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).
The MOM will generally grant the LOC to the EP holder if
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.
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.
The MOM will take approximately five weeks to process each request, and retains the discretion to call for additional supporting documents for further review.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the author, Kim Seng Lo.