Doing business in Singapore with a Singapore PEO / Employer of Record
Singapore has long stood out as an extraordinary destination for foreign investment in Asia. With its welcoming regulatory and tax environment and its extensive networks of international businesses, there is no wonder that Singapore is home to many of the world’s largest companies or their Asian regional headquarters.
With exceptional standards of education and professional training, Singapore has a talented workforce with global exposure and experience. Any investors looking to start a business in Singapore or test the markets would do well in partnering with a reputable professional employer organization (PEO) or employer of record (EOR) in the country. PEOs/EORs in Singapore are able to handle all administrative and legal aspects of having a workforce in Singapore, from contract creation through to renewal or dismissal.
Read on to discover the benefits of using a PEO / Employer of Record in Singapore and to get rankings of the top Singapore PEO providers.
Why Use a PEO/EOR in Singapore?
Businesses in Singapore are able to benefit from the highly international flavor of the city, but there nonetheless remain some complex legal and regulatory frameworks to navigate when expanding into Singapore.
Most companies would ordinarily have to establish an entity in Singapore, then ensure that reliable legal advice was sought to hire employees and manage all of their varying payroll, tax, retirement, and social security contributions. This is a difficult task in any country, let alone in a foreign one, and for that reason, many companies find partnering with a PEO/EOR in Singapore to be the solution.
PEOs/EORs handle all these aspects of foreign employment in a compliant and efficient manner, as well as reducing risk.
How to Hire in Singapore
In order to successfully hire in Singapore, you must include the necessary measures of assembling a strong, written employment contract that specifies the details of the employee’s compensation, benefits, and termination requirements. The offer letter, as well as the employment contract for employees working in Singapore, should state the salary along with any additional compensation in Singapore Dollars.
Singapore offers all of its residents a basic health insurance plan, which includes foreign workers working full-time in the country. However, while it is not required to provide this benefit to local employees, some employers do offer supplemental insurance as a benefit.
The process of recruiting talented workers can be competitive in Singapore. Because of the fast-growing job market, local candidates will usually have multiple employment opportunities to choose from. Also, it is common for many skilled professionals to already be employed in their field, which means they are not actively searching for new open positions. This dynamic has led to some companies choosing to work with headhunters or recruitment agencies to recruit top talent. However, it is important to keep in mind that working with traditional headhunters can be an expensive option.
Finding quality candidates who are available and actively searching for new opportunities in Singapore can prove to be challenging if you are trying to recruit from your office in your home country. This is where your company can likely benefit from working with a Singapore PEO that already possesses in-country connections.
In order to successfully hire in Singapore, it can also be helpful to work with a recruitment agency to simplify and expedite the process of hiring talented professionals in the country. On occasion, global PEO organizations will have an in-house recruitment agency that will significantly aid the process of recruiting in Singapore. The benefits of using a recruitment agency to improve your overall hiring process include:
Having the ability to tap into the resources and knowledge provided by local recruitment experts who are familiar with the Singaporean market and the best hiring practices.
Partnering with an organization that is designed to understand the specific goals of your business and that can create a recruitment search process that is designed to fulfill your exact needs.
Being able to take advantage of the recruitment agency’s local legal expertise to ensure that your business is compliant with the local laws and regulations in regards to employment.
Additionally, when you partner with a Singapore PEO that also offers recruitment coverage, you receive the benefit of having ongoing support that includes the hiring and onboarding processes in addition to the initial recruitment phase.
Below we have listed our recommendations for the 3 Best Singapore PEOs and Employers of Record. These companies all are well-respected in the industry and have outstanding reputations for being able to hire talented professionals in Singapore as well as ensure compliance with local employment regulations.
Best Singapore PEOs & Employer of Record
New Horizons Global Partners
With offices throughout Asia, New Horizons Global Partners is a stand out PEO/EOR in Singapore as well as elsewhere on the Asian continent. Unlike many other PEOs/EORs, it places high importance on having local consultants who truly understand the employment and business landscapes in which companies operate.
In doing so, it is able to guide executives through the often complex processes involved in setting up a business in Singapore, as well as assisting any foreign staff to understand the business culture and etiquette.
Global PEO has continued to develop their organization in recent years and consistently provides superb global expansion guidance to businesses worldwide. The group is based in Hong Kong, but their knowledge base in other countries is localized and up-to-date with the modern working culture. The company’s cost-effective nature is a strong selling point for businesses expanding into Singapore, and offers pricing rates that are competitive compared to industry norms. In addition to recruitment and hiring services, they’re also set up to take on a variety of duties based around entity setup, staffing, payroll, and a variety of administrative functions.
SkyExecutive is a well-respected recruitment agency and Professional Employer Organization (PEO) with local operations in Singapore. This means that Sky Executive has the ability to combine their recruitment services with their day-to-day PEO employment solutions to provide a unique set of PEO benefits for companies looking to expand overseas and provide a single point of contact for these businesses. SkyExecutive places high value on its network of local consultants based in Singapore, with that level of local expertise being helpful for companies looking for a smooth transition into a new business environment.
Request a Proposal
If you would like to expand your business operations into Singapore, GlobalizationPedia can connect you with a PEO that best fits your needs at the most cost-effective price. Fill out the form today and we’ll tap into our extensive database of partnerships to give you a full rundown with the best potential PEO matches for your company.
Below are a few of the reasons why it may make sense for your business to partner with one of our recommended Singapore PEOs / Employers of Record.
- You are working with an independent contractor overseas and you are looking to convert them to an internal employee in Singapore. In this situation, using a Singapore PEO and employer of record can simplify the process of transitioning the employee into your own network, as opposed to doing it on your own by establishing your own legal subsidiary.
- Your business is in a position where your relationship with a contractor that is not compliant with local laws and regulations.
- The level of risk and financial strain that come with maintaining a foreign entity from a compliance perspective is becoming too high to justify the potential benefits that your business could see from the endeavor in the long term.
Additional information on the process of hiring in Singapore
The standard working week in Singapore is limited to 8 hours per day and cannot exceed 44 hours in a week. Overtime may be paid at 150% of the regularly employee payment depending on the employee’s workman status and if their salary rests below the relevant wage cap.
There are no required employee or employer tax contributions required on a monthly basis in Singapore. Individual tax must be submitted by no later than March 30th each year and report the employee’s income from the previous calendar year.
Employees are typically entitled to sick leave if they have worked for an organization for three months or more. All sick leave must be certified by either the organization’s doctor, a government-doctor, or an alternative approved doctor.
The exact amount of paid sick leave is dependent on how many years the employee has been with the employer. For employees that have been employed more than six months, they are eligible for 14 days of outpatient, non-hospitalization leave. Additionally, these employees are entitled to 60 days of hospitalization leave, which includes 14 day’s outpatient leave.
Singapore’s national healthcare system provides insurance to everyone who is either a resident or has a working visa in Singapore. Companies employing foreign workers have the option to provide their employees with supplementary health insurance. Stock options are frequently desired by executives and high level managers working for US based companies and are relocated to work in Singapore.
Termination and Severance
In Singapore, a probation period of between three and six months is often agreed upon in an employment contract. There is generally a shorter notice period required, although it is not a statutory requirement.
In situations where there is no notice period specified in the employment contract, there is a standard notice period that applies. Managing terminations for employee and handling severance packages can be complicated for companies expanding overseas for the first time. Partnering with a Singapore PEO can mitigate risk for foreign companies and provide guidance through this process.
Singapore Social charges
Singapore’s Central Provident Fund (CPF) is a key function of the country’s social security system. The CPF gives employees a social security savings plan that also administers other types of benefits, including healthcare and retirement.
Much like retirement plans in the United States, employers and employees both make monthly contributions to this social security fund. These contributions are distributed into one of the three accounts:
This account is able to be used to purchase a home, make financial investments, pay for education expenses, and cover their CPF insurance.
The “special account” provides funds for Singaporean workers who are nearing retirement and may need funds to cover expenses during retirement itself.
The Medisave account can be used for any approved medical expenses, including hospitalizations, doctor visits, and medical insurance.
The maximum CPF contribution rate is 17% for employers and 20% for employees. There is no required CPF contribution for foreign employees who have an employment pass or work permit in Singapore.
Contact us today if you would like to learn more about the process of connecting with the right Singapore PEO for your business.