Singapore is a small nation and needs to continue to attract both foreign MNCs and foreign entrepreneurs (including start-ups and SMEs) to set up operations here. The Singapore local workforce is just too small to sustain the economy. Singapore would also like to establish itself as the ‘Silicon Valley’ of the east and to encourage the ‘cross-fertilisation of ideas’ into Singapore. In order to do so however, Singapore must not just be an easy place to set up operations or to do business. The foreign work pass criteria in Singapore must also be conducive to businesses and facilitate the process of foreign entrepreneurs moving to Singapore to operate their businesses.
The EntrePass Work Pass Scheme (administered by the Ministry of Manpower (“MOM”) in Singapore) (the “EntrePass Scheme”) has been the appropriate work pass for foreign entrepreneurs intending to start and operate their business in Singapore. Many foreign entrepreneurs however have expressed their dismay at how onerous and difficult it has been to secure an EntrePass. This is largely to do with the criteria to meet in order to secure the pass.
The criteria includes, inter alia, entrepreneurs having to incorporate a company in Singapore, evidence to the MOM that the company has a paid-up capital of at least $50,000 (by way of a bank statement to the MOM evidencing at least $50,000 in a Singapore-based bank account) as well as meeting one of the following requirements: (1) the company has to receive monetary funding or investment of at least $100,000 from a VC or business angel accredited by a Singapore government agency; or (2) hold an intellectual property; or (3) have research collaboration with A*Star or a local university; or (4) is an ‘incubatee’ at a government-supported incubator.
It was thus nearly impossible for expatriate entrepreneurs managing smaller ‘start-ups outfits to secure a valid work pass here. This dis-incentivized many promising start-up firms from re-locating to Singapore despite the conducive business climate in Singapore and number of incentive schemes to attract foreign businesses here.
The Singapore government has finally acknowledged this problem. Key changes were outlined in Parliament in March 2017 to revise both the entry and renewal criteria of the EntrePass Scheme. One significant proposal outlined in Parliament was to remove the requirement to have a paid-up capital of at least $50,000. A second key change was to extend the validity of the EntrePass from one (1) year to two (2) years. The evaluation criteria for global start-up founders would also be revised to include assessing how these start-up companies can contribute to Singapore and whether these start-ups have ‘outstanding achievements’ which Singapore can benefit from.
More importantly, the EntrePass Scheme will now be administered by both the MOM as well as Spring Singapore. Spring Singapore is an agency under the Ministry of Trade and Industry responsible for helping enterprises grow.
It is hoped that Spring Singapore will adopt a more ‘pragmatic’ approach when evaluating EntrePass applications and understand that start-up technology firms hold promise despite not having strong financials nor track record. The extension of the validity of the EntrePass from one (1) year to two (2) year is also a pragmatic move as foreign entrepreneurs can now plan for a longer tenure in Singapore and this may encourage them to also re-locate their family members to Singapore. EntrePass holders are allowed to bring their spouses and children to live in Singapore. The changes will come into effect in the later part of 2017.
Kenneth G Pereire is advisory board member for Girls in Tech Singapore and an Associate Director in the Corporate & Commercial Practice of Consilium Law Corporation. His focus areas are in Mergers & Acquisitions (“M&A”) transactions in Singapore and ASEAN and securities regulatory work. He also has considerable experience in assisting technology companies with their legal needs including capital raising documentation, commercial agreements, structuring advice and compliance.
