Singapore Implements New Scheme to Help Businesses Hire Foreign Workers
Singapore’s Manpower for Strategic Economic Priorities (M-SEP) scheme enables eligible companies to hire foreign S Pass and Work Permit holders above the permitted prevailing quotas.
There are two conditions that companies must meet to qualify; participate in at least one key economic program provided by the government and commit to hiring or training Singaporeans.
Singapore launched the Manpower for Strategic Economic Priorities (M-SEP) scheme in late December 2022, which enables qualifying companies to hire foreign workers (S Pass and Work Permit holders) above the permitted prevailing quotas.
This flexibility will last for two years upon the company enrolling in the scheme.
The work permit is issued only for semi-skilled foreign workers in the construction, manufacturing, marine shipyard, process, and services sector. The S Pass, however, is issued for skilled foreign employees who must be paid a minimum of S$3,000 (US$2,267) per month. This increases progressively from age 23, with the employee eligible to receive up to S$4,500 (US$3,401) per month at age 45 and above. S Pass holders in the financial sector are paid a minimum of S$3,500 (US$2,645) per month, which also increases progressively with age.
How M-SEP works
The M-SEP scheme allows eligible businesses to obtain additional S Pass and work permit holders by up to five percent of their basic headcount. This is subject to a cap of 50 workers per company.As such, if a company’s total headcount is 80 employees (including S Pass and work permit holders), then the company can apply for flexibility to hire up to four foreign workers. This can be a mix of S Pass and work permit holders.
What are the requirements to qualify for the M-SEP scheme?
There are two conditions that companies must comply with to qualify for the M-SEP scheme. These are:
- Support for strategic economic priorities; and
- Commitment to hiring or training locals.
Support for strategic economic priorities
Under this condition, firms must participate in at least one of the initiatives by Singaporean economic agencies.
Supporting agency: Economic Development Board
- Recipients of Development and Expansion Incentive (DEI), including the International Headquarters DEI;
- Participants of the Research and Innovation Scheme for companies (RIS(C));
- Manufacturers that have significant activities in Singapore (hire at least 500 locals); or
- Recipients of the Pioneer Certificate Incentive.
Supporting agency: Enterprise Singapore
- Participants of the Global Trader Program (GTP);
- Participants of the Singapore Global Executive Program (SGEP);
- Participants of Scale-Up SG; or
- High-growth startups incorporated in Singapore;
- Must have at least US$10 million in investment over the last 36 months; and
- Have received funding from SEEDS Capital, EDBI, or other investment firms recognized by the government.
Supporting agency: The Singapore Tourism Board
- Selected Singapore Tourism Board Accelerator participants with innovative projects; or
- Selected Business Improvement Fund (BIF) grantees with innovative projects.
Supporting agency: Maritime and Port Authority of Singapore
- Maritime Leasing (ML) Award recipients;
- Recipients of the Shipping-related Support Services (MSI-SSS) Award; or
- Selected International Shipping Enterprise (MSI-AIS) Award recipients.
Supporting agency: Infocomm Media Development Authority
- SG:D Spark participants; or
- Accreditation@SG Digital recipients; or
Commitment to hiring or training locals
A qualifying company can receive 1 M-SEP for every net hire, subject to the five percent of the company’s workforce headcount, and the cap of 50 quota.Further, an eligible company will receive 1 M-SEP for every worker the company commits to training. This is also subject to the five percent of the company’s workforce headcount, and the cap of 50 quota. Firms must maintain the share of their local workforce and meet the above commitments by the end of the M-SEP support period. Those that fail to meet the conditions will not be eligible for M-SEP renewal.
What is the current quota restriction for S Pass holders
Under the existing quota, the number of S Pass holders a Singaporean company can hire is capped at 10 percent of the company’s total workforce in the services sector, and 15 percent in the construction, manufacturing, marine shipyard, and process sectors.
What is the current quota restriction for work permit holders?
The foreign worker quota for work permit holders differs depending on the industry.
Qualifying companies can hire seven work permit holders for every local employee who earns a minimum of S$1,400 (US$1,060) per month.
Eligible companies in the processing sector can also hire seven work permit holders for every local employee who earns a minimum of S$1,400 (US$1,060) per month.
Manufacturing firms can hire 1.5 work permit holders for every local employee who earns a minimum of S$1,400 (US$1,060) per month.
Eligible companies in this industry can hire 1.5 work permit holders for every local employee who earns a minimum of S$1,400 (US$1,060) per month.
For the services sector, qualifying companies can hire work permit holders that comprise up to 35 percent of the total workforce. Local employees that comprise the total workforce must earn a minimum of S$1,400 (US$1,060) per month.
As of September 1, 2022, firms that employ foreign workers must pay their full-time local employees a minimum of S$1,400 (US$1,060) per month.
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