Pitfalls Of Holding An EP Under A Sham Working Arrangement

November 1, 2023

How employees can impact the risks to your organization


Professionals looking to live and work in Singapore would typically apply for the Employment Pass (“EP”) under the sponsorship of the employing company. However, the benefits of obtaining an EP, as well as it being a precursor for foreigners looking for longer-term relocation plans to Singapore, have resulted in some individuals intentionally flouting the law for a purported hassle-free way of eventually obtaining Singapore Permanent Residence (“SPR”) and/or Singapore citizenship (“SC”). This article examines the EP population in Singapore, the process of applying for one, the benefits of having an EP, and the penalties for obtaining EPs fraudulently with commentaries on 2 Singapore cases that resulted in criminal convictions.

EP Holders in Singapore

According to the Ministry of Manpower (“MOM”), the total foreign workforce stands at 1,488,000 as of June 2023, with 197,300 holding EPs.[1] With the exception of individuals who have familial ties to Singapore and foreign investors who apply for SPR under the Global Investor Programme, only those who are holding an EP, S Pass or Student Pass[2] are eligible to apply for SPR. Out of these 3 categories, EP holders make up the largest group, at 11% out of the non-resident population.[3] S Pass holders and those holding Student Passes stand at 10% and 4% respectively, with the rest of the 1.77 million non-resident population consisting of work permit holders, migrant domestic workers and dependants of Singapore citizens, SPRs and work pass holders.3 According to Minister for Manpower Dr. Tan See Leng’s response to Parliamentary Questions on Foreign Workforce Policies, the focus is on ensuring that EP holders are of good quality, and there are no quotas imposed so as not to hold companies back and restrict Singapore’s ability to compete.[4]

EP Applications – COMPASS

From 1 September 2023, foreigners looking to apply for an EP with the MOM will be assessed with the Complementarity Assessment Framework (“COMPASS”), a points-based evaluation tool. According to Mr. K Shanmugam, Minister for Home Affairs and Minister for Law in his written reply to Parliamentary Question on the Number of Permanent Residence Status Granted in 2021, changes to the EP framework will not change the way that the Immigration and Checkpoints Authority (“ICA”) assesses PR applications independently from work passes[5]. The new framework is designed to enable employers to build a strong local core and hire high-quality foreign professionals who can enhance workplace diversity. In Dr. Tan See Leng’s Committee of Supply speech on 4 March 2022, he highlighted that COMPASS aims to provide a transparent system that holistically evaluates an EP applicant’s complementarity, as well as to accord businesses more clarity and predictability for manpower planning. As such, EP applicants must attain a minimum score on the COMPASS scoring framework to successfully obtain an EP, which is valid for up to 2 years, and renewable for up to 3 years thereafter subject to the renewal criteria.

Benefits of an EP

As one can allude from the aforementioned, one of the most sought-after benefits of having an EP is the eligibility of the EP holder to apply for SPR eventually, with such SPR applications falling under the purview of the ICA which assesses each application holistically under its discretion. This, coupled with the fact that there are no quota restrictions for EP approvals4, the EP is an attractive work pass for any qualifying individual that will allow, once approved, the EP holder to live and work in Singapore, as well as exit and enter the country without having to apply for travel visas. Additionally, EP holders can apply for Dependant’s Passes (“DP”) or Long-Term Visit Passes (“LTVP”) for their family members if they meet MOM’s requirements.

Penalties for Obtaining an EP under a Sham Pretext

The attractiveness of obtaining an EP, coupled with the misconceived perception that having an EP is almost guaranteed so long as the requirements are met and the EP is issued under a validly-incorporated company, have led some individuals to fall afoul of the law. Those who set up sham companies for the purpose of obtaining EPs have been convicted under criminal proceedings with heavy penalties. Under Section 22(1)(d) of the Employment of Foreign Manpower Act 1990 (“EFMA”), any person who provides false or misleading information to apply for or renew a work pass can face punishment of a fine not exceeding S$20,000 or imprisonment for a term not exceeding 2 years, or both. The supposed ease of getting an EP and the lure of its benefits have resulted in dire cautionary tales for those who make the mistaken assumption that the sham arrangements can continue without interference if the EP has been granted without incident in the first instance.

Cautionary Tale 1[6]

37-year-old Chinese national Zhang Qingqiao was recently sentenced to 4 weeks’ jail in October for making a false declaration to the authorities to obtain an EP, in a ruse that lasted 18 months. For Zhang, he “invested” S$360,000 in a company which was meant to be his employer for the purposes of his EP application, but he had no intentions to work for the said company at all in any capacity. Zhang’s lump sum “investment” was meant to be a deposit of sorts for the company to pay his declared monthly salary over a few years to recoup his investment, and to sustain his EP under the pretext of salaried employment. His goal was to migrate to Singapore with his family and eventually obtain SPR and SC, with getting the EP under the said company as the first step. He got acquainted with a woman named Wang Jue who facilitated the scheme. Despite Zhang’s defence that he was misled by Wang and is merely a victim of a scam, the court took a holistic approach in assessing the evidence that demonstrated Zhang, a seasoned investor and businessman, knew all along that he would not be working for the company. The court also noted that the company would have derived some economic benefit having received such a large sum of money from Zhang, and that Wang herself could potentially face criminal proceedings for her role in the fraud.

Cautionary Tale 2[7]

In another similar incident, Yu Huajie “invested” S$1 million in a Singapore company to obtain an EP, with hopes of becoming a SPR eventually and relocate to Singapore with his family. The Chinese national knowingly gave false information to the MOM to process his EP application, including paying S$14,000 for a fake degree certificate to be submitted as a supporting document in his application. Yu was well aware that he would not need to work for the company which would pay him a monthly salary. The ruse was discovered when an MOM officer carried out investigations after receiving a tip-off, with investigations revealing that the company was approached by a Ms. Wang who promised foreign investors for the company in exchange for the company applying EPs for these investors to be able to live in Singapore without actually having to work for the company. Yu was sentenced to 7 weeks’ jail after pleading guilty to his criminal charges under EFMA.


The requirements and process of applying for an EP may seem relatively straightforward, but obtaining an EP through deceptive means will attract severe penalties and consequences. Singapore’s strict and robust legal system means that a conviction for such infractions may potentially see the offender face deportation or a ban from entering Singapore, including other serious repercussions for the offender’s next-of-kin being able to continue residing in Singapore. This is especially true for cases where the offender’s family is relying on the EP for their DPs or LTVPs to stay in Singapore. The courts take a stern view on such violations of the law and will conscientiously assess the evidence to determine if the accused knowingly committed such offences or is merely a victim to migration scams. As such, one should always be mindful of such EP “migration schemes” that are being touted for guaranteed eventual SPR or SC status, as Singapore adopts a hard stance on legal violations on its immigration rules and policies.

SMTP’s Experience

As a private client firm, our Immigration and Family Offices department has a wealth of experience in navigating Employment Pass applications, including applications for the Overseas Networks & Expertise Pass (“ONE Pass”) for clients looking to live and work in Singapore. Our lawyers work closely with clients and their advisors, adopting a tailored 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.

[1] https://www.mom.gov.sg/documents-and-publications/foreign-workforce-numbers

[2] The applicant must have resided in Singapore for more than 2 years at the point of application, have passed at least one national exam (i.e. PSLE or GCE ‘N’/’O’/’A’ levels) or are in the Integrated Programme (IP)

[3] Population in Brief 2023, Department of Statistics, Ministry of Manpower

[4] https://www.mom.gov.sg/newsroom/parliament-questions-and-replies/2022/1003-combined-oral-response-by-minister-to-pqs-on-foreign-workforce-policies

[5] https://www.mha.gov.sg/mediaroom/parliamentary/written-reply-to-pq-on-the-number-of-permanent-residence-status-granted-in-2021/

[6] https://www.channelnewsasia.com/singapore/zhang-qingqiao-invested-360000-singaporean-pr-jail-lying-employment-pass-3831736

[7] https://www.straitstimes.com/singapore/courts-crime/chinese-national-who-gave-false-info-in-employment-pass-application-jailed-for-7-weeks