Can Using An EOR To Hire Foreigners In Singapore?

Employer of Record (EOR) services are widely used across Asia to help companies hire talent quickly without setting up a local legal entity. In markets like Vietnam, Indonesia, or the Philippines, EOR is often a flexible and compliant solution, even for hiring foreign employees.

However, Singapore is different.

Many companies underestimate how Singapore’s regulatory framework treats EOR arrangements, especially when it comes to hiring foreigners in Singapore. Misunderstanding this can lead to serious compliance risks.

In this article, we’ll explain:

• What an EOR is

• Whether an EOR can be used to hire foreigners in Singapore

• Why EORs cannot sponsor work passes in Singapore

• What EOR is still legally allowed to do

• How Aniday helps companies hire in Singapore compliantly

What Is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of another company.

In an EOR arrangement, the EOR is responsible for:

• Drafting and managing employment contracts

• Running payroll and salary payments

• Handling tax withholding and statutory contributions

• Managing employee benefits

• Ensuring compliance with local labor laws

Meanwhile, the client company continues to manage the employee’s day-to-day work, responsibilities, and performance.

Globally, companies use EOR services to:

• Enter new markets quickly

• Hire talent without setting up a local entity

• Reduce employment and compliance risk

• Test markets before long-term expansion

In many countries, an EOR can also legally sponsor work permits for foreign employees. This is where Singapore stands apart.

Can Using an EOR to Hire Foreigners in Singapore?

Under Singapore’s current regulatory framework, EORs cannot sponsor work passes such as Employment Passes (EP), S Passes, or other work visas for foreigners in Singapore.

EOR services themselves are legal in Singapore, but their use is strictly limited. The restriction comes primarily from immigration and work pass regulations, not from employment law alone.

In 2024, Singapore’s Ministry of Manpower (MOM) formally clarified that:

• EOR providers are not allowed to apply for or sponsor work passes

• Work passes must be tied to a direct employer–employee relationship

As a result, a foreign national who requires an EP cannot be legally hired through an EOR in Singapore.

Why EORs Cannot Sponsor Work Passes in Singapore

To understand why this restriction exists, it’s important to look at Singapore’s legal framework.

Employment of Foreign Manpower Act (EFMA)

The Employment of Foreign Manpower Act (EFMA) governs the employment of foreigners in Singapore. Its core principles are clear:

• A foreigner must hold a valid work pass

• A work pass is issued for a specific employer

• The employer named on the work pass must be the actual employer

Section 12 of the EFMA explicitly ties a work pass to the employer specified on the pass. Because an EOR creates a triangular employment structure (EOR – client company – employee), it does not meet this requirement.

Employment Pass Application Rules

Under the Employment of Foreign Manpower (Work Passes) Regulations:

• Employment Pass applications must be made jointly by

  • The foreign employee

  • The Singapore-based employer (or an authorized representative)

In practice, this means the employer must:

• Have genuine business operations in Singapore

• Be directly responsible for the employee’s work, salary, and compliance

EOR providers do not meet these criteria because the foreign employee performs work for a different business entity. As a result, an EOR in Singapore cannot legally sponsor or hold an Employment Pass.

MOM’s 2024 Clarification

In 2024, MOM issued a formal clarification confirming that:

• EORs are not permitted to sponsor work passes

• Work passes are intended for foreigners working for Singapore-registered companies

• Intermediary or proxy employment arrangements are not acceptable

For companies relying on outdated assumptions, this clarification served as a critical compliance wake-up call.

What Is an EOR Still Allowed to Do in Singapore?

Although EORs cannot be used to hire foreigners requiring work passes, EOR services are not obsolete in Singapore.

Hiring Singapore Permanent Residents (PRs)

Singapore PRs:

• Do not require work passes

• Are not classified as foreigners under the EFMA

This means PRs can be legally employed through an EOR arrangement in Singapore without immigration issues.

Hiring Singapore Citizens

EORs can also employ Singapore citizens for:

• Local operational or support roles

• Short- to mid-term hiring needs

• Situations where entity setup is not yet justified

In these scenarios, EORs remain highly effective for managing:

• Payroll

• CPF contributions

• Tax reporting

• Employment compliance

How Aniday Helps Companies Hire in Singapore Compliantly

At Aniday, we take a compliance-first approach to global hiring, and Singapore is not a market where shortcuts end well.

We help companies hire with confidence through:

• Strategic advisory: Selecting the right hiring model based on nationality, role, and long-term plans

• Local EOR solutions: Managing payroll and CPF for Singapore citizens and PRs

• Entity & Employment Pass support: Assisting with company setup and EP sponsorship when foreign talent is required

• Regional flexibility: Leveraging our APAC network to hire foreigners in markets where EOR regulations are more flexible.

Final Thoughts

EOR services remain powerful tools across many regions, but Singapore operates under a stricter regulatory model. An EOR cannot be used to sponsor work passes for foreigners in Singapore, and treating Singapore like other APAC markets is where many hiring strategies fail.

The more important question is not whether EOR works, but where it fits.

When your hiring model aligns with workforce nationality and Singapore’s legal reality, you move faster with confidence, not compliance risk.

If you’re planning to hire in Singapore and want clarity on the right structure, Aniday is here to help.

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