Can S Pass or Work Permit Holders Be Registered as Company Directors or Secretaries in Singapore?

Singapore is known for being one of the easiest places in the world to start and run a business. With a transparent regulatory framework and strong investor protection laws, it’s no surprise that both locals and foreigners are drawn to setting up companies here. However, when it comes to S Pass and Work Permit holders, the rules for holding positions such as company director or company secretary are different — and it’s important to understand these distinctions to stay compliant with the Ministry of Manpower (MOM) and Accounting and Corporate Regulatory Authority (ACRA).

This article explores in detail whether S Pass and Work Permit holders can be directors or secretaries of a company, what the legal restrictions are, and what viable alternatives exist.

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Understanding the Difference Between Pass Types

Before diving into the main topic, it’s useful to understand the various employment pass types in Singapore and how they differ in terms of privileges and restrictions.

1. Employment Pass (EP)

• Issued to professionals, managers, and executives.

• Holders can generally be appointed as company directors with approval from MOM, especially if they plan to manage their own company.

• EP holders enjoy more flexibility compared to S Pass and Work Permit holders.

2. S Pass

• Designed for mid-skilled foreign employees such as technicians or supervisors.

• The employer must meet quota and levy requirements under MOM’s foreign manpower policy.

• Holders face restrictions on business involvement and are not allowed to engage in other employment or business activities apart from the sponsoring employer.

3. Work Permit

• Typically issued to low-skilled or semi-skilled workers in construction, manufacturing, services, or domestic work sectors.

• Subject to strict employment conditions.

• Work Permit holders cannot start or manage a business in Singapore under any circumstances.

Understanding this hierarchy helps clarify why S Pass and Work Permit holders face restrictions when it comes to business ownership or corporate positions.

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Can S Pass or Work Permit Holders Be Company Directors?

The short answer is no, S Pass and Work Permit holders cannot legally be appointed as company directors in Singapore.

1. MOM’s Restriction on Secondary Employment

Both S Pass and Work Permit holders are tied to a specific employer under their work pass. Their primary responsibility is to work only for the sponsoring company. MOM explicitly prohibits them from:

• Running or managing a business,

• Engaging in freelance work or side hustles,

• Becoming a director of another company, or

• Undertaking any employment outside of their approved job scope.

Doing so constitutes a breach of the Employment of Foreign Manpower Act, which can result in revocation of their pass, deportation, and blacklisting from future employment in Singapore.

2. ACRA’s Director Requirements

According to ACRA, every company must have at least one ordinarily resident director in Singapore. An “ordinarily resident” individual can be:

• A Singapore citizen,

• A Singapore Permanent Resident (PR),

• An EntrePass holder, or

• An Employment Pass holder who has obtained a Letter of Consent (LOC) from MOM to act as a director.

S Pass and Work Permit holders do not qualify under any of these categories because their passes do not permit them to manage businesses or assume director-level responsibilities. Therefore, even if they wish to be directors, they would be ineligible under current legislation.

3. The Rationale Behind the Restriction

The Singapore government enforces this rule to ensure:

• Foreign workers focus solely on their approved employment.

• The business ecosystem remains fair to local entrepreneurs.

• Employers remain responsible for the conduct and activities of foreign employees under their sponsorship.

Allowing lower-tier pass holders to engage in business management would undermine these controls and potentially lead to illegal employment or unregulated business activity.

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Can S Pass or Work Permit Holders Be Company Secretaries?

The company secretary plays a crucial role in maintaining compliance with Singapore’s corporate laws, filing annual returns, and ensuring good governance. Under the Companies Act, every private limited company must appoint at least one company secretary who is:

• A natural person (not a company), and

• Ordinarily resident in Singapore.

1. Residency Requirement

Since S Pass and Work Permit holders are not considered “ordinarily resident” for ACRA purposes, they cannot serve as company secretaries. This position is typically filled by:

• A Singapore citizen,

• A Singapore PR,

• Or a professional corporate secretarial firm authorized to act in that capacity.

2. Compliance and Liability

The company secretary shares part of the legal responsibility for ensuring the company adheres to statutory obligations. Since S Pass and Work Permit holders are not legally allowed to engage in such administrative or fiduciary roles, ACRA would reject their appointment if submitted during incorporation or later through a change of officers.

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Can S Pass or Work Permit Holders Own a Business?

This is an important distinction: while they cannot be directors or secretaries, ownership can, under limited circumstances, be considered separately — but even this is heavily restricted.

1. Passive Shareholding vs. Active Management

S Pass and Work Permit holders may hold shares passively in a Singapore company, but they cannot take part in its management or daily operations.

This means:

• They can invest in a company as shareholders.

• They cannot be listed as directors, sign company documents, or perform managerial duties.

• They must not receive any form of salary or direct compensation from the company unless they have an approved pass for that specific role.

However, this arrangement is rarely practical because:

• Most investors prefer to have managerial control.

• MOM may view such arrangements as attempts to bypass regulations.

• It complicates immigration and tax compliance for both the individual and the company.

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How Can a Foreign Worker Start a Business in Singapore Legally?

Although S Pass and Work Permit holders face limitations, there are legal pathways to start or run a business in Singapore by changing their status or using proper corporate structures.

1. Applying for an EntrePass

The EntrePass is specifically designed for foreign entrepreneurs who wish to start and operate a business in Singapore. It is open to individuals with:

• Innovative business ideas,

• Venture-backed startups, or

• Proprietary technology.

Once approved, an EntrePass holder can:

• Incorporate a Singapore company,

• Act as its director,

• Manage daily operations, and

• Hire local or foreign employees under their company.

However, EntrePass approval is competitive and subject to criteria such as business innovation, funding, and scalability.

2. Becoming a Shareholder and Hiring a Nominee Director

Another legitimate route is for an S Pass or Work Permit holder to:

• Be a shareholder in the company,

• Appoint a Singapore citizen or PR as the local director,

• Avoid direct management responsibilities until they change their pass type.

This allows them to maintain an ownership interest while remaining compliant with MOM rules.

3. Transitioning to an Employment Pass (EP)

If the foreign worker’s goal is to take an active role in managing their company, they can apply for an Employment Pass (EP) through the newly registered business. Once granted:

• They can become the company’s director.

• They can manage daily operations legally.

• They can apply for a Letter of Consent (LOC) if required.

Many successful entrepreneurs in Singapore follow this route — starting a company with a nominee director, applying for an EP under that company, and then taking over directorship once approved.

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Penalties for Non-Compliance

S Pass or Work Permit holders who attempt to bypass these restrictions face serious consequences, including:

• Cancellation of their work passes by MOM,

• Deportation and potential ban from re-entry into Singapore,

• Company fines and sanctions for illegal employment practices, and

• ACRA penalties for false declarations or improper filings.

Similarly, local partners or employers who assist in these arrangements can face legal repercussions for abetting illegal business activity.

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Practical Scenarios

Here are a few examples to clarify common misunderstandings:

1. A Work Permit holder in the F&B sector wants to open a restaurant.
   → They cannot register the company or be listed as a director. They must instead find a local partner or later apply for an EntrePass or EP to manage the business.

2. An S Pass holder working as a technician wants to invest in a logistics company.
   → They can hold shares as a passive investor but cannot be involved in day-to-day management.

3. An S Pass holder tries to act as a company secretary for a friend’s business.
   → This is illegal and can lead to the revocation of their pass.

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Summary Table

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Conclusion

In Singapore, S Pass and Work Permit holders cannot be registered as company directors or secretaries due to strict regulations under MOM and ACRA. These roles involve managerial, fiduciary, and compliance responsibilities that go beyond the scope of their employment conditions.

However, there are legitimate options available:

• Applying for an EntrePass to start a business,

• Transitioning to an Employment Pass and taking over directorship after approval, or

• Investing as a passive shareholder while appointing a local director.

By following the proper procedures and respecting MOM’s guidelines, foreign workers can transition smoothly from employment to entrepreneurship without violating Singapore’s laws.