Singapore Immigration Challenges: What Contractors Need to Know

Like many developed nations, Singapore is tightening its immigration standards, especially for foreign nationals that want to work as employees inside the country.  This affects all foreign workers who may be attracted to seek clients and projects in the country with its strong economy and high pay scales.  Some of those effects are positive and some are negative, but what is certain is that the landscape for workers of all types is changing in Singapore, but may be of benefit for independent contractors.

If you are a contractor planning to work or live in Singapore there are a few things to keep in mind:

Immigration Restrictions for Foreign Employees

The first major trend in the actions of the government is to limit the hiring of foreign employees by Singapore businesses.  This not only impacts potential workers but also businesses in Singapore that have relied on foreign talent.  “With the (link is external)Ministry of Manpower(link is external)(MOM) continuing its push to restrict foreign employment in Singapore, employers will still find it difficult to take in staff for both low and high paying roles from overseas in the coming year.”
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Behind this movement to restrict foreign employees is the fear that Singapore’s local labour force is being deprived of opportunities.  These new laws are having the effect of increasing the attraction of hiring contractors, who so far are not subject to the same immigration controls, and in many cases are less expensive than hiring a full-time employee.

Increasing Popularity of Contract Workers in Singapore

Singapore businesses still need talented foreign workers with their specialized skill sets.  One way that is gaining in popularity for employers to avoid the immigration restrictions placed on foreign employees, is to hire contract workers.  This should be good news for the aspiring contractor wishing to work in Singapore, as long as they follow the regulations and standards for independent contractors and freelancers.

 “In Singapore, this global trend of increasing contingent workforces was recently observed in the 2015 Hays Asia Salary Guide. The report pointed to a year-on-year increase in the number of employers reporting to use of contract or temporary staff, on a regular and ongoing basis, from 24 to 26 per cent. For special project work, this percentage was much higher, at 43 per cent. The survey also showed that one in five employers planned to increase their usage of temporary or contract workers in 2016.”   (link is external)

Naturally, this increase in the use of contractors carries risks as well for businesses, especially if they structure the work as they would for an employee.  For contractors, the best practice in Singapore is to operate as an independent business, invoice clients and maintain control over your work process.

Singapore continues to be a rich area for discovering new clients and projects, and the limits placed on formal employees could be a boon for contractors.  If you have questions about work permits for contractors and visa types or need help with invoicing and payment, please contact us at ContractorTaxation.