Author: Lawyer Zhang Jingxinyue, PRC-qualified Lawyer | Singapore Registered Foreign Lawyer
Note: Against the backdrop of Singapore serving as a regional operational hub, whether key personnel can successfully obtain work passes often directly determines whether an enterprise can truly establish local operations.
In recent years, Singapore has introduced a more structured assessment mechanism for foreign employment through the COMPASS points system. After the relevant rules were adjusted in 2026, some Chinese-funded enterprises have experienced concentrated rejections in actual applications, reflecting a clear mismatch between employment structure and regulatory logic.
Taking a case of consecutive EP rejections involving a Chinese-owned SaaS enterprise as a starting point, this article reviews the key factors that Chinese enterprises currently tend to overlook in Singapore employment amid changes to the COMPASS points system and summarizes corresponding structural adjustment approaches.
01 Practical Case: Core Facts and Regulatory Logic Behind the Consecutive EP Rejections of a Chinese-Funded SaaS Enterprise
(I) Case Facts
In January 2026, a leading Chinese-owned SaaS enterprise, in order to expand into the Southeast Asian market, registered and established a wholly-owned subsidiary in Singapore and planned to second five core R&D personnel (including algorithm engineers and backend development engineers) to Singapore to take charge of localized product development and launch. It immediately submitted EP pass applications to Singapore’s Ministry of Manpower (MOM).
Within 10 working days after submission, all five R&D personnel’s EP applications were rejected. In the rejection notice, MOM specified two core reasons: first, the Singapore subsidiary’s employee diversity score was 0, failing to meet the basic scoring requirements of the COMPASS work pass framework; second, the local skills suitability score for the positions applied for was insufficient and did not meet the regulatory assessment standards.
The rejection directly brought the Singapore subsidiary’s product R&D and market interface work to a complete standstill. The costs already invested in entity establishment, office rental, and other items could not generate effective output. To solve the problem, the enterprise urgently adjusted its employment structure, hiring one senior technical architect and two local R&D personnel in Singapore. After restructuring its employment system, it resubmitted the application. The approval process took nearly one month to complete, which not only delayed the business launch cycle but also added compliance costs for localized employment.
2. Deconstructing the Regulatory Logic Behind the Rejection
This case is not an isolated one; it is a typical microcosm of employment applications by Chinese enterprises going to Singapore after the 2026 COMPASS new rules took effect. From MOM’s review perspective, the core reason for the rejection was not that any individual applicant’s qualifications, education, or salary were below the threshold, but rather that the enterprise’s overall employment structure was fundamentally misaligned with the underlying logic of Singapore’s foreign manpower regulation.
Specifically, the enterprise continued to use the traditional model of “seconding a purely Chinese-national team,” and did not incorporate factors such as employee nationality structure, local employment planning, and localization of positions into the design of its employment system. As a result, it had a fundamental absence in core scoring items under the COMPASS structured assessment framework. This is precisely the most critical change in the regulatory orientation after the 2026 COMPASS revisions — a shift from a single-point review of individual applicants’ qualifications to an overall compliance assessment of the enterprise’s employment structure.
The key issue in such cases is not whether individual applicants meet the qualification standards, but whether the enterprise incorporates the employment structure itself into its compliance design.
02 Core Logic of the 2026 COMPASS Revisions: From a Scoring Tool to Structural Control
Singapore’s COMPASS work pass framework is divided into two categories: the EP (Employment Pass, for executives and professional/technical talent) and the SP (S Pass, for mid-skilled talent). Both adopt a points-based admission system, with the EP pass passing score set at 45 points and the SP pass passing score at 30 points. The 2026 revisions did not simply raise the score threshold; by adjusting scoring weights and indicators, they completed a fundamental logical shift from a “scoring tool” to “employment structure control.” The core changes are reflected in four dimensions:
1. New Structural Scoring Indicators, Accounting for 30% of the Weight
The new rules add two core scoring indicators, bringing the enterprise’s employment structure into the mandatory assessment scope and directly determining the base approval rate of applications:
1. Employee Diversity Score (Up to 15 Points)
The score is based on the nationality composition of the enterprise’s non-Singaporean employees. The lower the proportion of employees of a single nationality, the higher the score. If all foreign employees of the enterprise are of the same nationality, this item is directly scored 0. The core purpose of this indicator is to push enterprises to move away from the single-nationality secondment model and achieve a more diversified workforce configuration.
2. Local Skills Suitability Score (Up to 15 Points)
The score focuses on the match between the position applied for and Singapore’s local shortage occupation list, as well as the degree to which the salary level aligns with local market standards for the same position. The higher the match between the position and local market demand, and the more closely the salary aligns with local market levels, the higher the score. This indicator directly guides enterprises to align their position design and compensation systems with Singapore’s local labor market rules.
2. Raising the Salary Benchmark and Strengthening Market Match Requirements
The new rules raise the minimum salary threshold for the EP pass from SGD 5,000 to SGD 5,500. The salary benchmark for executive and senior technical positions is simultaneously raised to SGD 8,000 and above. Applicants whose salary falls below the benchmark will have corresponding points deducted. This adjustment is not simply about increasing entry costs; it uses salary as a lever to select high-end foreign talent who match local market demand and prevent enterprises from squeezing the local job market through low-cost secondment models.
3. Optimizing the Scoring Rules for Education and Skills, and Highlighting Substantive Qualification Matching
The new rules no longer grant blanket recognition to overseas academic qualifications. Qualifications from institutions outside Singapore and mainstream European and American universities must complete official certification before they can be counted in the scoring. At the same time, bonus points for professional skills certificates have been added, guiding applicants’ qualifications and skills to substantively match the positions applied for and eliminating formalistic applications where positions and qualifications are misaligned.
4. Strengthening the Primary Responsibility of Enterprises and Incorporating Local Employment Planning into the Review Scope
The new rules expressly require that when submitting work pass applications, enterprises must simultaneously submit a local talent recruitment plan for the next 6–12 months, specifying recruitment targets, position setup, and timelines. Enterprises that fail to submit a plan, or whose plan has not been substantively implemented, will have points deducted. This requirement directly ties an enterprise’s local employment obligations to the admission of foreign talent.
03 The Core Contradiction Behind Concentrated EP Rejections for Chinese Enterprises: Mismatch Between Employment Structure and Regulatory Logic
Judging from the rejection cases after the 2026 new rules took effect, the concentrated EP rejections for Chinese enterprises are essentially not due to insufficient individual applicant qualifications, but rather four core mismatches between enterprises’ traditional employment models and the structured regulatory logic of the COMPASS framework:
1. Fundamental Conflict Between the Single-Nationality Secondment Model and Employee Diversity Requirements
This is the most common trigger for rejections of Chinese enterprises under the new rules. At the early stage of establishing a Singapore entity, most Chinese enterprises tend to adopt a model of “seconding a purely Chinese-national team” and do not hire any local Singaporean employees. This directly results in a 0 score for the employee diversity indicator. Even if applicants meet all individual criteria such as education, salary, and skills, it is difficult to make up the score gap caused by this missing item, and ultimately the EP pass passing score cannot be reached. This model fundamentally contradicts the COMPASS framework’s regulatory orientation toward promoting workforce diversity and inevitably leads to structural scoring defects.
2. Disconnect Between Cost-Oriented Salary Setting and Local Labor Market Rules
Some Chinese enterprises, for cost control reasons, set expatriate employees’ salaries only slightly above MOM’s minimum benchmark, or directly follow their domestic compensation systems when setting salaries for Singapore positions, resulting in salaries far below the local market median for comparable positions in Singapore. Such arrangements not only directly lead to low salary scores but are also likely to be deemed by MOM as “insufficient alignment between the position and local skills suitability,” fundamentally negating the reasonableness of the application. The core of this problem is that the enterprise has not considered its compensation system within the rule framework of Singapore’s local labor market, creating a misalignment in regulatory understanding.
3. Mismatch Between Insufficient Localization of Position Design and Skills Matching Requirements
When applying for work passes, some Chinese enterprises define positions and describe responsibilities in ways that do not match Singapore’s local occupational classifications and shortage occupation list. For example, they may simply classify a core algorithm engineer as an ordinary development engineer, or define a regional management role as an ordinary administrative role. As a result, the position cannot qualify for bonus points under shortage occupation categories, and the review may even produce negative comments such as “education and skills do not match the position requirements.” The essence of this insufficient localization in position design is that the enterprise does not understand the COMPASS framework’s core requirement of “substantive person-position matching,” resulting in a mismatch between application materials and review standards.
4. Conflict Between Formalistic Performance of Primary Responsibility and the Regulator’s Substantive Review
At the early stage of establishing a Singapore entity, many Chinese enterprises believe that “a newly established enterprise does not need to hire local employees.” In their work pass applications, they either fail to submit a local employment plan or submit only a formalistic plan with empty content, no specific targets, and no implementation path. MOM then determines that they have “failed to perform the primary responsibility for local employment” and deducts points. The core of this problem is that the enterprise fails to recognize that under the COMPASS framework, foreign employment admission and enterprise obligations to localize employment are an inseparable whole. It focuses only on admission applications for individual talents while ignoring the primary responsibility of the enterprise itself, creating a fundamental mismatch in the performance of compliance obligations.
04 Compliance Restructuring: Adjustment Pathways for Chinese Enterprises’ Singapore Employment Structure
The essence of the COMPASS framework is not a scoring tool for “making up points item by item,” but a structured compliance model for foreign employment in Singapore. To fundamentally solve the problem of concentrated EP application rejections, the core for Chinese enterprises is not to patch individual scoring items, but to restructure their own employment framework so that it becomes internally consistent with Singapore’s regulatory logic. This can be advanced from four dimensions:
1. Restructuring the Employment Model: From a “Pure Secondment” Model to a Tiered “Local + Seconded” Configuration
Enterprises must completely abandon the traditional model of “seconding a purely Chinese-national team” and, based on their own stage of overseas expansion, build a tiered employment structure:
- Early-stage enterprises: Prioritize the completion of a basic local team configuration. First hire 1–2 Singaporean local employees to handle basic work such as administration, compliance, and local market liaison, so as to fundamentally resolve the problem of a 0 score for employee diversity. Then second a streamlined team of 1–2 core executives or technical leads, ensuring that their scoring items fully meet the standards and complete the initial setup of the core team. For non-core positions, supplement with flexible employment models such as local outsourcing or freelancers, which both satisfies the diversity scoring requirements and controls initial employment costs.
- Growth-stage enterprises: Adopt a balanced “local + seconded” configuration. The seconded team is responsible for key areas such as core strategy and technology R&D, while the local team is responsible for localization work such as market expansion, client liaison, and compliance operations. The proportions of the two are balanced, which both ensures that the team diversity score stably meets the standards and enables localization of business through the local team.
2. Localization Adaptation of Positions and Compensation Systems
Enterprises need to fully incorporate position design and compensation systems into the rule framework of Singapore’s local market:
- Position design must be strictly benchmarked against Singapore’s local occupational classification standards and shortage occupation list. Precisely define job titles, responsibility requirements, and qualification conditions to ensure that core technical and management positions can match the bonus items for shortage occupations and achieve substantive person-position matching;
- The compensation system should be formulated with reference to the median salaries for the same industry and positions published by the Ministry of Manpower. Core position salaries should be no lower than the local market median level. This both ensures that the salary score meets the standard and, through salary standards, demonstrates to MOM the seniority and necessity of the position, thereby increasing the approval rate.
3. Substantive Performance of Enterprises’ Primary Responsibility
Enterprises need to transform their local employment planning from “formalistic documents” into a “substantive implementation plan.” The local employment plan submitted in a work pass application must specify the positions to be hired, number of hires, timelines, and implementation paths for the next 6–12 months, matching the pace of enterprise business development. At the same time, enterprises should establish a sound local recruitment, training, and management system to demonstrate to MOM that they genuinely perform their primary responsibility for local employment, rather than simply using a seconded team to replace local employment.
4. Compliance Supplement Through Flexible Employment Models
For enterprises that cannot quickly complete the establishment of a local team in the short term, they may use formal EOR (Employer of Record) service agencies registered with MOM to address urgent needs through compliant flexible employment models. The EOR agency acts as the employing entity, providing foreign employees with compliant employment subjects, payroll distribution, CPF contributions, and pass application services. At the same time, it assists the enterprise in completing local talent recruitment and employment system setup, quickly adapting to the regulatory requirements of the COMPASS framework and reducing employment compliance risks.
Conclusion
The adjustment of the COMPASS framework is essentially not simply raising the entry threshold, but guiding enterprises to restructure their employment structures.
For Chinese enterprises, an EP application rejection is often not an individual problem, but the result of a mismatch between the overall employment arrangement and Singapore’s regulatory logic. Employee nationality structure, position design, salary levels, and local employment arrangements are all incorporated into the same assessment framework.
From a practical perspective, COMPASS is not merely a scoring tool, but more of a “compliance model” for employment structure. If enterprises still advance local business through a single-secondment model, it will often be difficult to obtain stable approvals under this framework.
Therefore, the key is not to “make up points” item by item, but whether the employment structure itself can be self-consistent under the regulatory logic.
- This article has been compiled based on the 2026 COMPASS work pass new rules issued by Singapore’s Ministry of Manpower (MOM), official review positions, and practical experience in cross-border employment legal practice. It is intended only as a practical reference for Chinese enterprises expanding to Singapore on foreign employment compliance, and does not constitute any specific legal opinion, operational advice on pass applications, or customized employment solution advice.
-For further discussion of relevant issues or to obtain case-specific professional services, please contact the China-Singapore Legal News professional team.
This article is general information and not legal advice. Specific matters require assessment by appropriately qualified professionals.