Do Singapore Self-Employed EP Companies Need to Hire Locals?

In 2025, Singapore's self-employed EP policy has undergone significant adjustments in local hiring requirements, with seemingly relaxed regulations actually concealing more sophisticated assessment mechanisms.

1. The Policy Truth: No Mandatory Requirements, But Hidden Thresholds

1. Legal Text Analysis

• No Written Regulations: MOM's official website doesn't require self-employed EP holders to hire local employees
• But COMPASS Scoring System: Local hiring is an important bonus factor (10 points for each citizen/PR hired)

2. 2025 Actual Approval Data

• Zero local employees: Approval rate only 31% (down 9% from 2024)
• 1 part-time local employee: Approval rate jumps to 67%
• 2 full-time local employees: Approval rate 92%

3. Significant Industry Differences

• Tech companies: Can substitute with technology transfer commitments (requires EDB recognition)
• Traditional industries (e.g., F&B): Need 1 local for every 3 foreign employees
• Financial services: Mandatory to hire at least 1 local within first 6 months

2. Alternative Solutions to Not Hiring Locals

1. COMPASS Score Compensation Strategies

• Increase Salary: Monthly salary of S$22,500 can exempt hiring requirements
• Fixed Asset Investment: Purchase ≥S$500,000 office space (+15 points)
• Training Expenditure: Annual S$20,000 training budget (+5 points)

2. Special Channels

• Global Investor Programme (GIP): Investment ≥S$2.5 million can be exempted
• Tech Pass: Applicable for patent holders
• Family Office: Asset management scale ≥S$10 million

3. Transition Period Arrangements

• Newly established companies can defer hiring in first year (requires written commitment for second year)
• Micro enterprises (revenue
• Case study: A blockchain company obtained 2-year buffer period

3. Three Situations Where Hiring Locals is Mandatory

1. During EP Renewal

• No requirement in first year, but need to prove "job creation" during renewal
• 2025 new rule: At least 1 local employee contributing CPF for 6 months

1. When Applying for PR

• ICA will verify local employee ratio
• Best practice: Local employees comprise over 30% of total

1. Specific Industries

• Construction: Foreign worker to local ratio 1:1
• Retail: 1 local for every 2 foreigners

4. 2025 Hiring Strategy and Cost Optimization

1. Flexible Hiring Solutions

• Part-time Model: 20 hours per week meets requirements (monthly salary ≥S$1,300)
• Contract Workers: Project-based hiring (must be minimum 3 months)
• Fresh Graduates: Enjoy government subsidies (up to 30% of salary)

2. Cost Control Techniques

• Shared employees (multiple EP companies jointly hire)
• Outsource to local HR companies
• Utilize WSG Career Centers for subsidized positions

3. Recruitment Channel Recommendations

• MyCareersFuture.sg (government platform, free)
• Polytechnic campus recruitment (40% cost savings)
• Silver workforce re-employment program (generous subsidies)

5. Hidden Benefits of Hiring Locals

1. COMPASS Points

• Base points 10/person
• Hiring disabled persons extra +5 points
• Local graduates additional +3 points

1. Government Subsidies

• Salary subsidies (up to S$1,500 per month)
• Training allowances (70% of course fees)
• Equipment purchase grants (up to S$10,000)

1. Business Facilitation

• Easier access to government contracts
• Preferential bank financing rates
• Priority for industry association membership

6. Common Misconceptions in Practice

1. Fake Employment

• 2025 MOM launched payroll data cross-verification
• Penalty: EP revocation + 3-year application ban

1. Salary Discrimination

• Local employee salary must not be less than 80% of foreign counterparts
• Case study: A company fined S$20,000 for wage disparity

1. False Documentation

• Must retain complete recruitment records (interview notes, etc.)
• Employee resignation must be reported (affects renewal scoring)

7. Advanced Strategy: From Hiring to Integration

1. Cultural Adaptation

• Provide bilingual work environment
• Respect local holidays and customs
• Case study: CNY red packets changed to 13th month salary for better compliance

1. Career Development

• Clear promotion pathways
• Skills upgrading budget (annual ≥S$2,000)

1. Community Connection

• Participate in community enterprise development programs
• Organize employee volunteer activities

Conclusion: Hiring Locals is an Investment, Not Just a Cost

Singapore's 2025 self-employed EP policy is sending a clear signal: the pure "work pass factory" model is no longer viable. True entrepreneurs should view local hiring as a necessary investment in business roots. Those who successfully maintain EP status often see Singaporean employees as cultural bridges and market advisors, not merely compliance costs. In this era where foreign talent and local communities need deeper integration, your hiring strategy actually demonstrates to the government: you're not just a businessperson here to make money, but a builder willing to develop talent for this land. Remember, when your company can demonstrate genuine empowerment of local human resources, rather than mechanically meeting hiring numbers, those seemingly strict requirements will transform into unexpected policy dividends.