Introduction

Singapore has established itself as a leading jurisdiction for family offices through a combination of attractive tax incentives schemes administered by the Monetary Authority of Singapore (“MAS”), clear and robust regulatory framework, and a stable business environment as a global financial hub. However, the pathway for foreign investment professionals (“IPs”) in single‑family offices (“SFOs”) to secure or renew an Employment Pass (“EP”) is not without its difficulties. These challenges are often more pronounced for SFOs because of the SFO’s unique characteristics: smaller scale, less traditional business metrics, narrow investment‑only mandates, and a shorter track record compared to larger firms and/or more established operating businesses. This is a key issue as one of the conditions for tax exemption under Sections 13O and 13U of the Income Tax Act is that the SFO has to ensure it has either 2 (for Section 13O) or 3 IPs (for Section 13U) at all times. This article sets out the key challenges and practical implications for EP renewals, specifically for foreign IPs employed under SFOs.

EP Application Framework  

All EP applications are processed by the Ministry of Manpower (“MOM”) and are assessed under the Complementarity Assessment Framework (“COMPASS”) which is a points-based evaluation tool. Currently, those looking to apply for an EP will need to meet the minimum salary requirement of at least S$5,600 per month (and at least S$6,200 per month for financial services, both of which increases progressively with age), work in a managerial, executive or specialised job and have acceptable qualifications from accredited institutions. The COMPASS framework requires EP candidates to meet the minimum qualifying salary at the first stage, but at the second stage, additional criteria evaluate the applicant’s salary and qualifications, and the employer’s nationality diversity and support for local employment with a points-based scoring system.

Candidates are exempted from COMPASS if they (i) earn at least S$22,500 fixed monthly salary, (ii) are applying as an overseas intra-corporate transferee under the World Trade Organisation’s General Agreement on Trade in Services or an applicable Free Trade Agreement that Singapore is a party to, OR (iii) are filling a role for 1 month or less.

Navigating the Challenges of EP Renewal

Aside from having to pass COMPASS when applying for an EP in the first instance, EP renewals are also subject to passing COMPASS, including meeting the qualifying salary. Employers must update the company’s financial information, including turnover data for the last 3 years, before being able to renew an EP. An application to renew an EP can be submitted up to 6 months before the current EP expires.

Passing COMPASS Salary Criterion

Based on MOM’s website, the EP qualifying salary would increase next year across all sectors, including the financial services sector in which SFOs are categorised under. IPs must ensure their compensation package under the SFO is aligned, as some may have variable remuneration packages rather than fixed salaries which may not squarely meet the COMPASS salary requirements.

Suggestion: It would be crucial the ensure that the EP holder’s fixed salary meets the qualifying EP salary floor, rather than depending on bonuses, other forms of remuneration or benefits in-kind. This provides clarity as to whether the EP holder’s salary has met MOM’s benchmark on the outset, which helps to do away with the need for additional clarifications and/or supporting documents.

Passing COMPASS Qualifications Criterion

Qualifications must be credible, and MOM requires verification of educational or professional credentials. As such, delays or difficulties in verifying foreign qualifications or non‐standard credentials can be a hurdle. If the EP holder who is the IP lacks the requisite academic qualifications, then past work experience in investment roles matters. If prior roles are not in well‑recognised investment firms or previous work records are not clear or properly documented, then the EP renewal application may face more scrutiny.

Suggestion: For degrees or certifications from abroad, it is advisable to ensure that they are verifiable and that proper records of academic history and past employment, as well as credential verifications are maintained and readily available. It might be worthwhile for the EP holder to consider obtaining additional qualifications that are related to their current role to boost their academic profile.

Additionally, it was relatively easier to obtain approval for EP applications before the introduction of COMPASS. With COMPASS requirements now, a lot of older applicants employed under their SFOs face difficulties renewing their EPs due to the lack of tertiary education qualifications. One solution is for these EP holders to draw a fixed monthly salary of at least S$22,500 to be exempted from COMPASS. Even though the EP could still be renewed this way, this has translated to higher operating costs for the SFO and higher personal income tax for the EP holder.

EP Holder’s Role and Responsibilities

EP renewal requires that the EP holder continues to perform a managerial, executive, or specialised job with their current employer. For IPs in SFOs in particular, the IP sometimes wear multiple hats: they might also do administrative or family services, or cross over between roles. This can muddy the clarity of “specialised” or “executive” roles and MOM may ask for clarifications. Additionally, it is important that the IP’s designation and job scope falls within MAS’s requirements for the SFO to continue enjoying its tax-exempt status, that is to carry out the role of a portfolio manager, research analyst or trader.

Suggestion: Maintain clear, well‑defined job scopes which should be consistent and aligned with the role and responsibilities of the EP holder’s designation. Avoid having roles that are ambiguous and where they clearly overlap with family administrative, secretarial, or logistics tasks. EPs are issued to professionals who meet salary and qualification requirements, so the job role must clearly reflect the appropriate level of expertise.

Company’s Track Record

MOM requires the fund management company’s turnover for the past 3 years to be provided before the EP renewal can be submitted and processed. If MOM deems that the turnover figures are concerning, or the company has insufficient stability or clarity in its financials, or has minimal Singapore‑based operations with little indication of having any activity, MOM may scrutinise whether the company is sufficiently established and operating. MOM may request for further information and/or documentation such as financial and bank statements, contracts with service providers and corresponding invoices, and tenancy agreements to prove that the company is viable and operating as justifications for the EP renewal.

Suggestion: The company should ensure that its turnover and all financial data are kept up-to-date, accurate, and reflective of its operations. Proper bookkeeping and records of all transactions and service agreements should be maintained at all times. If the company is largely inactive, it is then important to undertake a serious evaluation to determine whether it should continue to operate.

Conclusion

EP renewals are not guaranteed and are wholly in MOM’s discretion. Unless the SFO hires Singapore Citizens or Permanent Residents as IPs, foreigners who are filling the IP role would need to ensure that they have a valid EP throughout the duration of their employment. Failing to hold a valid EP would essentially mean that they have ceased employment with the SFO, which in turn may affect the SFO’s ability to be in compliance with the IP conditions to maintain its tax-exempt status. As Singapore remains a highly attractive location for SFOs and foreign IPs due to its regulatory stability, attractive tax incentives, and well‑developed financial ecosystem, recent policy shifts (such as raised salary thresholds and the introduction of COMPASS for EP renewals) impose new obligations and risks for IPs employed in SFOs. Successfully renewing the EP against this background demands more than just a form-filling exercise. It requires careful attention to the IP’s role, requirements of the job, the status of the SFO employing the IP, and an acute understanding of the landscape of EP renewal conditions as a whole. For IPs and their SFO employers, the key is to anticipate and prepare, and ensure that the written and unwritten rules are understood. With foresight and good planning, many of the EP renewal challenges can be navigated successfully.

SMTP’s experience

As a private client law firm that has been established since 1994, our Immigration and Family Offices Practice has a wealth of experience in EP applications and renewals across different sectors, subsequent SPR applications for EP holders and renewal of REPs for our clients and their family members, including any subsequent conversions to Singapore Citizenship. SMTP has also helped many clients set up SFOs and successfully apply for tax incentive schemes over the years. The firm has years of experience in helping clients meet the requirements to get approval for the S13O or S13U incentive award, and our firm provides annual maintenance services for SFOs to ensure that ongoing regulatory and reporting obligations are fulfilled to maintain tax-exempt status. Our lawyers work closely with clients and their advisors, adopting a tailored and holistic approach to address families’ specific needs and requirements.

Should you or your clients require any assistance or advice, please feel free to contact our Business Development Team to schedule a consultation.