Singapore bans Employer of Record visa sponsorship

The Ministry of Manpower (MOM) has banned non-Singaporean entities from using Employer of Record (EOR) services to sponsor work visas. This closed a common loophole for foreign businesses without a local presence. Foreign companies must now use the traditional alternatives of setting up a company or representative office in Singapore or hiring foreign workers who qualify for special types of work visas such as the Overseas Networks & Expertise Pass.

EOR services have been a popular option for international businesses seeking to hire employees in foreign countries without establishing a local entity. In Singapore, EORs historically acted as legal employers, and sponsored work passes for foreign employees. The EOR managed compliance while the foreign entity retained operational control of employees without setting up a local presence. With this ban, EORs can now only hire local employees, and foreign workers must be directly employed by a Singapore-registered company.

MOM´s position

MOM’s position is that work passes are intended for foreigners working for companies with a local presence in Singapore, such as subsidiaries, representative offices, or other registered entities. Non-Singaporean companies using EORs to sponsor work passes must transition to alternative solutions to retain foreign employees. These options include incorporating a company or setting up a representative office.

Note that the MOM’s clarification applies only to the use of EOR services for hiring foreign workers. MOM remains silent on using EOR services for employing Singaporean citizens or permanent residents.