the EP.

Step 1: Prepare a Strong Job Description

MOM evaluates the job scope closely. It must show:

  • Specialist, technical, or managerial duties
  • Strategic contributions
  • Justification for a foreigner
  • Alignment with your background

Avoid generic job scopes (e.g., “handle marketing” or “manage sales”).

Your job description must clearly explain why you are essential to the business.

Step 2: Meet Salary Requirements

Salary is a major factor under the COMPASS framework.

General guidelines:

  • Minimum salary: S$5,600 for young applicants
  • Mid-career: S$8,000–S$12,000
  • Senior roles: S$12,000–S$18,000

For founders applying as CEO/Director, the salary must match seniority.

Step 3: Prepare a Strong Business Plan

A business plan is critical for EP approval for new companies.

It should include:

  • Executive summary
  • Company overview
  • Market analysis
  • Products/services
  • Financial projections
  • Hiring plans
  • Applicant’s role and justification

This demonstrates business viability and the need for the applicant to relocate.

Step 4: Strengthen Company Profile With Supporting Documents

Include documents such as:

  • Paid-up capital evidence
  • Website screenshots
  • Sales leads or contracts
  • Letters of intent
  • Partner agreements
  • Marketing materials
  • Organisation chart
  • Technology stack or workflow diagrams

These prove to MOM that the business is genuine and operational.

Step 5: Submit the EP Application Through EP Online

The CSP will submit:

  • Job description
  • Salary
  • Applicant details
  • Supporting documents

EP processing typically takes:

  • 3 weeks to 8 weeks
  • Delays possible if MOM requests more documents

Step 6: Respond to MOM’s Queries Promptly

MOM may ask for:

  • More details on business activities
  • Applicant’s employment history
  • Proof of company operations
  • Financial projections
  • Clarification on salary justification

Respond quickly and thoroughly to avoid delay or rejection.

5. What MOM Looks for in EP Applications From Foreign-Owned Companies

MOM applies stricter scrutiny to new or foreign-owned companies.

Here’s what they evaluate:

A. Business Viability

Is the business real and capable of revenue generation?

B. Financial Strength

Does the company have sufficient capital to support operations and pay salaries?

Paid-up capital below S$10,000 is a red flag.

C. Role Justification

Is the applicant essential to the company?

D. Applicant Quality

Does the applicant have the qualifications and experience required?

E. COMPASS Score

Salary, qualifications, diversity, and local employment support must meet standards.

F. Contribution to Singapore’s Economy

Will the company hire locals or create economic value?

6. Tips to Improve EP Approval Chances for Foreign Entrepreneurs

EP applications from new companies face stricter evaluation, but success is achievable if the company demonstrates credibility.

Below are proven strategies to strengthen your application:

Tip 1: Inject Adequate Paid-Up Capital

At least S$50,000 is recommended.
Higher capital = higher business credibility.

Tip 2: Build a Professional Website

A poor website makes your company look non-operational.

Tip 3: Prepare a High-Quality Business Plan

This is one of the most powerful supporting documents.

Tip 4: Provide Proof of Business Activity

Contracts, emails to clients, and partnership agreements help tremendously.

Tip 5: Create a Strong Job Scope

Define strategic and specialised duties only you can perform.

Tip 6: Increase Your Salary (If Necessary)

Salary affects COMPASS scoring and perceived seniority.

Tip 7: Hire Local Staff (If Possible)

This improves the company’s local workforce ratio under COMPASS.

Tip 8: Show Regional or Global Responsibilities

This strongly justifies why a foreign professional is needed.

Tip 9: Highlight Your Achievements

Certifications, awards, regional experience, or large-scale project experience strengthen your profile.

Tip 10: Work With an Experienced Corporate Services Provider

They understand MOM’s expectations and can prepare a compelling submission.

7. What Happens If the EP Is Rejected?

Rejection is not the end. You can:

✔ Submit an appeal

With stronger documents and justifications.

✔ Reapply** after strengthening company profile

Especially if the company needs time to build operations.

Common reasons for rejection include:

  • Salary too low
  • Weak job scope
  • Insufficient business activity
  • Applicant not qualified for role
  • Low paid-up capital
  • Poor COMPASS score

An appeal should address all weaknesses thoroughly.

8. Advantages of Starting a Business and Getting EP Through Singapore

Foreign entrepreneurs benefit from:

1. Strong global reputation

Singapore is a respected business hub.

2. Low corporate tax

Only 17%, with many tax incentives.

3. Gateway to Asia

Proximity to regional markets.

4. Political stability

A safe base for long-term planning.

5. Ease of doing business

Fast incorporation and clear regulations.

6. Pathway to long-term residence

After a successful business track record, you may apply for PR.

Conclusion

Foreigners can absolutely start a business in Singapore and obtain an Employment Pass to run it—but success depends heavily on preparation, documentation, and credibility.

To successfully start a business and get an EP, you must:

  • Incorporate a Private Limited Company
  • Inject adequate paid-up capital
  • Prepare a detailed and convincing business plan
  • Build a strong job description
  • Meet salary expectations
  • Demonstrate business viability
  • Justify why you (the foreigner) are essential to the company
  • Strengthen your COMPASS score
  • Provide evidence of business activity
  • Work with a professional CSP if needed

When these elements are done correctly, foreigners can secure EP approval and build a successful business presence in Singapore.

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