Employment Pass and Limited Partner roles

[phoenix11]

Hi all,
I had recently applied to renew my Employment Pass. Unfortunately, it was rejected stating that an EP holder cannot be a partner or general proprietor of any organisation, which was surprising given that apart from my job for which I had an EP, I wasn't aware of working as a partner or sole proprietor anywhere else.

However, I had invested in a venture capital fund in Singapore, which was structured as a Limited Partnership. A Limited Partnership has a General Partner (GP), who is responsible for the operation of the fund and various Limited Partners (LPs), who are passive investors - and have no responsibility towards the running of the fund (like shareholders in a company). I was a LP here, a passive financial investor with no role in managing or operating the fund.

I didn't realise this would be a blocking factor for an EP, given that EP holders are permitted to be shareholders of companies other than the ones employing them, provided they don't have any operational / managerial roles in such companies.

Anyway, long story short, it appears MOM didn't treat a limited partner as a pure financial investor, which led to the initial rejection of the EP. They had assumed I was employed the company in which I was a limited partner in addition to the company that had sponsored my EP, which was not the case.

To address this, we transferred the LP interest away from me individually so that I ceased to be a limited partner, registered the change on ACRA and appealed the MOM decision. The appeal was accepted and the EP was renewed.

Putting this out there in case it is of help to anyone.

[PNGMK]

Interesting issue. I'm director and partners in a few firms for similar reasons. The best being one being when a mate rushed into my office in G* to complain "HR have told me I'm fired if I can't drop this sole proprietorship I set up to buy a van with! Can you take it over? (we set it up as a partnership - that is permitted).

[Strong Eagle]

Putting this out there in case it is of help to anyone.

I can't help but believe that someone was asleep at the wheel when they processed your EP; further, had you appealed, noting that your role as a LP was essentially the same as being a shareholder, that your appeal would have been successful with no change in ownership.

My $0.02 based upon my interactions with MoM over 10 years... they usually get the law right. As a disclaimer, I have no inside information that could prove my assertion to be true.

[phoenix11]

(we set it up as a partnership - that is permitted).

Interesting, in my case, I was an LP in a limited partnership and that was flagged as an issue by MoM, whereas it appears in your friend's case, despite being a partner in a partnership (owning the vehicle), no issue was triggered.

Apparently, as a registered limited partnership, the LPs too are registered on ACRA. Now, the details of my LP interest do not appear on my ACRA people's profile, nor do the details of any LPs appear on the fund's entity profile (I checked) - because of various regulations governing confidentiality of investors in LPs. However, those details are registered on ACRA nevertheless, and it looks like the MoM have access to this non-public database. This must have been picked up when they ran a routine background check at the time of EP renewal.

Not sure if your partnership / buddy's partnership interest was registered on ACRA. Mine was, and it may be the differentiating factor.

[phoenix11]

had you appealed, noting that your role as a LP was essentially the same as being a shareholder, that your appeal would have been successful with no change in ownership.

Perhaps, but given that we were cutting it fine with the imminent expiry of my previous EP, didn't want to take that chance. I ultimately moved the LP interest to an entity that I own, so economically there was no difference.

I was told by our advisors that with respect to EP renewals, the first round tends to be automatic / box checking, and this case may have simply failed that automatic screening step because it was slightly out of the ordinary.

[PNGMK]

(we set it up as a partnership - that is permitted).

Interesting, in my case, I was an LP in a limited partnership and that was flagged as an issue by MoM, whereas it appears in your friend's case, despite being a partner in a partnership (owning the vehicle), no issue was triggered.

Apparently, as a registered limited partnership, the LPs too are registered on ACRA. Now, the details of my LP interest do not appear on my ACRA people's profile, nor do the details of any LPs appear on the fund's entity profile (I checked) - because of various regulations governing confidentiality of investors in LPs. However, those details are registered on ACRA nevertheless, and it looks like the MoM have access to this non-public database. This must have been picked up when they ran a routine background check at the time of EP renewal.

Not sure if your partnership / buddy's partnership interest was registered on ACRA. Mine was, and it may be the differentiating factor.

The partnership is definitely on ACRA. I think from memory he stepped down while he sorted his EP and then joined the partnership.

[xemsomenh]

Thank you so much for sharing this — incredibly helpful and eye-opening! Most of us wouldn’t have thought that being a passive Limited Partner could be misinterpreted by MOM as a potential conflict for EP eligibility. It’s good to know that even without an operational role, such nuances can still affect renewals.

Glad your appeal was successful and really appreciate you taking the time to lay out the details — I’m sure this will be useful to many others in similar situations!

[phoenix11]

You are very welcome!