Can an Employment Pass Holder Start a Business in Singapore?

If you’re working in Singapore on an Employment Pass (EP) and wondering whether you can start your own company, the short answer is yes — under the right conditions.

Singapore’s pro-business environment lets foreigners own 100% of a company and register one in just a few days. But if you’re already employed under an EP, there are rules on how you can do it, especially around becoming a director, obtaining Ministry of Manpower (MOM) approval, and meeting the resident director requirement.

In this guide, we’ll explain what EP holders can and can’t do when starting a business in Singapore, the steps involved, and how to stay compliant.

We’ll also show how a Wise Business account can streamline payments once your company is operational, from receiving client funds abroad to making payments to suppliers in their local currencies.

Table of contents
The role of an Employment Pass holder What the Employment Pass allows Key restrictions for EP holders Approvals and legal requirements for EP holders in Singapore Steps to register a company as an EP holder Pathways to entrepreneurship for the EP holder Compliance requirements and common challenges for EP founders

The role of an Employment Pass holder

What the Employment Pass allows

An Employment Pass (EP) is Singapore’s primary work visa for foreign professionals, managers, and executives who have a local job offer¹.

To qualify, you must meet a minimum salary (currently SGD 5,600 for most sectors and SGD 6,200 for financial services) and pass the COMPASS assessment, which evaluates salary, education, and your employer’s profile².

While your EP is tied to your employer, you can still own shares in a Singapore company³.

Many foreigners hold minority stakes or invest in startups while continuing their main employment. However, once you want to manage or direct that company, different rules apply.

Key restrictions for EP holders

You can be a shareholder or investor. EP holders may own up to 100% of a Singapore private limited company, but …

• You can’t be a director without approval. Your EP is tied to one employer. To serve as a director elsewhere, the company must get MOM approval through a Letter of Consent (LOC) or sponsor a new EP.⁴
• You can’t operate as a sole proprietor or partner. Self-employment isn’t permitted under the EP; foreigners must apply for an EntrePass instead⁵.
• You need to follow fair-hiring rules. If your company hires foreign staff, you must comply with the Fair Consideration Framework by advertising on MyCareersFuture for at least 14 days before filing EP applications.⁶

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Approvals and legal requirements for EP holders in Singapore

Starting a company in Singapore as an EP holder is possible, but MOM sets clear boundaries on what’s allowed.

When MOM approval is needed

If you’re keeping your current job but want to join a second company, that company must apply for MOM approval, usually through a Letter of Consent (LOC)⁷. MOM may request a short business plan outlining your role and the company’s activities. Skipping this step can breach your EP conditions and risk cancellation or fines.

Appointing a resident director

Every company must have at least one director “ordinarily resident” in Singapore — either a Citizen, PR, or eligible pass holder⁸. If you’re employed elsewhere on an EP, you can’t hold this role until MOM approves your directorship.

Many founders use a nominee director temporarily to meet the Companies Act requirement.

Other approvals and licences

Certain sectors also require additional licenses, such as import/export, food and beverage (F&B), or professional services. You can confirm industry-specific requirements on the GoBusiness Licensing portal⁹.

Steps to register a company as an EP holder

Once you’ve confirmed your eligibility and any required MOM approvals, the next step is to officially register your company with the Accounting and Corporate Regulatory Authority (ACRA).

Choosing a business structure

Foreigners can choose several entity types, but most EP holders opt for a private limited company (Pte Ltd) for flexibility and limited liability¹⁰.

• Pte Ltd: Separate legal entity and preferred for growth or fundraising.
• LLP (Limited liability partnership): Suits professionals who share profits directly, but partners are taxed personally.
• Sole proprietorship: Not allowed for EP holders, as it counts as self-employment.

Registering your company with ACRA

Company registration happens entirely online through BizFile+, ACRA’s digital platform¹¹.

1. Reserve your company name. Most names are approved instantly; however, regulated industries may require additional processing time.
2. Submit company details and documents. Provide your address, business activity (SSIC), and particulars of shareholders, directors, and secretary.
3. File through a Corporate Service Provider (CSP) if you prefer professional help.
4. Receive your incorporation documents. ACRA issues a Certificate of Incorporation and Business Profile — typically within one to three business days.

Preparing required documents

To register smoothly, gather the following:

• Company constitution
• Shareholder and director details and written consents
• Company secretary appointment (within six months of incorporation)¹²
• Paid-up capital (minimum SGD 1; practical amounts are higher for credibility)¹³

Opening a corporate bank account

After incorporation, open a corporate account for payments and payroll.

Banks conduct due diligence checks, so prepare your ACRA Business Profile, company constitution, and ID documents for all directors and shareholders.

Traditional banks may take weeks to process applications, especially for foreign-owned companies. If speed and global payments matter, consider a digital multi-currency account that can be opened online.

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Pathways to entrepreneurship for the EP holder

EP holders can take two main routes into entrepreneurship: becoming a full-time founder or a passive investor.

Active management as a full-time entrepreneur

If you plan to run your company day-to-day, you’ll need to change your work arrangement. The typical sequence is:

1. Incorporate your company (using a nominee director temporarily to meet ACRA’s resident-director rule).
2. Have the company sponsor your new EP. MOM reviews salary, credentials, and a brief business plan to confirm it’s a genuine operation.
3. Switch your EP once approved, resign from your old employer, and become the company’s executive director.

Ownership with limited involvement

Do you prefer to keep your current job but invest in another business? You can own shares in a Singapore company, but cannot manage it without MOM’s consent (via a Letter of Consent). A separate resident director is still required.

This setup suits investors or professionals who are exploring side ventures without leaving their full-time employment.

Compliance requirements and common challenges for EP founders

Starting your company is only the beginning — staying compliant is where many new founders slip up. As an EP holder, you’ll need to follow the same ongoing rules as any other Singapore-registered business, plus a few extra steps to keep MOM satisfied.

Ongoing legal obligations

Singapore makes compliance relatively straightforward, but it’s still worth knowing your annual must-dos:

• Appoint a company secretary¹². You must appoint a qualified secretary within six months of incorporation. They’ll help ensure all filings, minutes, and statutory registers are maintained correctly.
• File annual returns¹⁴. Every private limited company must file its annual return with ACRA within seven months of the financial year end. This confirms that your company’s records are up to date.
• Maintain proper accounting records. The Companies Act requires businesses to keep accounting and transaction records for at least five years¹⁵. These records will support your tax filings with IRAS.
• Hold an AGM or file an exemption¹⁴. Most companies must hold an Annual General Meeting (AGM) unless they’ve opted for an exemption and lodged unaudited financial statements online.

Common challenges

Even seasoned professionals can run into roadblocks. Here are a few to plan for:

• Nominee director risks. While a nominee helps satisfy the resident director rule, they share legal liability. Always use a trusted professional or someone with a formal service agreement.
• Bank account verification delays. Local banks often need additional Know Your Customer (KYC) checks for foreign directors. Plan for possible delays of a few weeks before full activation.
• Misunderstanding MOM boundaries. The biggest mistake new EP entrepreneurs make? Running operations for a new company without formal MOM approval. Always secure the right pass or LOC first.
• Tax and record-keeping gaps. IRAS can impose fines for incomplete or late filings. Set up proper accounting from day one — it’s also essential for renewing your EP under your new company later.

Government support and incentives

Singapore’s pro-business policies mean there’s plenty of help available, even for foreign founders:

Startup tax exemption (SUTE)

Eligible new companies enjoy 75% tax exemption on the first SGD 100,000 of normal chargeable income and 50% on the next SGD 100,000 for their first three years of assessment¹⁶.

Partial tax exemption (PTE)

After your first three years, companies automatically receive partial relief on taxable income each year¹⁶.

Innovation and productivity grants

Agencies like Enterprise Singapore offer funding and consultancy schemes for projects related to digital transformation, research and development, and international expansion.

➡️ For a detailed breakdown of available government grants — including PSG, EDG, and MRA — check out our comprehensive guide to Singapore startup grants.

If your business focuses on deep tech or research, the Startup SG Tech Grant supports Proof-of-Concept (POC) and Proof-of-Value (POV) projects with funding of up to SGD 800,000.

First-time founders can also explore the Startup SG Founder Grant for mentorship and capital matching support. And if you’re scaling beyond the startup stage, our guide to SME funding in Singapore outlines additional schemes available to growing businesses.

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So, can an EP holder start a business in Singapore?

Absolutely. With the proper approvals, structure, and compliance support, it’s not just possible; it’s one of the most straightforward places in Asia for foreigners to build something of their own.

The key is to approach it in stages:

1. Clarify your role: shareholder, director, or both.
2. Get MOM approval if you plan to run the company full-time.
3. Incorporate with ACRA, appoint a resident director, and set up your corporate account.
4. Stay compliant with filings, taxes, and record-keeping from the start.

Once your company is up and running, you’ll also want a reliable way to handle global payments, whether you’re billing clients in the United States, paying suppliers in Europe, or managing remote freelancers.

That’s where Wise Business helps simplify the global side of entrepreneurship. You can hold, send, and receive 40+ currencies, pay international invoices at the mid-market exchange rate with a low, transparent conversion fee, and connect your Wise Business cards for streamlined team spending — all from one account.

➡️Get started with Wise Business today.

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Sources:

1. MOM Key facts on Employment Pass
2. MOM Eligibility for Employment Pass
3. MOM FAQ Shareholder
4. MOM FAQ Director
5. ACRA Sole proprietorship or partnership
6. MOM Fair Consideration Framework
7. MOM Taking up secondary directorship
8. ACRA Requirements for local residency
9. GoBusiness Licensing
10. ACRA Comparison of business entities in Singapore
11. ACRA Setting up a local company
12. ACRA Appointing directors, company secretary, and other key personnel
13. ACRA Share capital
14. ACRA What you have to file
15. ACRA Companies Act
16. IRAS Corporate income tax rate, rebates, and tax exemption schemes

Sources checked on 8 October 2025