Comprehensive Guide to Recruitment and Employment in Singapore

I. National and Economic Background: Global Business Hub

Singapore is a city-state in Southeast Asia, with a total area of only 733.1 square kilometers, and is one of the world’s most important financial, trade, and shipping centers. Its population is approximately 6.04 million, a multicultural society with English, Mandarin, Malay, and Tamil as official languages. English is the common business language, making communication highly convenient.

Singapore’s economy is highly developed, with a GDP of approximately 501.4 billion USD in 2025. The World Bank ranks it as the 2nd easiest place to do business globally. Its core competitiveness lies in:

• Strategic location: Situated at the choke point of the Strait of Malacca, it is a natural hub connecting East and West, with a 6-hour flight radius covering major Southeast Asian markets.
• Open and stable policies: The government offers numerous tax incentives and measures to attract foreign investment, with a highly stable political and legal environment and strict intellectual property protection.
• Top-tier infrastructure and talent: Possesses world-class ports, airports, and communication networks. An advanced education system, high-quality workforce, and high degree of internationalization.

For Chinese enterprises, Singapore is an ideal gateway to the Southeast Asian market and a regional headquarters location.

II. Core Advantages and Challenges for Companies Expanding to Singapore

(I) Advantages:

• Extreme convenience: Company registration is simple and efficient, usually completed within a few days.
• Favorable tax system: Corporate income tax rate is a maximum of 17%, with numerous tax exemptions and reductions for new companies, headquarters economy, finance, high-tech, and other sectors.
• Financial and talent hub: Has a mature capital market and a global banking system, facilitating corporate financing. A multicultural background attracts top global talent.
• Rule of law and integrity: A sound and efficient legal system, strong enforcement of contracts, and intellectual property protection.

(II) Challenges:

• High operating costs: One of the most expensive cities in the world to live in, with extremely high office rents and labor costs.
• Intense market competition: Companies from various countries establish bases here, leading to fierce talent competition.
• Strict compliance requirements: Especially for foreign employees, work visa policies are complex and increasingly stringent, posing significant compliance responsibilities for employers.
• Complex tax filing: Although tax rates are competitive, tax calculation, reporting, and compliance requirements are extremely strict.

III. Employment Compliance Details: Costs and Obligations

When employing staff in Singapore, the core mandatory cost is the Central Provident Fund (CPF), a social security savings scheme for Singapore citizens and permanent residents.

1. Mandatory Employer Contributions (additional labor costs):

• Central Provident Fund (CPF): Contribution rates are progressive based on employee age and salary level. For the most common case of employees under 55:
  • Employer contribution: 17%
  • Employee contribution: 20%
  • Total: 37% (deposited into the employee’s personal account for retirement, medical care, housing).
  • Note: Foreign employees are not required to contribute to CPF.
• Skills Development Levy (SDL): All employers must contribute to support workforce training.
  • Monthly salary ≥ S$800: Rate is 0.25% of employee’s monthly salary (maximum S$11.5).
  • Monthly salary < S$800: Fixed contribution of S$2.

2. Mandatory Employee Deductions:

• CPF: As mentioned above, up to 20%.
• Personal Income Tax: 0% - 24% progressive tax system (see below for details). Income tax is self-declared and paid by the employee; employers do not withhold it from wages.

3. Employment Contracts and Working Hour Regulations:

• Contracts: Although oral contracts are allowed, written contracts are strongly recommended, clearly stating position, salary, working hours, benefits, and termination clauses.
• Working Hours: Standard is 44 hours per week (typically 8-9 hours per day).
• Overtime Pay: Employees earning not more than S$2600 (manual workers) or S$4500 (non-manual workers) are protected by the Employment Act, with overtime pay at 1.5 times the hourly rate. Monthly overtime hours must not exceed 72 hours.

4. Dismissal and Notice Period:

• Notice Period: Typically ranges from 1 day to 4 weeks, depending on years of service. Both parties can also agree to pay “salary in lieu of notice” to replace the notice period.
• Severance Pay: Usually referred to as retrenchment benefits, employees dismissed not due to misconduct and with at least 2 years of service are entitled to it. The standard is typically 2 weeks to 1 month’s salary for each year of service.

IV. Work Visas: The Key to Entry for Foreign Employees

Singapore implements strict quotas and qualification restrictions for foreign labor, managed by the Ministry of Manpower (MOM). Common work visas are as follows:

• Employment Pass (EP):

  • Target: Senior managers, executives, professionals.
  • 2025 Salary Threshold: Monthly salary ≥ S$5,600 (≥ S$6,200 for financial sector).
  • Features: No fixed quota, but requires passing MOM’s Complementarity Assessment Framework (COMPASS) points system, assessing factors such as salary, education, and company workforce diversity.
  • Validity: Typically 2 years, renewable.

• S Pass (SP):

  • Target: Mid-skilled technical talent.
  • 2025 Salary Threshold: Monthly salary ≥ S$3,150 (≥ S$3,650 for financial sector).
  • Features: Subject to industry quotas (e.g., maximum 10% for service sector), employers must pay a monthly foreign worker levy of S$330-950.
  • Validity: Typically 2 years, renewable.

• Overseas Networks & Expertise Pass (ONE Pass):

  • Target: Top talent in various fields.
  • Salary Threshold: Fixed monthly salary ≥ S$30,000 in the past year.
  • Features: Valid for 5 years, allows working across multiple platforms, provides work eligibility for spouses.

Core Challenge: Visa application process is complex, taking weeks to months, and competition for quotas is fierce. Employers must prove that suitable local talent cannot be found to fill the position.

V. Compensation and Benefits Overview

• Minimum Wage: No national regulation, but specific industries like cleaning and security have industry minimum wages.
• Payroll Frequency: Typically monthly, wages must be paid by the 7th of each month for the previous month.
• Bonuses:
  • 13th-month salary (AWS): Not mandatory, but a common market practice.
  • Year-end bonus/performance bonus: Determined by company policy, usually linked to individual and company performance.

VI. Leave System

• Annual Leave: At least 7 days after 3 months of service, increasing to a maximum of 14 days with seniority.
• Sick Leave:
  • Outpatient: Maximum 14 days of paid sick leave per year.
  • Hospitalization: Maximum 60 days of paid sick leave per year.
• Maternity Leave: 16 weeks of paid maternity leave (for Singapore citizen children). The government provides high subsidies, with limited actual employer burden.
• Paternity Leave: 4 weeks of government-paid leave.
• Childcare Leave: 6 days of paid leave per year (for Singapore citizen children).
• Public Holidays: 11 statutory paid holidays per year.

Summary: Singapore, with its excellent business environment, strategic location, and talent advantages, is a top choice for companies’ global expansion. However, its high costs, complex work visa system, and strict compliance requirements pose significant barriers. For most companies seeking agile overseas expansion, partnering with a professional Employer of Record (EOR) is the optimal strategy to mitigate risks and achieve efficient, compliant expansion, allowing you to focus on your business rather than complex administrative and legal matters.