Can S Pass or Work Permit Holders Become Company Directors or Secretaries in Singapore?

Singapore is globally recognized as one of the easiest countries to set up and operate a business. With a robust economy, strong legal system, and supportive government policies, entrepreneurs from around the world are attracted to establish their companies here. However, when it comes to foreigners working in Singapore under an S Pass or Work Permit, there are strict limits to what they can do beyond their existing employment.

A commonly asked question is whether S Pass or Work Permit holders can legally be registered as company directors or secretaries. The short answer is no, but the reasons behind this restriction are worth understanding in detail.

Understanding Singapore’s Work Pass System

Before examining why these restrictions exist, it helps to understand the structure of Singapore’s employment passes and what each allows.

1. Employment Pass (EP)

The Employment Pass (EP) is typically granted to foreign professionals, executives, and specialists. EP holders work in managerial or skilled positions and earn a minimum qualifying salary.

An EP holder can, in certain situations, be appointed as a company director — especially if they have approval from the Ministry of Manpower (MOM) and the company sponsors their pass. They are also eligible to start a company if they transition to an EntrePass or if MOM grants a Letter of Consent (LOC) for such involvement.

2. S Pass

The S Pass is for mid-skilled foreign employees such as technicians and supervisors. S Pass holders are tied to their employers and are subject to quota and levy regulations. They cannot engage in any other business activity or take up additional employment besides the job stated in their pass.

3. Work Permit

The Work Permit is issued to low-skilled or semi-skilled foreign workers in industries such as construction, manufacturing, and services. Work Permit holders face the most restrictions — their employment is fully controlled by the sponsoring company and they cannot run, manage, or even participate in another business in Singapore.

This framework helps ensure that the foreign workforce remains regulated and that employment opportunities for locals are protected.

Can S Pass or Work Permit Holders Be Appointed as Directors?

In Singapore, the Companies Act requires that every company have at least one director who is ordinarily resident in Singapore. This person must be a Singapore citizen, Singapore Permanent Resident (PR), or a foreigner holding an appropriate employment pass that allows directorship — such as an EP with a valid Letter of Consent.

Unfortunately, S Pass and Work Permit holders do not qualify under these rules.

Why They Cannot Be Directors

1. Restrictions under MOM RegulationsBoth S Pass and Work Permit holders are issued their passes under the condition that they work only for their approved employer. They are not permitted to manage or operate another business. Acting as a company director would amount to engaging in unauthorized employment, which is a clear violation of MOM’s rules.

2. Violation of Employment TermsTaking up a directorship means assuming management responsibilities and making executive decisions for a company — activities that are considered work. This would breach the conditions of their existing work pass.

3. Legal Consequences for Non-ComplianceIf caught, the consequences can be severe. MOM can cancel the work pass, impose fines, or even deport the individual. The company involved may also face penalties for abetting the breach of employment laws.

Practical Example

Suppose an S Pass holder employed by a logistics company wants to start a side business and list themselves as the director. This would not be allowed. They cannot incorporate a company under their name, nor can they manage one, even if the business operates in a completely different field. Only after obtaining a valid EntrePass or Employment Pass tied to their own company can they legally act as a director.

Can S Pass or Work Permit Holders Be Company Secretaries?

The role of a company secretary in Singapore carries legal and administrative responsibilities. Every private limited company is required by ACRA to appoint a qualified company secretary within six months of incorporation.

To qualify, the company secretary must:

• Be a natural person (not a company), and

• Be ordinarily resident in Singapore, meaning a citizen, PR, or a valid Employment Pass holder with permission to act in this role.

Since S Pass and Work Permit holders are not considered ordinarily resident for ACRA purposes and cannot take up secondary employment, they cannot serve as company secretaries.

The company secretary is responsible for ensuring compliance with corporate governance, preparing resolutions, and filing statutory documents — duties that require legal authority and independence. Allowing someone on a restricted pass to occupy this position would be contrary to both MOM and ACRA rules.

What About Shareholding? Can They Own a Company?

While S Pass and Work Permit holders cannot be directors or secretaries, there is a small distinction when it comes to ownership.

They are technically allowed to hold shares in a company, but only as passive investors. This means:

• They can own part of the company as shareholders.

• They cannot be involved in decision-making or daily operations.

• They cannot receive any salary, director’s fees, or remuneration from that company.

However, even passive shareholding can raise red flags if it appears the individual is attempting to control or manage the company indirectly. MOM treats any form of active business participation as a breach of work pass conditions.

So while ownership is legally possible, it’s generally not recommended unless the foreigner’s role is purely financial and all management duties are handled by others.

Legal Pathways for Foreign Workers Who Want to Start a Business

Many S Pass and Work Permit holders are motivated, skilled, and interested in entrepreneurship. Fortunately, there are legal alternatives available if they wish to become business owners or directors in Singapore.

1. Apply for an EntrePass

The EntrePass is designed for foreign entrepreneurs who want to start and operate innovative businesses in Singapore. Applicants must show that their business idea is viable, innovative, and has growth potential.

Once approved:

• The EntrePass holder can incorporate a company and act as its director.

• They can hire local and foreign staff.

• They can fully participate in the company’s management and daily operations.

The EntrePass is suitable for startup founders, tech entrepreneurs, and those involved in venture-backed or R&D-driven projects.

2. Apply for an Employment Pass (EP) Through Their Own Company

Another route is to register the company first, appoint a local nominee director, and then apply for an Employment Pass (EP) under that newly formed company. Once the EP is approved, the individual can take over as director.

This is one of the most common and practical ways for foreign professionals to start a business legally while complying with MOM and ACRA regulations.

3. Appoint a Nominee Director

For foreigners who wish to own a Singapore company but cannot fulfill the “resident director” requirement, engaging a nominee director service is a lawful option.

A nominee director is a Singaporean or PR appointed to meet ACRA’s requirement while the foreign shareholder manages the company from abroad or transitions to a suitable pass later.

However, this arrangement must be transparent and backed by proper legal agreements to ensure compliance and avoid misuse.

Penalties for Non-Compliance

Singapore takes employment and business laws seriously. Breaching MOM’s conditions or ACRA’s rules can lead to heavy penalties.

For Individuals:

• Immediate revocation of their S Pass or Work Permit

• Deportation and blacklisting

• Possible fines and imprisonment for serious cases

For Companies:

• Fines of up to S$20,000 per offence

• Disqualification of directors

• Suspension of business licenses or deregistration by ACRA

Even if a company attempts to “mask” an S Pass holder’s involvement by using proxies or informal management roles, MOM investigations can uncover such activities through payroll records and operational links.

Common Misconceptions

Many foreign workers misunderstand the boundaries of their work pass. Here are a few myths clarified:

1. “I can start a small side business because it’s not related to my job.”→ False. Any commercial activity or management role outside your approved employment is a violation of MOM regulations.

2. “I can be a director if I’m not taking any salary.”→ False. Directorship is defined by responsibility, not payment. Even unpaid management counts as work.

3. “I can use a local friend’s name to register the company but manage it myself.”→ Risky and illegal. MOM treats hidden or proxy arrangements as breaches of the law, and both parties can be penalized.

Summary Table of What Is and Isn’t Allowed

Role / Activity	S Pass Holder	Work Permit Holder	Legal Alternatives
Company Director	❌ Not allowed	❌ Not allowed	EntrePass / EP with LOC
Company Secretary	❌ Not allowed	❌ Not allowed	Local citizen or PR
Shareholder	✅ Passive only	✅ Passive only	No management involvement
Start a Business	❌ Not allowed	❌ Not allowed	Apply for EntrePass or EP
Manage Operations	❌ Not allowed	❌ Not allowed	After pass conversion

The Logic Behind These Restrictions

Singapore’s strict framework ensures that the foreign workforce remains regulated and that business ownership is transparent. Allowing S Pass or Work Permit holders to freely start or manage businesses could lead to:

• Unfair competition with local entrepreneurs,

• Labour exploitation, and

• Circumvention of work pass quotas.

By maintaining clear boundaries between work passes and business privileges, Singapore preserves both economic integrity and workplace fairness.

Final Thoughts

To sum up, S Pass and Work Permit holders cannot be registered as company directors or company secretaries in Singapore. Their work passes restrict them to employment with their sponsoring company, and they are not allowed to manage, run, or participate in other businesses.

However, if they aspire to become entrepreneurs, there are legitimate routes to do so — such as applying for an EntrePass or Employment Pass through their own company. These options allow them to participate legally in Singapore’s vibrant business ecosystem while remaining fully compliant with MOM and ACRA guidelines.

In short, while the rules may seem strict, they serve to protect both the foreign worker and the integrity of Singapore’s corporate environment. With proper planning, compliance, and the right pass, any determined individual can still turn their business dreams into reality in Singapore.