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Singapore Workplace Fairness Act 2025: What Businesses Using an Employer of Record Need to Know

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Singapore Workplace Fairness Act 2025: What Businesses Using an Employer of Record Need to Know

Singapore has given workplace fairness the force of law. In 2025, Parliament passed the Workplace Fairness Act (WFA) — the city-state’s first legislation making workplace discrimination legally enforceable.

For businesses already operating in Singapore through employer of record services, the question is specific: how does this law affect your arrangement?

The answer matters because an EOR sits between your business and your employees as the legal employer.

That relationship determines exactly who holds the compliance obligations under the WFA — and what your business must do regardless.

This article explains what the Act requires, how it interacts with EOR arrangements in Singapore, and what to look for in a compliant EOR partner.

What Is the Singapore Workplace Fairness Act?

The Workplace Fairness Act is Singapore’s first statute specifically prohibiting workplace discrimination.

It was passed in two stages: the substantive bill on 8 January 2025, and the Dispute Resolution bill on 4 November 2025. The law is expected to take effect by the end of 2027.

The Act applies to employers with 25 or more employees. Smaller firms are exempt at commencement, with a review of their status within five years.

The Act covers all stages of employment — from job advertisements and hiring through to promotions, performance appraisals and dismissals.

Discrimination based on any of 11 protected characteristics is prohibited. These are:

  • Age
  • Nationality
  • Sex, marital status, pregnancy status and caregiving responsibilities
  • Race, religion and language ability
  • Disability and mental health conditions

See the key facts summary below.
Item Detail
Legislation Workplace Fairness Act 2025
Bills passed Substantive bill: 8 Jan 2025 | Dispute Resolution bill: 4 Nov 2025
Effective date By end of 2027
Applies to Employers with 25 or more employees
Scope Hiring, promotion, appraisal, termination
Max penalty (civil) Up to S$250,000 for serious repeat breaches

From Voluntary Guidelines to Legal Obligation

Before the WFA, Singapore promoted fair hiring through the Tripartite Guidelines on Fair Employment Practices (TGFEP).

Those guidelines were advisory. The Ministry of Manpower could curtail work pass privileges, but employees had no direct legal avenue to seek redress.

The WFA changes that fundamentally. Employees can now bring claims directly — through a three-step process:

  • Step 1: Internal grievance handling within the firm
  • Step 2: Mandatory mediation through the Commissioner for Workplace Fairness
  • Step 3: Adjudication at the Employment Claims Tribunal (claims up to S$250,000) or the High Court

Penalties run in two tiers. Administrative breaches — such as failing to maintain grievance records — carry fines of up to S$5,000 for a first offence.

Serious civil contraventions, such as retaliatory dismissal, carry penalties of up to S$50,000 initially and S$250,000 for repeat orders.

Both the company and its officers can be held jointly liable.

How the WFA Applies to Employer of Record Arrangements

When a business engages employer of record services in Singapore, the EOR becomes the legal employer on paper.

This means the EOR is the entity registered with MOM, the CPF Board and IRAS. The EOR sponsors work passes, processes payroll and signs employment contracts.

Under the WFA, the legal employer bears the primary compliance obligations. That includes the duty to establish a written grievance process, avoid discriminatory decisions, and maintain proper records.

In practice, this has important implications for businesses using EOR arrangements:

  • The EOR’s employment contracts must already conform to WFA requirements — no discriminatory clauses, no retaliation provisions
  • The EOR must maintain a written grievance handling process that meets Section 27 of the Act
  • Any hiring or termination decisions routed through the EOR must be defensible on merit and free of protected-characteristic bias

Crucially, however, the day-to-day management of the employee typically remains with your business — the EOR’s client. If your team makes a biased promotion decision or a discriminatory dismissal call, and that decision is executed through the EOR, the WFA exposure does not disappear simply because an EOR is involved.

Both the EOR as legal employer and your business as the operational employer share responsibility for how employment decisions are made and documented.

What to Look for in an EOR Partner Under the WFA

Not all employer of record services are equally prepared for the WFA compliance landscape.

As you evaluate or review your EOR partner, ask the following:

  • Does the EOR maintain a written grievance handling process that satisfies Section 27 of the WFA?
  • Are employment contracts drafted to exclude discriminatory criteria across all 11 protected characteristics?
  • Does the EOR maintain proper records of employment decisions — hiring, promotions, appraisals and exits?
  • Does the EOR have anti-retaliation provisions built into its processes to protect employees who raise concerns?
  • Can the EOR provide guidance on how operational decisions made by your team should be documented for WFA compliance?

A well-structured EOR does more than process payroll. It provides the compliance infrastructure that shields your business from inadvertent breaches — including breaches your team might not even realise it is committing.

For foreign companies entering Singapore, this support is particularly valuable. You may not be familiar with local nuances around nationality fairness under the Fair Consideration Framework, or the specific evidentiary standards MOM expects when employment decisions are challenged.

Learn more about how EOR and work pass regulation intersect through TY TEOH’s guide to EOR and work pass regulation in Singapore.

A Note for Foreign Businesses Entering Singapore

For international businesses expanding into Singapore, the WFA adds a new compliance layer to an already-structured regulatory environment.

Foreign companies already navigate CPF, the Fair Consideration Framework, work pass requirements and the Employment Act.

The WFA now overlays anti-discrimination obligations across the entire employment lifecycle.

Many overseas companies choose to establish their Singapore presence through employer of record services precisely to manage this complexity — and the WFA makes that rationale even stronger.

If you are evaluating Singapore as a market and want to understand the broader compliance picture before hiring, market entry advisory support can help you structure your workforce approach from day one.

Frequently Asked Questions

1. Does the Workplace Fairness Act apply to businesses using an EOR in Singapore?

Yes. The WFA applies to the legal employer — which in an EOR arrangement is the EOR provider.

However, businesses that manage employees day-to-day retain responsibility for the decisions that underlie employment actions.

If your team drives a biased promotion or discriminatory dismissal, executing it through an EOR does not eliminate the WFA exposure.

2. When does the Singapore Workplace Fairness Act take effect?

The WFA is expected to come into force by end of 2027. The substantive bill was passed on 8 January 2025 and the Dispute Resolution bill on 4 November 2025.

Employers with 25 or more employees should begin aligning their grievance processes and employment practices well before the effective date.

3. What is the grievance handling requirement under the WFA?

Under Section 27 of the WFA, employers with 25 or more employees must maintain a written grievance process covering four elements: inquiry and review of complaints, written notification of outcomes, confidentiality, and record-keeping.

In an EOR arrangement, this obligation sits with the EOR as the registered employer — but your business should confirm that the EOR’s procedures meet the statutory standa

4. What penalties can apply for WFA breaches?

Penalties operate on two tiers. Administrative penalties for record-keeping failures run up to S$5,000 for a first offence.

Serious civil contraventions — retaliatory dismissal, deliberate discrimination — carry penalties of up to S$50,000 initially and S$250,000 for repeat orders. Both the company and its officers may be jointly liable.

5. How can employer of record services help with WFA compliance?

A strong EOR partner provides the compliance framework that the WFA requires: properly drafted employment contracts, written grievance procedures, and disciplined record-keeping.

EOR providers with Singapore-specific expertise also understand how the WFA intersects with MOM’s Fair Consideration Framework — a practical advantage for foreign companies navigating local hiring rules.

Explore how TY TEOH’s employer of record services are structured to meet Singapore’s evolving employment compliance requirements.

Conclusion

The Singapore Workplace Fairness Act marks a genuine shift in the country’s employment landscape.

For businesses operating through employer of record services, the practical message is clear: the legal employer bears primary WFA obligations, but operational employers remain accountable for the decisions that drive employment outcomes.

The two-year runway before the Act takes effect is an opportunity — not a reason to delay.

Use this time to review your EOR partner’s grievance procedures, audit how employment decisions are made and documented, and ensure your management practices can withstand WFA scrutiny.

Companies that approach this proactively will find that compliance and good employment practice point in exactly the same direction.
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M&A Tax Implications in Singapore: Stamp Duty, GST, and the Share vs Asset Deal Decision Explained

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M&A Tax Implications in Singapore: Stamp Duty, GST, and the Share vs Asset Deal Decision Explained

Singapore is one of Asia’s most active merger and acquisition markets. In 2024, total M&A deal value reached approximately USD 82 billion — a 40 percent increase year-on-year.

Cross-border deals account for more than half of that volume, with sectors like real estate, telecom and healthcare leading activity.

For dealmakers, the structural choice that carries the most immediate tax consequence is simple to state: share deal or asset deal?

Each route carries distinct obligations under Singapore’s stamp duty regime, GST rules, and tax framework.

This article explains how the tax treatment works for each structure — and what buyers and sellers need to know before signing.

Why Singapore Remains a Leading M&A Hub

Singapore’s appeal as a merger and acquisition jurisdiction rests on several compounding advantages.

Its corporate tax rate of 17 percent, extensive double-taxation agreement network, and absence of capital gains tax make it structurally attractive for both regional holding structures and operating entities.

The legal system — based on English common law — provides deal certainty that investors rely on when structuring cross-border transactions.

Asia-Pacific dealmaking grew by 44 percent in Q1 2025 compared to the same period in the prior year, and Singapore sits at the centre of that momentum.

For companies considering Singapore as a regional base, market entry advisory support can help align corporate structure with M&A strategy from the outset.

Share Deal vs Asset Deal: The Structural Decision

Every acquisition in Singapore begins with the same structural question: buy the shares of the target company, or buy its assets?

A share deal transfers ownership of the company itself. Contracts, licences, employees and liabilities travel with it. The buyer acquires the whole business — including obligations the seller may not have fully disclosed.

An asset deal transfers selected components: property, equipment, intellectual property, or customer contracts. The buyer has more control over what it takes on, but must renegotiate every agreement separately.

The tax consequences of each structure are meaningfully different. Stamp duty rates, GST exposure, and the treatment of tax losses all vary.

Stamp Duty on Share Deals in Singapore

When shares in a Singapore company are transferred, stamp duty is payable at 0.2 percent of the higher of the consideration paid or the net asset value (NAV) of the shares.

The NAV is calculated from the latest accounts dated within 24 months before the transfer. This prevents undervaluation as a stamp duty avoidance mechanism.

Payment timelines are strictly observed. If the agreement is executed in Singapore, duty is due within 14 days of signing. If signed overseas and brought into Singapore, the deadline is 30 days from receipt.

One important exception: agreements for the sale of scripless shares (electronically held shares) are remitted — meaning the agreement itself is stamp-duty-free, though a transfer instrument may still attract duty if executed separately.

A further layer applies when shares are acquired in a residential property-holding entity. In that case, Additional Conveyance Duties (ACD) apply on top of standard share transfer duty.

ACD was introduced to prevent investors from using share acquisitions to sidestep property stamp duties — it effectively mirrors the Buyer’s Stamp Duty and ABSD framework for indirect property transfers.

Stamp duty reliefs are available for certain qualifying corporate restructurings, but these are narrowly applied and require pre-approval from the Inland Revenue Authority of Singapore (IRAS).

Stamp Duty on Asset Deals in Singapore

Asset deals attract stamp duty only on specific dutiable assets — primarily immovable property.

Buyer’s Stamp Duty (BSD) applies on the acquisition of real property at progressive rates. From 15 February 2023, the top marginal rate is 6 percent for residential property and 5 percent for non-residential property.

For foreign purchasers of residential property, Additional Buyer’s Stamp Duty (ABSD) also applies. The ABSD rate for foreigners acquiring any residential property was increased to 60 percent effective July 2025 — one of the highest in the region.

Movable assets — equipment, inventory, intellectual property — generally fall outside the stamp duty scope.

The stamp duty differential between structures can be substantial when real estate is a significant component of the deal. A share acquisition of a property-owning company at 0.2 percent may still trigger ACD, but typically at a lower effective cost than a direct property transfer at BSD plus ABSD rates.

GST Treatment: How Share and Asset Deals Differ

Singapore’s GST rate is 9 percent (effective from 1 January 2024). How it applies in M&A depends entirely on deal structure.

Share transfers are not subject to GST. The acquisition of shares in a company sits outside the GST framework — making the share deal the cleaner option from a GST perspective.

Asset deals, by contrast, can attract GST where the assets are used in a GST-registered business and the seller is GST-registered.

The key exception is the transfer of a going concern (TOGC). Where an asset deal qualifies as a TOGC — meaning the buyer continues the same business with the transferred assets — the transaction is excluded from GST.

TOGC treatment is not automatic. It requires the buyer to be, or intend to become, GST-registered, and for the business being transferred to be a going concern at the point of transfer.

Failing to structure correctly for TOGC can result in a 9 percent GST charge on the full asset consideration — a significant cost in large transactions.

Quick Reference: Share Deal vs Asset Deal in Singapore M&A

Factor Share Deal Asset Deal
Stamp Duty 0.2% of consideration or NAV (higher) Up to 6% BSD (residential), 5% (non-residential)
GST Not applicable 9% unless TOGC conditions met
Liabilities Buyer inherits all company liabilities Buyer selects assets; liabilities left behind
Tax losses Carry-forward losses remain with company Generally not transferred
Continuity Contracts, licences, staff intact Each must be renegotiated or re-assigned
Best suited for Operating businesses, telecom, services Real estate, infrastructure, targeted assets

Tax Attributes, Due Diligence and Regulatory Clearance

Beyond stamp duty and GST, deal structuring in Singapore involves three additional tax-related considerations.

Carry-forward tax losses: In a share deal, accumulated losses and capital allowances remain with the target company.

They may be available for set-off against future profits — subject to IRAS conditions, including continuity of business and shareholder tests. Asset deals do not transfer these attributes.

Due diligence: In a share deal, buyers inherit all historic tax exposures — unpaid GST, unreported income, transfer pricing risks.

This makes pre-acquisition tax due diligence a non-negotiable step, particularly for acquisitions of privately held companies where records may be incomplete.

Regulatory clearance: Certain sectors — financial services, broadcasting, defence — require approval from the relevant regulator before a change of control can be completed.

Transactions that may concentrate market power can also trigger review by the Competition and Consumer Commission of Singapore (CCCS).

These factors do not change the fundamental share vs asset choice, but they can materially affect timing and deal certainty.

Working with M&A Advisers in Singapore

The tax structuring decisions in a Singapore merger and acquisition transaction — stamp duty optimisation, GST qualification, tax loss utilisation — require specialist advice.

Early engagement matters. Choosing the wrong structure before heads of terms are signed can be difficult and expensive to undo.

TY TEOH’s financial and transaction advisory team supports buyers and sellers throughout the deal lifecycle.

This includes structuring advice, financial due diligence, and post-deal integration support.

For deals where accurate asset or share valuation is critical to stamp duty assessment or price negotiation, valuation advisory services provide independent, defensible opinions.

Companies with cross-border M&A exposures — particularly those touching transfer pricing or intra-group financing — will also benefit from tax and GST advisory support to ensure the acquisition structure is optimised across jurisdictions.

Frequently Asked Questions

1. What stamp duty applies to a share transfer in Singapore?

Stamp duty on share transfers is 0.2 percent of the higher of the consideration paid or the net asset value of the shares.

The NAV must be calculated from accounts dated within 24 months before the transfer.

Duty is payable within 14 days if the agreement is signed in Singapore, or 30 days if executed overseas.

2. Is GST payable on the sale of a business in Singapore?

GST at 9 percent may apply to an asset deal if the seller is GST-registered and the transfer does not qualify as a transfer of a going concern (TOGC).

A qualifying TOGC is excluded from GST. Share deals are not subject to GST regardless.

3. What is the Additional Conveyance Duty (ACD) in Singapore M&A?

ACD applies when a buyer acquires shares in a company that holds Singapore residential property.

It is designed to ensure that share acquisitions of property-holding entities are not used to avoid Buyer’s Stamp Duty and ABSD that would apply on a direct property purchase.

ACD is calculated by reference to the residential property held by the entity, not the share consideration.

4. Can carry-forward losses be transferred in a Singapore M&A transaction?

In a share deal, accumulated tax losses and capital allowances remain within the target company and can potentially be set off against future income.

This is subject to IRAS conditions, including continuity of the company’s business activity and no substantial change in shareholders.

In an asset deal, losses are not transferred — they stay with the selling entity.

5. Do foreign companies face additional restrictions in Singapore M&A?

Singapore is generally open to foreign investment, but certain sectors impose ownership limits or require regulatory approval — including financial services, media and telecommunications.

Residential property acquisitions by foreign individuals and entities attract significantly higher ABSD rates — 60 percent for foreigners as of July 2025.

Cross-border deals above certain thresholds may also be subject to CCCS competition review.

Conclusion

The tax implications of a Singapore merger and acquisition transaction hinge primarily on deal structure.

Share deals offer lower stamp duty exposure and no GST — but buyers inherit full liability. Asset deals offer liability control but attract higher property stamp duties and potential GST.

Getting the structure right before heads of terms are agreed is critical.

With Singapore M&A activity at record levels, working with experienced advisers across financial and transaction advisory, valuation, and tax and GST advisory is the most reliable way to protect deal value from the outset.
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Singapore Employment Pass Salary Requirements by Sector: A Complete Employer’s Guide

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Singapore Employment Pass Salary Requirements by Sector: A Complete Employer's Guide

Salary is the first test every employment pass in Singapore application must clear — and it has two distinct layers. Before a candidate is assessed under COMPASS, they must meet the EP qualifying salary for their age and sector.

Get this wrong and the application is rejected outright, regardless of how well the candidate scores on qualifications, diversity or other criteria.

This guide explains both layers — the qualifying salary thresholds by sector, how salaries scale with age, and how COMPASS uses salary benchmarks to award additional points. It also covers upcoming changes and how employer of record services can help employers manage these obligations compliantly.

The Two-Stage Salary Assessment for Employment Pass in Singapore

Singapore’s Ministry of Manpower (MOM) applies a two-stage salary test to every EP application:

Stage 1 – EP Qualifying Salary: The candidate’s fixed monthly salary must meet a minimum threshold for their age and sector. This is a hard gate — candidates who fall below it are not eligible for an EP at all.

Stage 2 – COMPASS C1 Salary Benchmark: If the qualifying salary is met, the candidate is assessed against a sector-specific salary percentile. Scoring higher on C1 awards more COMPASS points, directly improving the application’s chances of reaching the 40-point passing threshold.

These two thresholds are separate and must both be considered when structuring a compensation offer. A salary that clears the qualifying floor may still score zero on C1 if it falls below the 65th percentile of local PMET salaries in that sector.

EP Qualifying Salary by Sector (2025–2026)

The minimum qualifying salary for an Employment Pass in Singapore is set by MOM and applies from the date of the candidate’s application. For applications submitted in 2025 and 2026, the floors are:

  • General sectors: S$5,600 per month (for candidates aged approximately 23–27)
  • Financial services sector: S$6,200 per month (for the same age band)

These figures represent the minimum entry point only. Because salaries scale progressively with age, a 40-year-old candidate will face a significantly higher bar than the floor figures suggest. MOM publishes the full age-band schedule annually.
Age Band General Sectors (min. qualifying) Financial Services (min. qualifying)
23–27 S$5,600 S$6,200
28–32 approx. S$6,200 approx. S$6,500
33–37 approx. S$7,300 approx. S$7,600
38–42 approx. S$8,500 approx. S$8,800
43–45+ up to S$10,700 up to S$11,800
Source: MOM (2025 benchmarks). Age 28+ figures are approximate mid-range estimates based on published progressive bands. Always verify against MOM’s official EP qualifying salary schedule before submitting an application.
Looking further ahead, Singapore’s Budget 2026 announced further increases. From 1 January 2027 (new applications) and 1 January 2028 (renewals), the floors will rise to S$6,000 for general sectors and S$6,600 for financial services, with proportionate age-scaled increases throughout.

Why Salaries Scale with Age — and Why It Matters

MOM’s salary benchmarks are tied to the top one-third of local PMET earnings for comparable age and experience levels. The rationale is straightforward: a 40-year-old regional director should be paid what a comparable Singaporean professional at the same career stage earns — not the entry-level minimum.

In practice, this means a candidate in their late thirties earning S$6,000 per month may be rejected on salary grounds even though S$6,000 exceeds the published floor for younger applicants.

Employers should benchmark salaries against the candidate’s age band, not just the base threshold. For companies hiring senior professionals, this is the most common reason well-qualified candidates still face rejection.

MOM provides a Self-Assessment Tool (SAT) where employers can estimate whether a candidate’s salary meets the qualifying threshold before submission.

COMPASS C1 Salary Benchmarks: Points Beyond the Minimum

Once the qualifying salary is cleared, the COMPASS framework uses a separate set of sector-specific salary benchmarks to award C1 points. These benchmarks compare the candidate’s salary against local PMET salaries in the same sector, segmented by age.

MOM derives these benchmarks annually from its Comprehensive Labour Force Survey and publishes updated tables each August. The most recent update (August 2025) applies to new applications from 1 January 2026 and renewals expiring from 1 July 2026.
Salary Percentile vs Local PMETs COMPASS C1 Points Awarded
At or above 90th percentile 20 points
65th–90th percentile 10 points
Below 65th percentile 0 points
A candidate whose salary sits at or above the 90th percentile earns the full 20 points on C1. This is the highest available score under any single foundational COMPASS criterion. For employers seeking to maximise their application’s total score, positioning the offer at the 90th percentile — where the candidate’s qualifications and experience justify it — offers the most direct return.

Candidates earning at least S$22,500 fixed monthly salary are exempt from COMPASS entirely and receive an EP without going through the points assessment.

Financial Services vs General Sectors: Key Differences

MOM classifies companies by their primary business activity. If your organisation’s Singapore Standard Industrial Classification (SSIC) code falls under financial and insurance activities, your EP applications are assessed under the financial services salary schedule, which carries higher thresholds at every age band.

For multinational groups with a Singapore holding or financial subsidiary, this classification can catch employers off-guard. A technology company that primarily provides financial software — but is classified under financial services for SSIC purposes — may face the higher salary bar without realising it.

Employers can check and update their organisation’s sector classification through MOM’s online portal. If your sector classification is incorrect, correcting it before submission can affect both the qualifying salary threshold and the C1 benchmark your candidate is assessed against.

For companies evaluating Singapore as a base for regional financial operations, market entry advisory can help structure your entity in a way that aligns SSIC classification with your actual business activities.

How Employer of Record Services Support EP Salary Compliance

For foreign companies without a Singapore entity, or those managing rapid headcount growth, employer of record services provide a structured way to employ talent compliantly — including handling EP applications and payroll under MOM requirements.

An EOR acts as the legal employer of record, taking responsibility for payroll accuracy, CPF contributions (for Singaporean and PR employees), and MOM work pass compliance. When EP applications are submitted through an EOR, the EOR is listed as the sponsor.

Critically, experienced EOR providers can run a COMPASS pre-check before any application is submitted. This means assessing the candidate’s likely C1 score based on their salary offer and the firm’s existing PMET profile — identifying potential shortfalls before they become rejections.

For a comprehensive look at how EOR arrangements work under Singapore’s work pass regulations, including EP sponsorship obligations, refer to the Singapore EOR work pass regulation guide published by TY TEOH International.

Companies hiring their first Singapore employee or navigating multiple EP applications simultaneously also benefit from dedicated migration advisory support, which covers documentation preparation, COMPASS scoring, and MOM submission management end-to-end.

Frequently Asked Questions

1. What is the minimum salary for a Singapore Employment Pass in 2025?

The minimum qualifying salary is S$5,600 per month for general sectors and S$6,200 per month for financial services. These figures apply to younger applicants (approximately 23–27 years old). The required salary increases progressively with the candidate’s age and must be verified against MOM’s published age-band schedule.

2. How does the EP qualifying salary differ from the COMPASS C1 salary benchmark?

The EP qualifying salary is the minimum gate — candidates who do not meet it are ineligible for an EP regardless of other factors. The COMPASS C1 salary benchmark is a separate assessment that compares the candidate’s salary against the local PMET salary percentile in their sector. Clearing the qualifying floor earns no COMPASS points by itself; points are only awarded when the salary reaches the 65th percentile or above.

3. How often are the EP salary benchmarks updated?

MOM updates the COMPASS C1 salary benchmarks once a year, typically published in August. The 2025 benchmarks (published August 2024) apply to new applications up to 31 December 2025 and renewals expiring up to 30 June 2026. The 2026 benchmarks (published August 2025) apply to new applications from 1 January 2026 and renewals expiring from 1 July 2026.

4. Does the financial services sector always require a higher EP salary?

Yes. MOM applies a higher salary schedule to companies classified under financial and insurance services. The base qualifying salary is S$6,200 per month (versus S$5,600 for general sectors), and this gap is maintained across all age bands. Employers should verify their organisation’s SSIC classification with MOM if there is any uncertainty about which schedule applies.

5. Can an employer of record sponsor an Employment Pass in Singapore?

Yes. When a company uses employer of record services, the EOR becomes the work pass sponsor. The EOR must meet MOM’s employer eligibility requirements, including maintaining a good compliance track record. The candidate still needs to personally satisfy all EP eligibility criteria, including meeting the qualifying salary threshold and COMPASS requirements.

Conclusion

Understanding Singapore employment pass salary requirements by sector is non-negotiable for any employer hiring foreign talent. The qualifying salary is a hard floor — getting it wrong means an outright rejection before COMPASS is even considered.

But clearing the floor is only step one. For employers serious about EP approval rates, structuring offers to hit the 65th or 90th COMPASS C1 salary percentile makes a direct difference to application outcomes. This requires knowing both the sector benchmark and the candidate’s age-band — not just the published minimum.

With salary benchmarks updated annually and further increases confirmed from 2027, regular review of your compensation frameworks against current MOM figures is essential. Whether you manage EP applications in-house or through migration advisory professionals, staying current with MOM’s published salary schedules is the foundation of a successful foreign talent strategy in Singapore.
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How Employers Can Improve Their COMPASS Score for Employment Pass in Singapore

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How Employers Can Improve Their COMPASS Score for Employment Pass in Singapore

Hiring foreign talent in Singapore has become more strategic than ever. Since September 2023, every employment pass in Singapore application must pass the Complementarity Assessment Framework — better known as COMPASS — a points-based system introduced by the Ministry of Manpower (MOM).

Unlike the old single-threshold model, COMPASS evaluates candidates across six criteria. Employers now have a meaningful role to play in shaping their application scores. The good news: knowing how the system works gives you a clear advantage.

This guide breaks down each COMPASS criterion and offers practical steps your company can take to maximise your score — starting with your next hire.

What Is COMPASS and Why It Matters for Employers

COMPASS stands for Complementarity Assessment Framework. It replaced the previous experience and salary-only assessment with a structured, transparent scoring matrix.

An EP application must score at least 40 points to qualify. Points are earned across four foundational criteria and up to two bonus criteria. Each foundational criterion awards 0, 10 or 20 points depending on whether the application does not meet, meets or exceeds expectations.

Importantly, some criteria reflect the employer’s own workforce profile — not just the candidate’s credentials. This means companies hiring strategically, and building balanced teams, are rewarded across every application they submit.

There are limited exemptions. Candidates earning at least S$22,500 fixed monthly salary, filling roles of one month or less, or applying as overseas intra-corporate transferees under certain free trade agreements are exempt from COMPASS.

The Six COMPASS Criteria at a Glance

Criterion What Is Assessed Max Points
C1 – Salary Candidate's salary vs local PMET salaries by age and sector 20
C2 – Qualifications Academic or professional credentials and institution ranking 20
C3 – Diversity Nationality mix of firm's PMET workforce 20
C4 – Local Employment Local PMET ratio vs industry peers 20
C5 – Skills Bonus (SOL) Role is on the Shortage Occupation List +20
C6 – SEP Bonus Company participates in strategic economic programmes +10

Tip 1: Position Salaries Competitively (C1)

C1 compares the candidate’s fixed monthly salary to local PMET salaries in the same sector and age band. A candidate earning at or above the 90th percentile earns 20 points; at the 65th–90th percentile, 10 points; below the 65th, zero.

Note that this is separate from the EP qualifying salary threshold (S$5,600 for most sectors in 2025; higher for financial services). You need to clear both.

MOM has also updated C1 salary benchmarks, with new figures taking effect for fresh applications from 1 January 2026 and renewals expiring from 1 July 2026. Review the latest published benchmarks before making an offer.

If a candidate’s skills and experience justify it, positioning the salary at or above the 90th percentile is the single fastest way to add 20 points to your application.

Tip 2: Prioritise Candidates with Verified, Recognised Qualifications (C2)

C2 awards 20 points for degrees from top-tier institutions — including the top 100 universities in global rankings, Singapore’s autonomous universities, and institutions with strong sector-specific reputations.

A recognised degree-equivalent qualification earns 10 points. No qualifying credential earns zero, though a strong salary and diversity profile can still push the total past 40.

Since September 2023, qualification verification has been mandatory for all EP applications. Degrees must be authentic, from accredited institutions, and accompanied by proper documentation. Employers should verify qualifications early — ideally during the offer stage — to avoid last-minute delays.

Tip 3: Build a More Diverse PMET Workforce (C3)

C3 looks at the nationality share of the candidate’s home country among your firm’s PMETs. If fewer than 5% of your PMETs share the candidate’s nationality, you earn 20 points. Between 5% and 25%, you earn 10. At 25% or above, you earn zero.

From September 2025, MOM defines PMETs as employees earning at least S$3,300 per month. Companies with fewer than 25 PMETs automatically receive 10 points, shielding small firms from penalty.

For growing companies, the message is clear: if one nationality is already well-represented in your technical or managerial ranks, actively consider candidates from other backgrounds for your next hires. MOM’s Workforce Insights tool lets you check your current nationality share before applying.

Tip 4: Invest in Local Talent to Strengthen C4

C4 measures your firm’s share of local PMETs compared to other companies in the same industry subsector. Sitting at or above the 50th percentile earns 20 points; between the 20th and 50th, 10 points; below the 20th, zero.

 

This criterion directly incentivises employers to hire, train and retain Singaporean professionals. Practical steps that improve your C4 standing include:

 

  • Advertising vacancies on MyCareersFuture and giving local candidates fair consideration under the Fair Consideration Framework
  • Participating in government-backed workforce development programmes such as SkillsFuture or SkillsConnect
  • Tracking and improving your local PMET ratio through regular internal HR reviews

 

For companies expanding into Singapore, building local hiring into your headcount plan from day one is both a compliance requirement and a COMPASS advantage. A trusted Employer of Record (EOR) or HR partner can help you monitor your local PMET ratio, structure balanced hiring plans, and stay ahead of Fair Consideration Framework obligations as your headcount grows.

 

If you are setting up a new entity, market entry advisory support can help you structure your workforce and hiring approach to satisfy these requirements from the outset.

Leveraging Bonus Points: C5 (Skills) and C6 (SEP)

Beyond the four foundational criteria, two bonus categories can push a borderline score past 40 — or give a strong application additional headroom.

C5 – Skills Bonus: If the role appears on MOM’s Shortage Occupation List (SOL), the application earns up to 20 bonus points (20 if the candidate’s nationality makes up less than one-third of your PMETs; 10 if it meets or exceeds that share). The SOL currently includes roles such as AI and machine learning specialists, cybersecurity professionals, software engineers, and certain healthcare and aerospace engineering positions.

C6 – Strategic Economic Priorities Bonus: Companies participating in approved government initiatives can earn up to 10 additional points. Eligible programmes include the Development and Expansion Incentive (DEI), the Research and Innovation Scheme for Companies (RISC), and NTUC-endorsed transformation efforts. Approval comes from the relevant government agency.

How Employer of Record Services Simplify EP Management

For companies without a Singapore entity, or those scaling headcount rapidly, employer of record services offer a structured way to employ foreign talent compliantly while EP applications are processed.

An EOR acts as the legal employer on your behalf — managing payroll, CPF contributions, employment contracts and MOM compliance — while you retain full operational control of the hire.

Beyond EOR, companies managing multiple EP applications benefit from professional migration advisory support. Expert advisers can assess COMPASS scores before submission, flag potential shortfalls across C1–C4, and prepare documentation that gives each application the best chance of approval.

For foreign businesses evaluating Singapore as a regional base, understanding your COMPASS obligations early — before hiring begins — prevents costly application rejections down the line. You can learn more about the broader opportunity through TY TEOH’s Why Singapore guide.

Frequently Asked Questions

1. What is the minimum COMPASS score required for a Singapore Employment Pass?

An EP application must score at least 40 points across the COMPASS criteria to be approved. This is in addition to meeting the EP qualifying salary threshold, which starts at S$5,600 per month for most sectors in 2025.

2. Which COMPASS criteria are within the employer's direct control?

C3 (Diversity) and C4 (Support for Local Employment) are determined entirely by the employer’s own workforce profile — not the individual candidate. Employers can improve these scores over time by diversifying nationality representation and increasing local PMET hiring.

3. Can a candidate still pass COMPASS without a degree?

Yes. COMPASS does not require a degree as a minimum threshold. A strong salary (C1), good employer diversity profile (C3 and C4), and bonus points from C5 or C6 can still produce a passing score of 40 or more, even without degree-equivalent qualifications.

4. What is the Shortage Occupation List (SOL) and how does it affect the COMPASS score?

The SOL is a list of roles facing significant talent shortages in Singapore. If the EP role appears on the SOL, the application earns up to 20 bonus points under C5. MOM updates the SOL periodically. Current examples include AI specialists, cybersecurity engineers, and senior healthcare professionals.

5. How can an employer of record help with Employment Pass applications in Singapore?

An employer of record takes on the legal employment obligations — payroll, CPF, contracts — while the EP application is in progress. This is especially useful for foreign companies without a local entity. EOR providers with migration advisory expertise can also assess COMPASS scores upfront and handle MOM submissions on your behalf.

Conclusion

COMPASS has made Singapore’s employment pass in Singapore framework more transparent — and more strategic for employers. The framework rewards companies that pay competitively, hire from diverse backgrounds, and invest in local talent development.

Improving your COMPASS performance is not a one-off exercise. It requires an ongoing approach to workforce planning: monitoring your nationality diversity through MOM’s Workforce Insights tool, benchmarking local PMET ratios against your subsector, and understanding which roles on the SOL are relevant to your business.

For companies new to Singapore or managing multiple EP applications simultaneously, working with advisers who specialise in employer of record services and migration advisory can significantly improve your approval rate and reduce application risk.
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Pillar Two Global Minimum Tax Singapore: MTT, DTT Registration and What MNE Groups Must Do in 2026

global minimum tax singapore

Pillar Two Global Minimum Tax Singapore: MTT, DTT Registration and What MNE Groups Must Do in 2026

Large multinational enterprise (MNE) groups operating in or through Singapore are now subject to a minimum effective tax rate of 15% under Pillar Two of the OECD’s BEPS 2.0 initiative.

 

Singapore implemented this through the Multinational Enterprise (Minimum Tax) Act (MMT Act), which introduced two new taxes: the Multinational Enterprise Top-up Tax (MTT) and the Domestic Top-up Tax (DTT). Both apply from financial years beginning on or after 1 January 2025.

 

For MNE groups with a 31 December 2025 financial year-end, the registration deadline with IRAS is 30 June 2026. Failure to register by this date may attract a 10% surcharge on any top-up tax payable.

 

This guide explains how Pillar Two applies in Singapore, which MNE groups are in scope, what registration involves, and how to prepare your group for compliance.

What Is the OECD Pillar Two Global Minimum Tax?

Pillar Two is one component of the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 framework. Its objective is to ensure that large MNE groups pay a minimum effective tax rate (ETR) of 15% on profits in every jurisdiction where they operate.

 

The rules are based on the Global Anti-Base Erosion (GloBE) Model Rules, which calculate the ETR of each Constituent Entity within an MNE group on a jurisdictional basis. Where a jurisdiction’s ETR falls below 15%, a top-up tax is charged to bring the group’s rate up to the minimum.

 

More than 140 countries participated in the OECD agreement. Singapore, as a major regional financial and business hub, has adopted Pillar Two to maintain its standing as a compliant and transparent tax jurisdiction while continuing to offer competitive incentives for substantive operations.

Singapore's Implementation: MTT and DTT Framework

Singapore has implemented Pillar Two through two distinct top-up taxes under the MMT Act:

1. Multinational Enterprise Top-up Tax (MTT)

The MTT is based on the Income Inclusion Rule (IIR). It applies to the low-taxed profits of group entities located outside Singapore, where the Singapore entity is the Ultimate Parent Entity (UPE) or an Intermediate Parent Entity (IPE) of those low-taxed entities.

 

In simple terms, if a subsidiary of your Singapore-headed group pays less than 15% effective tax in another jurisdiction, Singapore can collect a top-up tax from the Singapore parent entity to bring the group’s total rate to 15%.

2. Domestic Top-up Tax (DTT)

The DTT is Singapore’s Qualified Domestic Minimum Top-up Tax (QDMTT). It applies to the low-taxed profits of group entities located within Singapore, allowing Singapore itself to collect any top-up tax arising from Singapore operations before another jurisdiction does so under a foreign IIR.

 

The DTT is designed to protect Singapore’s tax base. It ensures that if a Singapore entity has an effective tax rate below 15%, Singapore — rather than a foreign government — collects the difference.

3. GloBE Information Return (GIR)

In addition to the MTT and DTT, in-scope MNE groups are required to file a GloBE Information Return. This is a standardised report covering the group’s ETR calculations, GloBE income, and covered taxes across all jurisdictions.

Which MNE Groups Are in Scope for Pillar Two Singapore?

An MNE group falls within the scope of the MMT Act if it meets both of the following conditions:

 

  • Revenue threshold: The group has consolidated annual revenue of €750 million or more in at least two of the four financial years immediately preceding the current financial year.
  • Singapore presence: The group has at least one Constituent Entity, joint venture, or reverse hybrid entity that is incorporated, registered, or located in Singapore.

 

A Constituent Entity includes companies, partnerships, trusts, or other entities that are included in the consolidated financial statements of the MNE group — or that would be included but for their size or materiality.

 

MNE groups that are below the €750 million revenue threshold are not subject to MTT or DTT under the current rules, though the GloBE framework is expected to apply to more groups over time as implementation expands globally.

Exclusions

Certain entities are excluded from the GloBE rules, including government entities, international organisations, non-profit organisations, pension funds, and investment funds that are Ultimate Parent Entities of their group. Specific exclusions also apply to certain shipping income and certain real estate investment structures.

Registration Deadlines: What You Need to Do Now

Registration is a mandatory one-time requirement for all in-scope MNE groups. It covers the MTT, DTT, and the GloBE Information Return.

Financial Year EndFirst FY Covered by MMT ActRegistration Deadline
31 DecemberFY 2025 (1 Jan – 31 Dec 2025)30 June 2026
31 MarchFY 2025/26 (1 Apr 2025 – 31 Mar 2026)30 September 2026
30 JuneFY 2025/26 (1 Jul 2025 – 30 Jun 2026)31 December 2026
30 SeptemberFY 2025/26 (1 Oct 2025 – 30 Sep 2026)31 March 2027

The registration deadline is within six months after the end of the first financial year to which the MMT Act applies.

Important: A 10% surcharge on any top-up tax payable may be imposed for failure to register on time. Groups should treat the registration deadline as a hard compliance deadline, not a discretionary target.

How to Register with IRAS for Pillar Two Top-Up Taxes

IRAS opened its online registration portal for MTT, DTT, and GIR in May 2026. Registration is completed electronically through IRAS’s tax portal.

Who registers?

The Ultimate Parent Entity (UPE) of the MNE group is responsible for registration. However, the UPE may appoint a Singapore Constituent Entity or a local tax agent to complete the registration on its behalf. A letter of authorisation is required when a Singapore entity or agent acts on behalf of a foreign UPE.

What information is required?

  • MNE group name and UPE details
  • Details of all Singapore Constituent Entities within the group
  • The financial year end of the group
  • The first financial year to which the MMT Act applies
  • Whether the group is subject to MTT, DTT, or both
  • Details of any agreed Filing Constituent Entity (FCE) responsible for the GIR

Local filing agent appointment

Groups headquartered outside Singapore whose UPE does not have direct access to the IRAS portal may appoint a Singapore-registered tax agent to complete registration and manage ongoing compliance obligations.

Understanding the Effective Tax Rate (ETR) Calculation

The GloBE ETR is calculated on a jurisdictional basis, not on a per-entity or per-transaction basis. It compares the GloBE Income or Loss of all Constituent Entities in a jurisdiction against the Covered Taxes paid by those entities.

 

GloBE Income differs from taxable income under domestic tax rules. It starts from the entity’s financial accounting profit or loss and applies specific GloBE adjustments, such as excluding certain dividend income, adding back deferred tax, and adjusting for certain tax credits.

 

Covered Taxes include current taxes on income accrued or paid in the financial year, as well as certain deferred taxes. Not all taxes qualify as Covered Taxes — for example, indirect taxes, employment taxes, and customs duties are generally excluded.

The Substance-Based Income Exclusion (SBIE)

The GloBE rules include an important carve-out known as the Substance-Based Income Exclusion (SBIE). This allows MNE groups to exclude a portion of income from the top-up tax calculation based on the value of tangible assets and payroll in each jurisdiction.

 

For groups with genuine operational substance in Singapore — employees, equipment, leased premises — the SBIE may significantly reduce or eliminate any Singapore-based top-up tax. This is relevant to groups considering where to locate operations and substance.

How Singapore's Existing Tax Incentives Are Affected

Pillar Two does not eliminate Singapore’s existing tax incentive framework. However, MNE groups that benefit from reduced corporate tax rates under Approved Trader schemes, Development Expansion Incentives, Global Trader Programme, or Fund Tax Exemptions may find that their effective tax rate in Singapore falls below 15%.

 

Where the ETR drops below 15%, the DTT will apply to top up the rate to 15% for Singapore-sourced income. In practice, this means the group’s total effective tax cost may not change — but the mix of taxes paid shifts from incentive-reduced corporate income tax to DTT.

 

Groups should model the post-Pillar Two effective rate for Singapore operations, taking into account the SBIE, applicable incentives, and covered tax positions.

Key Preparation Steps for In-Scope MNE Groups

Groups that have not yet begun Pillar Two preparation should act immediately, particularly those with a 31 December financial year-end facing the 30 June 2026 registration deadline.

Step 1: Confirm scope

Verify whether your MNE group exceeds the €750 million consolidated revenue threshold in at least two of the four preceding financial years. Confirm which Constituent Entities are present in Singapore.

Step 2: Appoint a Filing Constituent Entity

Designate a Filing Constituent Entity (FCE) responsible for submitting the GloBE Information Return on behalf of the group. The FCE should have access to the group’s consolidated financial data and GloBE calculations.

Step 3: Calculate preliminary ETRs

Prepare a preliminary jurisdictional ETR model using GloBE rules. Identify jurisdictions where the ETR may fall below 15% and quantify any potential top-up tax exposure.

Step 4: Assess data readiness

The GIR requires granular financial data at the Constituent Entity level. Groups that do not currently collect data in the format required by the GloBE rules will need to enhance their management reporting systems.

Step 5: Register with IRAS by the deadline

Complete the online registration through the IRAS tax portal, or appoint a local tax agent to do so on your behalf. Ensure the registration is completed before the applicable deadline for your financial year-end.

Frequently Asked Questions

Q1: Does Pillar Two apply to Singapore companies that are not part of a large MNE group?

No. Pillar Two only applies to MNE groups with consolidated annual revenue of €750 million or more in at least two of the four preceding financial years. Singapore companies that are standalone entities, part of smaller groups, or part of purely domestic groups are not in scope under the current rules.

Q2: My MNE group is headquartered outside Singapore. Does Pillar Two still apply?

Yes, if your group has at least one Constituent Entity incorporated, registered, or located in Singapore, and the group meets the €750 million revenue threshold. The Singapore entity may be subject to the Domestic Top-up Tax (DTT) if its effective tax rate in Singapore falls below 15%.

Q3: What happens if my group misses the registration deadline?

IRAS may impose a 10% surcharge on any top-up tax payable for failure to register on time. Registration should be treated as a mandatory compliance obligation, not a discretionary step. Groups unsure of their deadline should confirm based on their financial year-end date.

Q4: Can Singapore's corporate income tax incentives still be used after Pillar Two?

Yes. Singapore’s tax incentives remain available. However, where an incentive reduces the effective tax rate below 15%, the Domestic Top-up Tax will apply to bring the Singapore ETR to the minimum. The overall tax cost may not increase significantly if the SBIE carve-out for payroll and tangible assets applies.

Q5: What is the GloBE Information Return and when is it due?

The GloBE Information Return (GIR) is a detailed report covering the group’s GloBE income, covered taxes, and effective tax rates across all jurisdictions. It must be filed for each financial year the MMT Act applies. The first GIR for groups with a 31 December 2025 year-end will cover FY 2025. IRAS will confirm filing deadlines separately from registration.

Conclusion

Singapore’s implementation of Pillar Two through the Multinational Enterprise Top-up Tax and Domestic Top-up Tax represents a significant shift in the tax obligations of large MNE groups operating in or through Singapore.

 

For groups with consolidated revenue above €750 million and a Singapore presence, the rules are now active. The registration deadline for MNE groups with a 31 December 2025 financial year-end is 30 June 2026 — and failure to register carries a 10% surcharge on any top-up tax payable.

 

The interaction between Pillar Two, existing Singapore tax incentives, the SBIE carve-out, and the GloBE Information Return requirements makes this one of the most complex compliance developments in recent years.

 

If your group needs support with Pillar Two scope assessment, IRAS registration, ETR modelling, or GIR preparation, contact TY TEOH International to speak with our Singapore tax advisory team.

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Singapore Corporate Income Tax Rebate 2026: Who Qualifies and How to Claim

singapore corporate income tax

Singapore Corporate Income Tax Rebate 2026: Who Qualifies and How to Claim

Singapore’s Budget 2026 introduced a Corporate Income Tax (CIT) Rebate for Year of Assessment 2026, providing direct tax relief to companies at a time of continued global economic uncertainty.

 

The rebate was initially announced at 40% of tax payable. It was subsequently enhanced to 50% of corporate tax payable, subject to a maximum total benefit of SGD 40,000 per company.

 

For many Singapore SMEs, this is a meaningful reduction in the tax bill. However, the rebate conditions, the separate CIT Rebate Cash Grant, and how these interact with existing exemptions are not widely understood.

 

This guide explains exactly who qualifies, how much your company may receive, and what steps to take before filing your corporate tax return for YA 2026.

What Is the Corporate Income Tax Rebate for YA 2026?

The CIT Rebate for YA 2026 is a one-off tax relief measure announced under Singapore’s Budget 2026. It applies to all companies — whether tax resident or non-resident — that are liable to pay corporate income tax in Singapore.

 

The rebate is applied against the corporate tax payable after deducting other tax reliefs and incentives. It reduces the final amount of tax your company owes to IRAS for income earned in the period covered by YA 2026.

 

Unlike some relief measures that require separate applications, the CIT Rebate is automatically applied by IRAS when processing your tax assessment. Companies do not need to file a separate claim for the rebate itself.

CIT Rebate Rate and Maximum Benefit

The key figures for the YA 2026 CIT Rebate are:

  • Rebate rate: 50% of corporate income tax payable for YA 2026
  • Maximum total benefit: SGD 40,000 per company (combining rebate and cash grant)
  • Applicable companies: All companies that pay corporate income tax, tax resident or otherwise

 

The total maximum benefit of SGD 40,000 applies to the combined value of the CIT Rebate and the CIT Rebate Cash Grant (explained below). Companies with higher tax payable will receive a larger rebate, up to the cap.

ScenarioTax Payable (Before Rebate)CIT Rebate (50%)
Small companySGD 10,000SGD 5,000
Growing SMESGD 40,000SGD 20,000
Larger companySGD 80,000+SGD 40,000 (capped)
Loss-making companyNilSGD 2,000 (cash grant only)

 

Table: Illustrative examples. Actual rebate depends on final tax payable after exemptions. Cash grant of SGD 2,000 applies to active companies meeting the local employee condition.

What Is the CIT Rebate Cash Grant?

The CIT Rebate Cash Grant is a separate component designed to benefit active companies that pay little or no tax — for example, companies that are fully covered by the Start-Up Tax Exemption (SUTE) or Partial Tax Exemption (PTE) scheme.

 

Without the cash grant, loss-making or fully-exempt companies would receive no benefit from the rebate. The cash grant ensures that even these companies receive a minimum benefit, provided they meet the local employee condition.

Key conditions for the Cash Grant

Active company

The company must be carrying on a trade, business, or investment holding activity at the point of disbursement.

Local employee condition

The company must have employed at least one local employee (Singapore citizen or permanent resident) in calendar year 2025.

CPF contributions

The company must have made CPF contributions for that local employee. Shareholders who are also employees are excluded from this condition.

Cash grant amount

SGD 2,000 minimum benefit for qualifying companies.

IRAS will automatically disburse the CIT Rebate Cash Grant to qualifying companies. Disbursement was expected by the second quarter of 2026 for MNE groups with a 31 December 2025 year-end.

What Counts as a Local Employee?

For the purposes of the CIT Rebate Cash Grant, a local employee is a Singapore citizen or Singapore permanent resident employed by the company and for whom CPF contributions have been made.

 

Shareholders who are also employed by the company are explicitly excluded. This means a sole director-shareholder who draws director fees without CPF would not satisfy the local employee condition.

 

Companies that hire through a centralised payroll entity, a related company, or an employment agency may still qualify if they can demonstrate that they genuinely employed a local worker in 2025. These companies may appeal to IRAS via myTaxMail by 30 November 2026, using the subject header ‘Appeal for CIT Rebate Cash Grant’.

How the CIT Rebate Interacts with Tax Exemption Schemes

The CIT Rebate is applied after existing tax exemptions, not before. This means the rebate is calculated on the tax payable after the Start-Up Tax Exemption or Partial Tax Exemption has been deducted.

 

For companies already fully exempt from corporate income tax, the rebate itself may produce no further benefit. However, the separate CIT Rebate Cash Grant of SGD 2,000 is available to these companies if they meet the active company and local employee conditions.

Interaction with Enterprise Innovation Scheme (EIS)

Budget 2026 also enhanced the Enterprise Innovation Scheme for YA 2027 and YA 2028, allowing companies to claim 400% tax deductions on up to SGD 50,000 of qualifying AI expenditure per year of assessment.

 

While the EIS enhancement does not affect the YA 2026 CIT Rebate directly, companies investing in AI or digital capabilities should plan how these deductions interact with their overall tax position for future years.

Who Is Not Eligible for the CIT Rebate?

The CIT Rebate applies broadly, but there are certain situations where the benefit is limited or does not apply:

  • Companies with no taxable income: the rebate reduces tax payable, so no tax payable means no rebate. The cash grant is the relevant benefit for these companies.
  • Dormant companies: companies not carrying on a trade or business at the point of disbursement may not qualify for the cash grant.
  • Companies that did not employ any local staff in 2025: these companies do not meet the local employee condition for the cash grant.
  • Sole proprietorships and partnerships: the CIT Rebate applies to companies, not unincorporated businesses. Sole proprietors and partners are subject to individual income tax, not corporate income tax.

What Singapore Companies Should Do Before Filing YA 2026

The CIT Rebate is applied automatically — but there are steps companies can take to ensure they receive the maximum benefit and avoid filing errors.

1. File your Estimated Chargeable Income (ECI) on time

Companies must file their Estimated Chargeable Income with IRAS within three months of their financial year end, unless they qualify for ECI filing exemption. Late ECI filing may delay tax assessments.

2. Ensure CPF records are accurate for 2025

IRAS cross-references CPF Board data to determine whether the local employee condition has been met. Companies should ensure that CPF submissions for 2025 are complete and reconciled before the grant disbursement date.

3. Verify your company's active status

If your company was dormant at any point during 2025, confirm its operational status. A company that resumed operations before the disbursement date may still qualify if it is active at the point of disbursement.

4. Review your YA 2026 income tax return

Check that all eligible deductions, capital allowances and tax incentives are correctly claimed before the rebate is applied. The rebate is more valuable when applied against a lower base after proper deduction claims.

YA 2026 Corporate Tax Filing Deadlines

ObligationDeadlineNotes
ECI filingWithin 3 months of FYEUnless ECI waiver applies
Form C / C-S / C-S (Lite)30 November 2026Electronic filing via myTax Portal
CIT Rebate Cash Grant appeal30 November 2026Via myTaxMail if conditions met through special arrangements
CIT Rebate Cash Grant disbursementQ2 2026 (expected)Automatic for qualifying companies

Frequently Asked Questions

Q1: Does my company need to apply for the CIT Rebate?

No. The CIT Rebate for YA 2026 is applied automatically by IRAS when processing your corporate income tax assessment. You do not need to submit a separate application. However, if you believe your company qualifies for the CIT Rebate Cash Grant through a special arrangement (e.g. centralised hiring), you may need to appeal via myTaxMail by 30 November 2026.

Q2: My company made no profit in 2025. Can I still receive the cash grant?

Yes, provided your company is active and employed at least one local employee (Singapore citizen or permanent resident) in 2025 with CPF contributions made. Loss-making and tax-exempt companies are eligible for the SGD 2,000 CIT Rebate Cash Grant even though no CIT rebate would be generated against zero tax payable.

Q3: Does the CIT Rebate apply to holding companies and investment vehicles?

A company carrying on investment holding activity is considered an active company for the purposes of the cash grant. However, the CIT Rebate only reduces tax payable, so companies with no taxable income would only benefit from the cash grant component.

Q4: What is the difference between the CIT Rebate and the CIT Rebate Cash Grant?

The CIT Rebate is a 50% reduction in corporate income tax payable for YA 2026, capped at SGD 40,000 total benefit per company. The CIT Rebate Cash Grant is a separate SGD 2,000 minimum payout for active companies meeting the local employee condition. Together, the maximum benefit is SGD 40,000.

Q5: How does the CIT Rebate interact with the Start-Up Tax Exemption?

The Start-Up Tax Exemption reduces taxable income first. The CIT Rebate is then applied to the remaining tax payable. If the exemption fully covers your tax payable, the rebate may result in no further reduction. In that case, your company may still qualify for the SGD 2,000 Cash Grant if the local employee condition is met.

Conclusion

The Singapore Corporate Income Tax Rebate for YA 2026 offers meaningful relief to most Singapore companies, with a 50% rebate on tax payable and a minimum SGD 2,000 cash grant for active companies that employed local staff in 2025.

 

The maximum total benefit of SGD 40,000 applies to the combined CIT Rebate and Cash Grant. Companies do not need to apply for the rebate, but should ensure their tax filings, CPF records and ECI submissions are in order before the relevant deadlines.

 

For companies managing multiple exemptions, deductions and incentives, the interaction between these measures and the CIT Rebate may require careful review.

 

If you would like support with corporate tax compliance, deduction optimisation or YA 2026 filing, contact TY TEOH International for a consultation with our Singapore tax advisory team.

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Merger and Acquisition in Singapore: M&A Process, Valuation, Due Diligence and Tax Guide

Merger and Acquisition in Singapore M&A Process, Valuation, Due Diligence and Tax Guide

Valuation for Financial Reporting in Singapore: Audit & SFRS Requirements Explained

Singapore is one of Asia’s most active hubs for merger and acquisition activity.

 

Its stable legal system, transparent regulatory framework, and pro-business environment make it an attractive destination for both domestic and cross-border M&A deals.

 

But executing a successful merger or acquisition requires far more than identifying the right target.

 

Buyers and sellers must navigate a structured process — from strategic planning and business valuation to legal due diligence, tax structuring, and regulatory approvals.

 

This guide covers everything B2B stakeholders need to know about merger and acquisition in Singapore — step by step.

What Is a Merger and Acquisition?

A merger occurs when two companies combine to form a single new entity.

 

An acquisition occurs when one company purchases another — taking control of its assets, operations, or shares.

 

Both are categorised broadly under the term “M&A”, though the legal and financial mechanics differ significantly.

 

In Singapore, M&A activity spans many sectors: technology, healthcare, financial services, manufacturing, and real estate.

 

Deals range from small private company buyouts to large public-listed takeovers governed by the Singapore Code on Take-overs and Mergers.

M&A Transaction Structures in Singapore

Choosing the right transaction structure is one of the first and most consequential decisions in any deal.

 

In Singapore, there are three primary structures for acquiring a business:

 

Share Purchase

The buyer acquires the target company’s shares directly from existing shareholders.

 

This transfers the entire legal entity — including all assets, contracts, liabilities, and tax history.

 

Share purchases are the most common structure for private company acquisitions in Singapore.

 

Asset Purchase

The buyer selects specific assets and liabilities to acquire, leaving unwanted obligations behind.

 

This provides cleaner exposure but requires individual assignment of contracts, licences, and registrations.

 

Note: asset transfers may attract GST and are subject to corporate income tax at 17%.

 

Scheme of Arrangement

Used primarily for public company takeovers, a scheme requires court approval and shareholder voting.

 

Once approved, the scheme binds all shareholders — eliminating the need to buy out each holder individually.

 

SPACs (Special Purpose Acquisition Companies) have also emerged as an alternative M&A vehicle. Learn more about how SPACs work and SPAC merger benefits for companies considering this route.

The M&A Process in Singapore: Step by Step

A typical Singapore M&A transaction follows six core stages:

1. Strategic Planning and Target Identification

The acquirer defines its M&A objectives — market expansion, technology acquisition, revenue diversification, or cost synergies.

 

Potential targets are screened based on financial health, strategic fit, market position, and operational compatibility.

 

Financial advisors and investment bankers are typically engaged at this early stage.

2. Due Diligence

Due diligence is a comprehensive investigation of the target company.

 

It covers legal, financial, tax, commercial, and operational dimensions.

 

The goal is to uncover risks, validate assumptions, and inform deal pricing and structure.

3. Valuation

A formal valuation of the target is conducted to determine a fair transaction price.

 

Multiple methodologies are typically applied in parallel to establish a defensible valuation range.

4. Negotiation and Sale & Purchase Agreement

Binding deal terms are negotiated, including price, representations and warranties, conditions precedent, and completion mechanics.

 

The Sale and Purchase Agreement (SPA) is the primary legal instrument governing the transaction.

5. Regulatory Approvals

Depending on the deal type, approvals may be required from ACRA, MAS, CCCS, or sector-specific regulators.

 

Public company deals must comply with the Singapore Code on Take-overs and Mergers, overseen by the Securities Industry Council (SIC).

6. Completion and Integration

Once conditions are satisfied, the transaction is completed and ownership transfers.

 

Post-merger integration — aligning systems, teams, culture, and operations — determines whether the deal ultimately creates value.

Business Valuation in Singapore M&A

Understanding how a target company is valued is essential for both buyers and sellers. Business valuation in M&A directly influences deal pricing, negotiation leverage, and financing decisions.

 

Three core valuation approaches are used in Singapore M&A transactions:

Discounted Cash Flow (DCF) Analysis

DCF estimates the present value of a company’s expected future free cash flows.

 

A discount rate — typically the Weighted Average Cost of Capital (WACC) — is applied to reflect the time value of money and risk.

 

DCF is most useful for businesses with predictable, long-term revenue streams.

 

Comparable Company Analysis (Trading Comps)

This method benchmarks the target against publicly listed peers using valuation multiples such as EV/EBITDA or EV/Revenue.

 

It reflects current market sentiment and provides a real-time valuation reference point.

 

Precedent Transactions Analysis

Analysts examine completed M&A transactions involving similar companies to understand what buyers actually paid.

 

This method captures deal premiums not reflected in listed company multiples.

 

For a deeper look at these methodologies, refer to our business valuation guide for Singapore. Best practice is to triangulate all three methods to arrive at a credible valuation range.

Due Diligence in Singapore M&A

Due diligence is the critical risk identification phase of any merger or acquisition.

In Singapore, it typically spans four workstreams:

Legal Due Diligence

Legal advisors review corporate structure, shareholding, contracts, licences, IP, employment agreements, and ongoing litigation.

 

For share purchases, legal DD assesses all obligations and liabilities the buyer will inherit.

 

Undisclosed litigation or regulatory penalties can materially affect deal pricing or structure.

Financial Due Diligence

Financial DD analyses the target’s financial statements, typically over the last three years.

 

Auditors assess revenue quality, working capital movements, debt obligations, and off-balance-sheet items.

 

Financial statements should comply with Singapore Financial Reporting Standards (SFRS) or equivalent international standards.

Tax Due Diligence

Tax advisors examine the target’s corporate income tax history, GST compliance, and withholding tax obligations.

 

Transfer pricing arrangements and thin capitalisation are high-risk areas — particularly for companies with cross-border related-party transactions.

 

Any unresolved tax assessments or disputes with IRAS must be fully disclosed and factored into deal pricing.

Commercial and Operational DD

This workstream validates the business model, customer concentration, competitive positioning, and growth assumptions.

 

It provides the commercial context that financial numbers alone cannot tell.

Tax Implications of M&A in Singapore

Singapore’s tax framework is highly favourable for M&A transactions — but the specific implications depend on how the deal is structured.

No Capital Gains Tax

Singapore does not impose capital gains tax.

 

Gains on the sale of shares in a Singapore company are generally not taxable for the seller.

 

However, gains on the sale of trading assets (as opposed to capital assets) may be subject to corporate income tax at 17%.

Stamp Duty on Share Transfers

Share transfers attract stamp duty at 0.2% of the higher of the net asset value or purchase price.

 

Under the Stamp Duties Act, the buyer bears the stamp duty cost unless agreed otherwise in the SPA.

 

Asset purchases may attract higher transaction costs, including potential GST on the transfer of business assets.

IRAS M&A Scheme

The Inland Revenue Authority of Singapore (IRAS) administers the M&A Scheme, which offers tax allowances for qualifying acquisitions.

 

Acquirers may claim a 25% allowance on qualifying acquisition costs, capped at S$40 million per year of assessment.

 

Stamp duty relief is also available for qualifying M&A transactions under this scheme.

Withholding Tax

Payments to non-resident vendors — such as technical fees, royalties, or interest — may be subject to Singapore withholding tax.

 

Rates vary (typically 10%–17%) and are subject to double tax treaty relief where applicable.

Regulatory Framework for M&A in Singapore

Singapore’s M&A landscape is governed by several key statutes and regulatory bodies:

 

  • Companies Act 1967: Governs corporate approvals. Under Section 160, shareholder approval is required for disposal of substantially all of a company’s assets.
  • Securities and Futures Act (SFA): Regulates listed company takeovers. The SIC administers the Singapore Code on Take-overs and Mergers.
  • Competition Act: The CCCS (Competition and Consumer Commission of Singapore) may review mergers that could substantially lessen competition. Voluntary notification is available; Phase 1 review takes up to 30 working days.
  • Sector-specific regulators: MAS approval is required for acquisitions in the financial services sector; IMDA for telecoms; CAAS for aviation.

 

Buyers considering SPACs as an acquisition vehicle should also review SPAC vs IPO comparisons and the key risks and challenges of SPACs before proceeding.

Frequently Asked Questions

Q1: Is there capital gains tax on M&A transactions in Singapore?

No. Singapore does not have a capital gains tax. Proceeds from the sale of shares are generally not taxable for the seller. However, the disposal of trading assets (not capital assets) may attract corporate income tax at the prevailing rate of 17%.

Q2: What stamp duty applies to share transfers in a Singapore M&A?

Stamp duty is charged at 0.2% of the higher of the net asset value or the purchase consideration. The buyer bears the stamp duty cost by default under the Stamp Duties Act, unless the SPA specifies otherwise.

Q3: Is regulatory approval mandatory for M&A deals in Singapore?

Not always. For private company deals, no mandatory merger notification exists with the CCCS, though voluntary notification is recommended for transactions with competition implications. Listed company takeovers must comply with the Singapore Code on Take-overs and Mergers, administered by the SIC.

Q4: What valuation method is most commonly used in Singapore M&A?

Most deals use a combination of DCF analysis, comparable company multiples (EV/EBITDA), and precedent transactions. No single method is definitive — advisors typically triangulate all three to establish a defensible valuation range and strengthen negotiation positions.

Q5: What is a SPAC and how does it relate to M&A in Singapore?

A5: A SPAC (Special Purpose Acquisition Company) is a listed shell company formed specifically to acquire a private target through a reverse merger. 

 

Singapore’s SGX launched a SPAC listing framework in 2022, creating a new route for private companies to go public via acquisition. Learn more about how SPACs work, whether a SPAC is a reverse merger, and SPAC stock performance after merger.

Conclusion

Merger and acquisition in Singapore offers significant strategic value — but only when executed with rigorous planning, professional due diligence, and sound tax structuring.

 

From choosing the right transaction structure to navigating CCCS merger control and IRAS tax incentives, every stage requires specialist expertise.

 

Buyers should approach valuation with multiple methodologies, ensure all tax exposures are identified during due diligence, and build a post-merger integration plan from day one.

 

For expert guidance on business valuation, deal structuring, and M&A strategy in Singapore, visit Ty Teoh Advisory — or explore our in-depth resources on the role of business valuation in M&A.

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Merger and Acquisition Due Diligence Checklist for Singapore Companies

Merger and Acquisition Due Diligence Checklist for Singapore Companies

Valuation for Financial Reporting in Singapore: Audit & SFRS Requirements Explained

Due diligence is the backbone of every successful merger and acquisition.

 

Without it, buyers risk inheriting hidden liabilities, undisclosed litigation, and tax exposures that can unravel even the most strategically sound deal.

 

In Singapore, M&A due diligence spans legal, financial, tax, intellectual property, employment, and regulatory dimensions.

 

Each area carries its own risks — and its own Singapore-specific requirements.

 

This checklist covers everything a buyer needs to review before completing a merger or acquisition in Singapore — structured by workstream for practical use.

Why Due Diligence Is Non-Negotiable in Singapore M&A

Singapore’s stable legal system and transparent business environment do not eliminate deal risk.

 

Private companies in Singapore are not subject to continuous public disclosure obligations.

 

This means critical information — tax disputes, undisclosed debt, contractual landmines — may only surface during due diligence.

 

A comprehensive investigation also determines deal structure, pricing adjustments, and the representations and warranties in the Sale and Purchase Agreement (SPA).

 

Skipping or shortcutting due diligence is one of the most costly mistakes an acquirer can make.

How Long Does M&A Due Diligence Take in Singapore?

Timelines vary significantly based on deal size and complexity.

 

For mid-market private company acquisitions, due diligence typically runs 45 to 60 days.

 

Complex deals — with multi-jurisdictional operations, regulated industries, or disputed ownership — can extend to 6 to 9 months.

 

Both parties should agree on a realistic timeline at the Letter of Intent (LOI) stage, with extension provisions built into the agreement.

The 7 Core Due Diligence Workstreams for Singapore M&A

1. Corporate Structure and Legal Standing

Start by verifying the target is properly constituted and its ownership is exactly as represented.

 

Key documents to review include: company constitution, shareholder register, share certificates, and board and shareholder resolutions.

 

Confirm there are no undisclosed encumbrances on shares (pledges, charges, or options).

 

Check ACRA records to verify directors, shareholders, and corporate history.

 

Review any existing shareholder agreements, voting agreements, or rights of first refusal that could affect the acquisition.

2. Material Contracts and Change of Control Clauses

Review all key contracts: customer agreements, supplier arrangements, lease agreements, and loan facilities.

 

Identify any “change of control” or anti-assignment clauses.

 

These clauses can allow counterparties to terminate or renegotiate contracts when ownership changes — potentially undermining the deal’s value.

 

High-risk contracts include government licences, key customer agreements, and technology licence arrangements.

 

Consent requirements from third parties must be identified early and factored into completion conditions.

3. Financial Due Diligence

Financial DD validates the accuracy and sustainability of the target’s financial performance.

 

Request audited financial statements for the last three to five years, preferably prepared under SFRS.

 

  • Revenue quality: assess whether revenue is recurring, concentrated, or one-off.
  • Working capital: review accounts receivable ageing, inventory levels, and payables cycles.
  • Net debt: identify all borrowings, off-balance-sheet liabilities, and contingent obligations.
  • Cash flow: validate operating cash generation and identify any capital expenditure requirements.

 

Understanding the target’s financial health is foundational to accurate valuation. See our guide on business valuation in Singapore and the role of valuation in M&A.

4. Tax Due Diligence

Tax DD identifies historical exposures and ensures the target has a clean tax record.

Review the last five years of corporate income tax returns, IRAS assessments, and any outstanding tax disputes.

 

  • GST: confirm registration status, filing compliance, and any outstanding input tax disputes.
  • Withholding tax: verify compliance on all payments to non-residents (interest, royalties, service fees).
  • Transfer pricing: for companies with cross-border related-party transactions, review TP documentation and assess adequacy.
  • Pillar Two: for MNC groups, assess GloBE rules exposure — Singapore implemented domestic top-up tax from financial years starting on or after 1 January 2025.

 

Also check whether the acquisition qualifies for the IRAS M&A Scheme, which offers a 25% tax allowance on qualifying costs up to S$40 million per year of assessment.

5. Intellectual Propertynt

Intellectual property can be among the most valuable — and most vulnerable — assets in an M&A deal.

 

Verify that all IP is properly owned by the target company and not licensed from related parties or founders.

 

  • Patents: confirm registration, renewal status, and scope of protection.
  • Trademarks: verify registration in Singapore and any key overseas markets.
  • Software and source code: check ownership and review any open-source licence obligations that may restrict use.
  • IP licences: identify both inbound (licences the company relies on) and outbound (licences it has granted).

 

Any IP registered in a founder’s personal name rather than the company must be formally assigned before completion.

6. Employment and HR

Employment obligations transfer with the target company — making this a high-risk area for buyers.

 

Review all employment contracts, with particular attention to key management and technical staff.

 

  • Change of control clauses: some contracts allow employees to resign and claim compensation if ownership changes.
  • CPF compliance: verify all contributions are current and no arrears exist with the CPF Board.
  • Employment Pass holders: confirm all EP, S Pass, and work permit holders meet current Ministry of Manpower (MOM) criteria.
  • Fair Consideration Framework: ensure hiring practices are FCF-compliant to avoid MOM scrutiny.
  • Pending disputes: review any active employment claims at the Employment Claims Tribunals (ECT) or MOM.

7. Regulatory and Compliance

Identify all licences, permits, and regulatory approvals the target holds — and whether they transfer on acquisition.

 

Some licences are non-transferable and must be reapplied for by the new owner.

 

  • PDPA compliance: verify the target has a designated Data Protection Officer (DPO), a privacy policy, and documented data handling procedures.
  • PDPA breach history: confirm no unreported breaches to the PDPC (penalties can reach 10% of annual Singapore turnover for large organisations).
  • Sector-specific licences: financial services (MAS), telecommunications (IMDA), healthcare (MOH), or food (SFA) may each require separate review.
  • Environmental and safety: check for NEA or WSH compliance, especially for manufacturing or industrial targets.

Singapore-Specific Due Diligence Considerations

Several compliance areas are unique to Singapore and must be explicitly included in the due diligence scope.

PDPA and Data Protection

The Personal Data Protection Act (PDPA) governs how personal data is collected, used, and disclosed.

 

Amended in 2021, the PDPA now includes mandatory data breach notification and increased penalty thresholds.

 

Buyers must audit the target’s data flows, third-party data sharing arrangements, and breach response procedures.

Competition Law — CCCS Merger Control

Singapore has no mandatory merger filing requirement.

 

However, transactions that may substantially lessen competition should be voluntarily notified to the CCCS.

 

The CCCS Phase 1 review takes up to 30 working days; Phase 2 reviews take up to 120 working days.

 

Failure to notify and complete a deal that raises competition concerns can result in post-completion orders to unwind or modify the transaction.

Pillar Two and International Tax

For multinational groups, Singapore’s domestic minimum top-up tax applies from FY beginning on or after 1 January 2025.

 

Due diligence must assess how the target fits within the buyer’s group for GloBE purposes.

 

This is especially relevant where the acquisition involves a Singapore entity within a larger MNC structure.

Due Diligence for SPAC Mergers in Singapore

SPACs (Special Purpose Acquisition Companies) follow the same due diligence principles — but with additional layers of complexity.

 

Because a SPAC merger involves a listed shell company acquiring a private target, the due diligence process must also cover SGX listing rules and public disclosure obligations.

Investors should understand how SPACs work, whether a SPAC qualifies as a reverse merger, and the key risks and challenges unique to SPACs before proceeding with a de-SPAC transaction.

 

For context on how the SPAC route compares to conventional listings, see SPAC vs IPO explained and how SPAC stocks typically perform after merger.

Frequently Asked Questions

Q1: What are the main types of due diligence in a Singapore M&A transaction?

The four core workstreams are legal, financial, tax, and operational due diligence. In Singapore specifically, regulatory compliance (including PDPA), intellectual property, and employment due diligence are also treated as distinct, high-priority workstreams given local legal obligations.

Q2: How long does M&A due diligence typically take in Singapore?

For mid-market private deals, 45 to 60 days is standard. More complex transactions — involving regulated industries, cross-border structures, or contested ownership — can take 6 to 9 months. The timeline should be agreed at the LOI stage with clear extension provisions.

Q3: What is a "change of control" clause and why does it matter?

A change of control clause allows a counterparty (customer, supplier, lender, landlord) to terminate or renegotiate a contract when a company’s ownership changes. These clauses are common in commercial contracts, government licences, and employment agreements — and must be identified during due diligence to avoid value destruction post-acquisition.

Q4: Does PDPA compliance need to be reviewed during M&A due diligence in Singapore?

Yes. PDPA compliance is now a standard due diligence item. Buyers should verify the target has a Data Protection Officer, documented data handling procedures, and no unreported breaches. From late 2025, PDPA penalties for large organisations can reach 10% of annual Singapore turnover — making legacy non-compliance a material financial risk.

Q5: What tax benefits are available to acquirers in Singapore M&A?

The IRAS M&A Scheme allows qualifying acquirers to claim a 25% tax allowance on qualifying acquisition costs, capped at S$40 million per year of assessment. Stamp duty relief is also available under the scheme. Tax due diligence should confirm eligibility and ensure the deal structure preserves the allowance.

Conclusion

A thorough M&A due diligence checklist is one of the most valuable tools a Singapore buyer can have.

 

Each workstream — from corporate structure and material contracts to tax compliance and PDPA — surfaces risks that directly affect deal pricing, structure, and long-term value.

 

Singapore’s legal and regulatory environment is sophisticated but navigable with the right advisory team.

 

Buyers who invest in rigorous due diligence are better positioned to negotiate strong protections in the SPA and avoid post-acquisition surprises.

 

For expert guidance on M&A advisory, business valuation, and deal structuring in Singapore, visit TY Teoh Advisory. Also explore our guide on what to know before merging or acquiring.

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Employment Pass in Singapore: 2026 Guide to EP Eligibility, COMPASS, Salary and Application Process

Employment Pass in Singapore 2026 Guide to EP Eligibility, COMPASS, Salary and Application Process

Valuation for Financial Reporting in Singapore: Audit & SFRS Requirements Explained

Singapore remains one of Asia’s top destinations for foreign professionals — and the Employment Pass (EP) is the gateway to working here legally.

 

For businesses expanding into Singapore, understanding how the EP works is critical to hiring the international talent they need.

 

In 2026, EP applications follow a two-stage eligibility framework: a minimum qualifying salary (Stage 1) and the COMPASS points-based assessment (Stage 2).

 

Both criteria have been updated and tightened compared to prior years, with further increases scheduled for 2027.

 

This guide covers everything employers and HR teams need to know — from salary thresholds and COMPASS scoring to the application process, required documents, and how employer of record services can simplify the process.

What Is an Employment Pass in Singapore?

An Employment Pass (EP) is a work visa issued by Singapore’s Ministry of Manpower (MOM) to foreign professionals in managerial, executive, or specialist roles.

 

It is the primary work authorisation for white-collar foreign talent working in Singapore.

 

An EP is initially valid for up to 2 years. It can be renewed for up to 3 years per renewal.

 

Professionals in tech roles listed on MOM’s Shortage Occupation List (SOL) may qualify for a longer 5-year EP duration.

 

Critically, it is the employer — not the candidate — who applies for the EP on the foreign professional’s behalf via MOM’s myMOM Portal.

Who Is Eligible for an Employment Pass in Singapore?

To qualify for an EP in 2026, a candidate must meet all of the following conditions:

 

  • Hold a job offer from a Singapore-registered company for a managerial, executive, or specialist role.
  • Earn at least the EP qualifying salary for their age and sector (Stage 1).
  • Pass the COMPASS points-based assessment with at least 40 points (Stage 2) — unless exempted.
  • Hold acceptable qualifications from a recognised institution.

 

Candidates cannot apply for an EP themselves.

 

Their employer or an appointed employment agent must submit the application through myMOM Portal.

EP Qualifying Salary Requirements in Singapore 2026

The EP qualifying salary is benchmarked to the top one-third of local PMET salaries by age group.

 

This means the minimum threshold rises progressively as a candidate gets older and is presumed more experienced.

Current Salary Thresholds (2026)

For new applications and renewals before 1 January 2027:

 

  • Non-financial services sector: S$5,600/month (age 23 or below) to S$10,700/month (age 45 and above).
  • Financial services sector: S$6,200/month (age 23 or below) to S$11,800/month (age 45 and above).

Upcoming Salary Increases from 1 January 2027

MOM has announced further threshold increases for new applications from 1 January 2027,

 

and for renewals of passes expiring from 1 January 2028:

 

  • Non-financial services: S$6,000/month (age 23 or below) to S$11,500/month (age 45 and above).
  • Financial services: S$6,600/month (age 23 or below) to S$12,700/month (age 45 and above).

 

Employers should plan hires well in advance of January 2027 to lock in current thresholds

COMPASS Exemption Threshold

Candidates earning a fixed monthly salary of at least S$22,500 are exempt from COMPASS.

 

Intra-corporate transferees and candidates filling roles of one month or less are also exempt.

COMPASS: Singapore's Points-Based EP Assessment Explained

COMPASS — the Complementarity Assessment Framework — was introduced by MOM in September 2023.

It is a transparent points-based system requiring EP candidates to score at least 40 points to pass.

COMPASS assesses both the individual candidate and the hiring firm, reflecting Singapore’s goal to balance foreign hiring with local workforce development.

COMPASS CriterionWhat It MeasuresMax Points
C1: SalaryCandidate salary vs local PMET salaries in sector (by age)20
C2: QualificationsAcademic credentials — top-tier vs other degree-equivalent20
C3: DiversityCandidate nationality share among firm’s PMETs20
C4: Local EmploymentFirm’s local PMET share relative to sector average20
C5: Skills Bonus (SOL)Role on MOM’s Shortage Occupation List20 (bonus)
C6: SEP BonusFirm in eligible strategic economic priorities programme10 (bonus)

C1: Salary Benchmark

This compares the candidate’s salary against local PMET salaries in the same sector, by age.

 

  • At or above 90th percentile: 20 points.
  • 65th to below 90th percentile: 10 points.
  • Below 65th percentile: 0 points.

C2: Qualifications

Points are awarded based on the prestige of the candidate’s institution.

 

  • Top-tier institutions (top 100 QS World University Rankings, Singapore Autonomous Universities, or sector-endorsed): 20 points.
  • Other degree-equivalent qualifications (foreign degrees assessed as equivalent to a UK bachelor’s, or recognised professional qualifications): 10 points.
  • No degree-equivalent qualifications: 0 points.

C3: Nationality Diversity

This criterion rewards firms where the candidate’s nationality is underrepresented.

 

  • Candidate’s nationality is less than 5% of firm’s PMETs: 20 points.
  • 5% to below 25%: 10 points.
  • 25% or more: 0 points.

 

Firms with fewer than 25 PMET employees automatically receive 10 points under this criterion.

criterion. C4: Support for Local Employment

This assesses the firm’s local PMET share relative to its sector average.

 

  • At or above 50th percentile of sector: 20 points.
  • 20th to below 50th percentile: 10 points.
  • Below 20th percentile: 0 points.

 

Firms with fewer than 25 PMETs receive 10 points by default.

 

Firms with a local PMET share of at least 70% also receive a minimum of 10 points regardless of sector standing.

C5: Skills Bonus — Shortage Occupation List (SOL)

Bonus points are available for roles on MOM’s Shortage Occupation List — roles where local talent is scarce.

 

  • Role on SOL + candidate nationality under 1/3 of firm’s PMETs: 20 points.
  • Role on SOL + candidate nationality at or above 1/3 of firm’s PMETs: 10 points.

C6: Strategic Economic Priorities (SEP) Bonus

Firms that are active partners in Singapore’s innovation or internationalisation ecosystem can earn 10 bonus points.

 

Eligible programmes are endorsed by agencies such as EDB, Enterprise Singapore, or NTUC.

 

The SEP bonus is valid for up to 3 years and is subject to renewal conditions.

How to Apply for an Employment Pass in Singapore: Step-by-Step

Step 1: Advertise the Role via Fair Consideration Framework (FCF)

Before submitting an EP application, employers must advertise the role on MyCareersFuture for at least 14 calendar days.

 

This gives Singaporeans and permanent residents a fair opportunity to apply.

 

Roles with a fixed monthly salary of S$22,500 or more, or intra-corporate transfers, are exempt from the FCF advertising requirement.

Step 2: Run the Self-Assessment Tool (SAT)

MOM’s Self-Assessment Tool (SAT) allows employers and employment agents to check a candidate’s likely COMPASS score and EP eligibility before submitting a formal application.

 

Using the SAT reduces the risk of rejection and speeds up the process.

Step 3: Gather Required Documents

The employer or employment agent collects the following:

 

  • Candidate’s updated resume.
  • Copies of educational certificates and transcripts.
  • Testimonials or references from previous employers.
  • Passport-sized photograph (taken within the last 3 months).
  • Copy of passport biographical page.
  • Company’s ACRA business profile.
  • Detailed job description for the proposed role.
  • Description of the company’s products and activities.

 

Indian candidates must also provide semester transcripts. Chinese candidates must provide China-verified academic credentials through CDGDC or Dataflow.

Step 4: Submit via myMOM Portal

The employer or employment agent submits the application through myMOM Portal.

 

Overseas companies without a Singapore presence must use an appointed local sponsor and submit via a separate sponsorship form.

Step 5: Await In-Principle Approval (IPA)

Processing takes approximately 3 weeks for locally sponsored applications.

 

Overseas-sponsored applications take up to 8 weeks.

 

If approved, an In-Principle Approval (IPA) letter is issued and is valid for 6 months.

 

The candidate must arrive in Singapore within this 6-month window.

Step 6: Issue the EP Card

After the candidate arrives in Singapore, the employer completes the EP issuance process — including fingerprint and photo registration if required.

 

The physical EP card is then issued, valid for up to 2 years.

Can Employment Pass Holders Bring Family to Singapore?

Yes — EP holders earning at least S$6,000 per month may sponsor their immediate family.

 

The employer submits separate applications for each family member.

 

Two types of pass are available:

 

  • Dependent’s Pass (DP): for legally married spouses and unmarried children under 21.
  • Long Term Visit Pass (LTVP): for common-law spouses, step-children under 21, handicapped unmarried children above 21, and parents of EP holders earning at least S$12,000/month.

 

DP holders may apply for an EP, S Pass, or work permit separately if they wish to work in Singapore.

Common Reasons EP Applications Are Rejected

Understanding rejection triggers helps employers prepare stronger applications.

 

  • Role does not qualify as managerial, executive, or specialist.
  • Candidate’s salary falls below the EP qualifying salary threshold for their age.
  • Candidate applied for the EP directly instead of the employer.
  • Qualifications are insufficient for the role declared.
  • Employer cannot demonstrate genuine need for a foreign hire.
  • FCF advertising requirement was not fulfilled or documented properly.
  • Employer has a history of discriminatory HR practices on record with MOM.
  • Employer’s financials or business standing are unsatisfactory.
  • Discrepancies between information declared and documents submitted.

 

Rejected applications may be appealed by the employer or employment agent within 3 months.

 

Appeals take approximately 6 weeks to process.

Employment Pass and Employer of Record Services in Singapore

For overseas companies that want to hire foreign professionals in Singapore without first incorporating locally, Employer of Record (EOR) services offer a practical solution.

 

An EOR acts as the legal employer in Singapore, sponsoring the EP application and managing payroll, CPF obligations, and employment compliance on your behalf. See how EOR compares to in-house HR for global hiring.

 

For a detailed breakdown of how these services work in Singapore’s regulatory context, refer to this guide on employer of record services in Singapore.

 

This is particularly valuable for companies testing the Singapore market before committing to a full legal entity setup.

 

It is also important to distinguish between different outsourcing models. For clarity on the key differences, see the difference between payroll and PEO services and how PEO and EOR services work in Singapore.

Work Pass Compliance Under EOR Arrangements

Singapore has specific regulations governing EOR arrangements and work pass sponsorship. See Singapore EOR services and work pass regulations for a practical compliance overview.

 

The sponsoring EOR entity must be a registered Singapore company in good standing with MOM.

 

The EP is filed under the EOR’s UEN, and the EOR bears employer obligations including CPF contributions for Singapore citizens and PRs, and proper employment contract terms.

 

Companies looking to outsource payroll alongside their EP management can explore what payroll process outsourcing entails.

 

For companies ready to get started, visit TY Teoh Advisory for Singapore EOR and EP advisory services.

Frequently Asked Questions

Q1: What is the minimum salary for an Employment Pass in Singapore in 2026?

The minimum qualifying salary for new EP applications is S$5,600 per month for the non-financial services sector, and S$6,200 per month for financial services. These thresholds increase progressively with age — candidates aged 45 and above must earn at least S$10,700 (non-financial) or S$11,800 (financial). From 1 January 2027, these thresholds will rise further.

Q2: What is COMPASS and how many points do you need to pass?

COMPASS (Complementarity Assessment Framework) is MOM’s points-based assessment for EP applications. Candidates need at least 40 points across six criteria: salary benchmark, qualifications, nationality diversity, support for local employment, a skills bonus for shortage occupations, and a strategic economic priorities bonus. Candidates earning S$22,500 or more per month are exempt from COMPASS entirely.

Q3: How long does an EP application take to process?

Applications sponsored by a Singapore-registered company take approximately 3 weeks to process. Applications submitted by an overseas company without a local presence take up to 8 weeks. MOM may request additional documents in either case, which can extend the timeline.

Q4: Can an overseas company sponsor an Employment Pass without a Singapore entity?

Yes, but the overseas company must appoint a local sponsor to submit the EP application on its behalf. Many businesses use Employer of Record (EOR) services to act as the sponsoring employer in Singapore — enabling them to hire foreign professionals compliantly without first incorporating a local entity.

Q5: What happens if an EP application is rejected?

The employer or employment agent (not the candidate) can appeal the rejection within 3 months. Appeals take approximately 6 weeks. A strong appeal must directly address the reasons stated in the rejection letter and may include additional supporting documents. Repeated appeals without new information are unlikely to succeed.

Conclusion

The Employment Pass remains Singapore’s primary route for companies to bring in senior foreign professionals.

 

In 2026, the two-stage framework — qualifying salary plus COMPASS — means both the candidate’s profile and the employer’s workforce composition matter.

 

Salary thresholds are set to increase again in January 2027, so companies planning international hires should act with that timeline in mind.

 

For companies without a Singapore entity, EOR services provide a compliant path to sponsor EPs, manage payroll, and build a local team without the overhead of full incorporation.

 

For expert guidance on EP applications, employer of record services, and Singapore HR compliance, visit TY Teoh Advisory.

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COMPASS Framework Singapore: How It Affects Employment Pass Applications

COMPASS Framework Singapore: How It Affects Employment Pass Applications

Valuation for Financial Reporting in Singapore: Audit & SFRS Requirements Explained

Since September 2023, getting an Employment Pass in Singapore is no longer just about meeting a minimum salary.

 

Most applications are now assessed under COMPASS — the Complementarity Assessment Framework — a structured points-based system introduced by MOM.

 

COMPASS evaluates both the candidate’s individual profile and the hiring company’s workforce composition.

This dual assessment means that two candidates with identical qualifications and salaries can receive different outcomes depending on who is sponsoring them.

 

For HR managers and business owners, understanding COMPASS is therefore as much about knowing your company’s workforce profile as it is about the candidate.

 

This guide explains how COMPASS works, how each criterion is scored, what triggers rejections, and how employer of record services interact with COMPASS compliance.

What Is COMPASS and Why Was It Introduced?

COMPASS stands for the Complementarity Assessment Framework, a points-based eligibility system used by Singapore’s Ministry of Manpower (MOM) to assess Employment Pass applications.

 

It was introduced to move beyond simple salary thresholds and evaluate whether a foreign hire genuinely complements Singapore’s local workforce.

 

The framework reflects two of Singapore’s core workforce policy goals:

 

  • Ensuring foreign professionals bring skills and value that are not easily sourced locally.
  • Encouraging companies to maintain diverse, balanced workforces that include strong local PMET representation.

 

According to RSM Stone Forest, the system evaluates an applicant’s overall profile, and only those who meet the required threshold will be considered for an EP.

 

COMPASS also introduced greater transparency — companies can now model their scores before applying and identify weaknesses in advance.

The Two-Stage Employment Pass Eligibility Framework

All EP applications must clear a two-stage eligibility framework before MOM will issue a pass.

Stage 1: EP Qualifying Salary

The candidate must earn at least the EP qualifying salary for their age group and sector.

 

For 2026, the minimum is S$5,600/month for non-financial services and S$6,200/month for financial services,

 

rising progressively with age to S$10,700 and S$11,800 respectively at age 45 and above.

 

Candidates who fail Stage 1 cannot proceed to COMPASS, regardless of how many points they would have scored.

Stage 2: COMPASS

Unless exempt, the candidate must score at least 40 points across the COMPASS criteria.

 

It is important to note that scoring 40 points does not guarantee approval — it is the minimum threshold for MOM to consider the application.

 

MOM retains discretion over the final outcome and may consider additional factors such as commercial credibility of the role and the employer’s standing.

How the COMPASS Scoring System Works

Scoring Tiers: 0, 10, and 20 Points

Each COMPASS criterion is scored on one of three tiers:

 

  • 20 points: exceeds expectations.
  • 10 points: meets expectations.
  • 0 points: does not meet expectations.

 

The four foundational criteria can each award up to 20 points, for a maximum of 80 foundational points.

 

Two bonus criteria — the Skills Bonus and Strategic Economic Priorities Bonus — can add up to 30 additional points.

 

A minimum total of 40 points from any combination of criteria is required to pass.

The Six COMPASS Criteria at a Glance

Criterion What It Assesses Points Available Type
C1: Salary Candidate salary vs local PMET sector benchmarks by age 0 / 10 / 20 Foundational
C2: Qualifications Academic credentials from top-tier or recognised institutions 0 / 10 / 20 Foundational
C3: Diversity Candidate nationality share among firm’s PMETs 0 / 10 / 20 Foundational
C4: Local Employment Firm’s local PMET share vs sector average 0 / 10 / 20 Foundational
C5: Skills Bonus Role on MOM’s Shortage Occupation List (SOL) Up to 20 (bonus) Bonus
C6: SEP Bonus Firm enrolled in strategic economic priorities programme Up to 10 (bonus) Bonus

The key insight is that COMPASS allows criteria to offset each other.

 

A candidate who scores 0 on salary can still pass if they score strongly on diversity, qualifications, and local employment support.

 

This flexibility is intentional — MOM designed the system to assess overall complementarity, not to penalise a single weak score.

The Four Foundational Criteria in Depth

C1: Salary Competitiveness

C1 benchmarks the candidate’s proposed salary against the salaries of local PMETs in the same sector, by age group.

 

This is separate from Stage 1’s minimum qualifying salary — C1 is about how competitive the salary is relative to sector peers.

 

  • At or above 90th percentile of local PMET salaries in the sector: 20 points.
  • 65th to below 90th percentile: 10 points.
  • Below 65th percentile: 0 points.

 

Salary must also align with the seniority of the role and the company’s commercial activities.

 

A high salary that does not match the declared job scope can still attract scrutiny during assessment.

C2: Qualifications

C2 awards points based on the prestige and recognition of the candidate’s academic credentials.

 

  • Degree from a top-tier institution (top 100 QS World University Rankings, Singapore Autonomous Universities, or sector-endorsed): 20 points.
  • Other degree-equivalent qualifications: 10 points.
  • No degree-equivalent qualification: 0 points.

 

Candidates without a degree can still pass COMPASS if they score sufficiently on other criteria.

 

Where qualification points are claimed, verification is mandatory.

 

All post-secondary diplomas and higher qualifications must be verified by an MOM-approved third-party background screening agency before the EP application is submitted.

 

Verification typically takes 1 to 2 weeks. Employers should plan for this lead time and obtain the verification number before filing.

C3: Workforce Nationality Diversity

C3 rewards applications where the candidate’s nationality is underrepresented in the hiring firm’s PMET workforce.

 

  • Candidate’s nationality makes up less than 5% of the firm’s PMETs: 20 points.
  • 5% to below 25%: 10 points.
  • 25% or more: 0 points.

 

For firms with fewer than 25 PMET employees, a default score of 10 points applies.

 

This criterion directly ties EP outcomes to the firm’s existing hiring patterns.

 

Companies that have concentrated hiring from a single nationality will find it harder to obtain EPs for more candidates of that same nationality.

C4: Support for Local PMET Employment

C4 assesses the firm’s commitment to local talent by comparing its local PMET share to its sector peers.

 

  • Local PMET share at or above the 50th percentile of the sector: 20 points.
  • 20th to below 50th percentile: 10 points.
  • Below 20th percentile: 0 points.

 

Firms with fewer than 25 PMETs receive 10 points by default.

 

Firms with a local PMET share of at least 70% always score at least 10 points, regardless of sector standing.

 

This criterion means that companies building heavily foreign-dominated teams may face increasing difficulty sponsoring additional EP holders over time.

Bonus Criteria That Can Tip Your COMPASS Score

C5: Skills Bonus — Shortage Occupation List (SOL)

The SOL bonus is available when the role is listed on MOM’s Shortage Occupation List — occupations where Singapore faces a genuine local talent shortage.

 

  • Role on SOL + candidate nationality comprises less than 1/3 of firm’s PMETs: 20 points.
  • Role on SOL + candidate nationality comprises 1/3 or more of firm’s PMETs: 10 points.

 

To claim SOL bonus points, the candidate must perform the specific job duties listed for the shortage occupation.

 

If the SOL bonus was needed to pass COMPASS, the EP holder can only work in that specific occupation — redeployment requires MOM notification and reassessment.

C6: Strategic Economic Priorities Bonus

The SEP bonus rewards companies that are active partners in Singapore’s innovation and internationalisation ecosystem.

 

Eligible activities are endorsed by agencies such as EDB, Enterprise Singapore, or NTUC — 10 points.

 

The bonus is valid for up to 3 years and is subject to renewal, with the firm required to maintain at least 10 points each under C3 and C4 throughout.

Who Is Exempt from COMPASS?

Three categories of EP applicants are exempt from the COMPASS assessment entirely:

 

  • High earners: candidates with a fixed monthly salary of at least S$22,500.
  • Overseas intra-corporate transferees: senior staff transferred within a multinational company.
  • Short-term roles: candidates filling a role for one month or less.

 

Exempted candidates must still meet the EP qualifying salary (Stage 1).

 

For most standard commercial hires, the exemption threshold of S$22,500 is significantly above market, meaning the vast majority of EP applications will go through COMPASS.

How to Check Your COMPASS Score Before Applying

MOM provides two key tools for employers to model their COMPASS position before submitting an application.

Self-Assessment Tool (SAT)

The SAT allows employers and employment agents to generate an indicative COMPASS score analysis before filing.

 

It considers the candidate’s salary, qualifications, job role, and the company’s workforce profile.

 

The SAT result is not binding — MOM’s formal assessment may differ — but it significantly reduces the risk of a preventable rejection.

Workforce Insights Tool

Available on the myMOM Portal, the Workforce Insights Tool shows employers their current C3 Diversity and C4 Local Employment scores,

 

along with sector benchmarking data for salary and non-monetary benefits.

 

Employers should run this tool before hiring to understand where they sit on the COMPASS matrix and whether a new hire will strengthen or weaken their scores.

Why Applications Fail COMPASS — Common Rejection Triggers

According to immigration advisory firm Transform Borders, most EP rejections occur from a combination of factors rather than a single issue.

 

Common rejection scenarios include:

 

  • Salary meets the Stage 1 minimum but falls below the 65th percentile for the sector — scoring 0 on C1 while also scoring weakly on other criteria.
  • Candidate has strong qualifications but the employer’s workforce profile scores 0 on both C3 and C4 due to high nationality concentration and low local PMET share.
  • Newly incorporated company submitting an application before establishing sufficient operational evidence or commercial credibility.
  • Application documentation fails to clearly explain the commercial rationale for hiring a foreign professional at that salary level.
  • Qualification verification not completed before submission — missing verification number and proof causes the application to be incomplete.

 

For borderline applications, improvements often come from clarifying the role scope, aligning salary with market expectations, and strengthening documentation of the company’s operations.

How COMPASS Affects Employer of Record Services in Singapore

For overseas companies entering Singapore, Employer of Record (EOR) services have an important relationship with COMPASS.

 

Because C3 and C4 are assessed at the employer’s entity level, the EOR’s workforce profile — not the client’s — is what MOM evaluates for COMPASS purposes.

 

Understanding how this works in practice is critical when comparing EOR services vs in-house HR for global hiring.

 

A well-established EOR with a diverse, local-heavy PMET workforce will typically score better on C3 and C4 than a newly incorporated shell entity.

 

This can make the difference between an approved and a rejected EP application when the candidate’s own profile is borderline.

 

For a detailed explanation of how EOR arrangements work under Singapore work pass regulations, see Singapore EOR services and work pass compliance.

 

Companies considering EOR as a model should also understand the difference between payroll outsourcing and PEO services, and how PEO and EOR services are structured in Singapore.

Using EOR to Navigate COMPASS Strategically

Companies that lack the local workforce depth to score well on C4, or that already have high nationality concentration in their team, often find EOR arrangements advantageous.

 

The EOR acts as the MOM-compliant sponsoring employer while the client company retains operational control of the employee’s work.

 

For businesses looking to understand the full EOR model in Singapore, this guide to employer of record services covers eligibility, cost, and compliance considerations.

 

Those interested in payroll outsourcing alongside EOR arrangements can explore how payroll process outsourcing works.

For expert guidance on COMPASS, EP applications, and employer of record services in Singapore, visit TY Teoh Advisory.

Frequently Asked Questions

Q1: What is the minimum score needed to pass COMPASS for an Employment Pass in Singapore?

Candidates must score at least 40 points across the COMPASS criteria to pass Stage 2. Each of the four foundational criteria (salary, qualifications, diversity, local employment) can award 0, 10, or 20 points. Two bonus criteria can add up to 30 additional points. Scoring 40 points is a threshold, not a guarantee — MOM still retains discretion over final approval.

Q2: Can an EP application pass COMPASS without a university degree?

Yes. Candidates without a degree-equivalent qualification score 0 under C2, but can still reach 40 points through strong scores on salary (C1), diversity (C3), local employment (C4), or the SOL skills bonus (C5). Candidates with very high salaries relative to sector benchmarks often compensate for a weak qualifications score. If the salary exceeds S$22,500/month, the candidate is exempt from COMPASS entirely.

Q3: Does COMPASS assess the candidate or the employer?

Both. Two of the four foundational criteria — C3 Diversity and C4 Support for Local Employment — assess the sponsoring firm’s workforce composition, not the candidate. This means the same candidate can score differently depending on which company is sponsoring the EP. Companies with a homogeneous workforce or low local PMET share will find COMPASS outcomes harder to achieve.

Q4: When should qualification verification be done relative to the EP application?

Qualification verification must be completed before submitting the EP application. All post-secondary diplomas and higher qualifications require verification by an MOM-approved background screening agency. The process takes approximately 1 to 2 weeks. The verification number and a copy of the proof are mandatory fields in the EP application — applications submitted without them will be incomplete.

Q5: How do Employer of Record services affect COMPASS scoring?

Under an EOR arrangement, MOM assesses the EOR entity’s workforce profile for C3 and C4 criteria — not the overseas client company’s. A well-established EOR with a diverse team and strong local PMET representation will typically score better on these criteria than a newly incorporated entity would. This makes EOR an attractive option for companies whose own workforce composition would score weakly under COMPASS.

Conclusion

COMPASS has fundamentally changed what it means to plan an Employment Pass application in Singapore.

 

Salary and qualifications still matter — but the employer’s workforce profile now carries equal weight in determining the outcome.

 

Companies that understand their C3 and C4 scores before applying are in a much stronger position to anticipate results, address weaknesses, and time applications strategically.

 

For businesses expanding into Singapore without a local entity, EOR services offer a COMPASS-aware path to sponsor EP holders under an established, compliant employer structure.

The 2027 salary threshold increases are also on the horizon, adding further urgency to planning EP applications with a structured strategy.

 

For expert support on COMPASS assessment, Employment Pass applications, and employer of record services in Singapore, visit TY Teoh Advisory.