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Can I become a director in another company while I am already on EP for one company?

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Can Employment Pass Holder become Director of a Singapore Company?

Singapore offers excellent career opportunities to both locals and foreigners. Foreigners who wish to work in Singapore need to obtain an EP (Employment Pass). The employer Company sponsors the Employment Pass of the employee. Hence, the EP serves as a work permit for the respective employer only.

Taking up a secondary directorship while on EP

MOM (Ministry of Manpower) is the governing body that implements and formulates labor policies in Singapore. A foreign candidate must seek MOM's approval before applying for any role in a Singapore company.

A person who is already on EP for one company can hold a directorial position in another company under some exceptional circumstances.

Overview

  • A LOC (Letter of Consent) must be secured from the MOM before taking up the directorship
  • The employer who wants to appoint the EP holder must apply for the LOC
  • The application takes five weeks to process

A person can be offered a secondary directorship in a related company if that role is critical for performance of the EP holder’s job. However, the success of one's application depends on several factors.

Taking up the directorship in a related company

For related companies like a subsidiary, MOM recognizes that a secondary directorship position can be crucial to the Employment Pass holder's job role. The EP pass holder who is appointed to the Board of Directors must carry out one's directorship duties as per the Singapore Companies Act.

The employer has to fulfill the following requirements.

  • Ensure that the EP holder has no objections to taking up the new directorship role
  • Apply for a LOC and get MOM's approval
  • If the application is approved, the directorship position must be registered with ACRA
Company incorporation - Related company

Conditions for approval

MOM will grant a LOC under the following conditions:

  • Employer's company and the EP holder's company are related by shareholding. ACRA records must reflect it.
  • The purpose of taking on secondary directorship must be related to the EP pass holder's primary employment.

Taking up the directorship in an unrelated company

Company incorporation - Unrelated company

In such a situation, a LOC can only be granted if the directorship position is relevant to the EP holder's primary occupation. However, chances for obtaining a LOC even in such instances are quite slim. In general if there are no compelling reasons relevant for the first employment then such a role will not be approved.

EP holder as a nominee director

Company incorporation - Nominee director

A LOC is only granted if the EP holder's company and the employer's company are related by shareholding. Therefore, an EP holder can't act as a nominee director in a company that is not associated with his/her company by shareholding.

This is due to the law that EP directors cannot hold multiple jobs. As a company's director, one must discharge specific duties that are considered a form of work. Hence, it is not legal for an EP holder to act as a nominee director of any Singapore company.

Conclusion

An EP holder can't serve as a director in an unrelated company. For a related company, the employer must seek a LOC from the MOM. Only after obtaining a LOC, an EP holder can take the role of a secondary directorship. An EP holder cannot serve as a nominee director as it is legally not permitted.

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