Over ten thousand Employment Pass holders working in Singapore are also founders, angel investors, or advisors who have a stake in other companies. The question of whether they can formalise that relationship by taking a board seat comes up regularly — and the answer is more nuanced than most online guides suggest.
Under Singapore law, an EP holder who wants to serve as a director of a company other than their primary employer must first obtain a Letter of Consent (LOC) from the Ministry of Manpower. Per MOM’s guidance on secondary directorships, directorship duties are considered “work”, and work performed by a pass holder outside the sponsoring employer requires MOM’s approval. The rules differ materially depending on which pass you hold — whether a standard Employment Pass, a Personalised Employment Pass (PEP), or a ONE Pass.
Understanding where the line is drawn will save you significant compliance risk. This article explains each pass type’s specific rules, what MOM looks for in an LOC application, and the common scenarios most EP holders face.
What MOM Actually Says About EP Secondary Directorships
The MOM page on employment pass secondary directorships states plainly: “Get approval from MOM by applying for a Letter of Consent (LOC), as directorship duties are considered work.” This is the foundational point from which everything else flows.
Directorship is not treated the same as passive shareholding. Sitting on a board, signing board resolutions, and exercising directors’ duties under the Companies Act are all regarded as work activities. An EP holder who takes on a directorship in a second company without first obtaining an LOC is in breach of their pass conditions — a serious matter that can lead to pass cancellation.
When Will MOM Grant an LOC?
MOM applies a threshold test. The agency will generally approve the LOC if the second company is related by shareholding to the EP holder’s primary employer, and that relationship is visible in ACRA records, and the directorship is for purposes related to the EP holder’s primary employment — for example, a regional director sitting on the board of a subsidiary in the same corporate group.
MOM may also grant an LOC for indirect shareholding relationships, such as where a holding company owns both the EP-sponsoring entity and the second company. The LOC application takes up to five weeks to process, and the LOC is valid only until the expiry or cancellation of the underlying EP — a new LOC must be obtained each time the EP is renewed.
What About an Unrelated Company?
If the second company has no shareholding relationship with the EP holder’s primary employer, MOM does not grant the LOC automatically. The application is referred to the relevant sector government agency, which must support the appointment before MOM will approve it. There is an additional exception for cases where the EP holder is sufficiently senior or holds a significant ownership stake in the second company — each application is assessed on its merits, and MOM will request supporting information before deciding.
Practically, most “I want to join the board of my friend’s startup” scenarios will not qualify unless there is a demonstrable shareholding link or a compelling seniority argument. If you are in this situation, it is worth obtaining a professional assessment before proceeding — a rejected LOC application is on record.
EP Holders and Shareholding: No Restriction
This is an important distinction. MOM does not restrict EP holders from being shareholders in Singapore companies. No LOC, no notification, no approval is required to purchase shares, receive shares via an employee share plan, or invest in a Singapore company as a passive angel investor — as long as the EP holder is not simultaneously exercising directorship duties.
An EP holder can, for example, hold a 25% equity stake in a Singapore company without any MOM intervention, provided they are not on the board and are not performing operational work for that company. The moment they accept a board appointment, the LOC requirement applies.
Personalised Employment Pass (PEP) Holders: A Critical Restriction
PEP holders face a materially different constraint that catches many senior professionals off-guard. A person holding a Personalised Employment Pass cannot be both a director and a shareholder of any Singapore-incorporated company simultaneously. The combination of the two roles — regardless of which company it is — disqualifies them from holding the PEP.
This means a PEP holder who wants to make an equity investment in a Singapore startup must choose: they can hold shares without taking a board seat, or they can serve as a director without holding equity. The moment they occupy both positions in the same company, they are in breach of PEP eligibility conditions. For PEP holders who are founders or active angel investors, this restriction is sometimes the deciding factor in considering a transition to a different pass type. Our Personalised Employment Pass (PEP) complete guide covers the full eligibility framework, including the director-shareholder rule and how it interacts with salary requirements.
ONE Pass Holders: Maximum Flexibility
The Overseas Networks & Expertise (ONE) Pass stands at the opposite end of the spectrum. ONE Pass holders are explicitly permitted to work concurrently for multiple employers, start and operate their own Singapore-incorporated companies, hold directorships and equity stakes in multiple companies simultaneously, and serve as a director of any Singapore company without a separate LOC requirement.
This flexibility makes the ONE Pass the preferred vehicle for founders, senior executives who advise portfolio companies, and investors who are operationally active across several ventures in Singapore. However, the ONE Pass carries a fixed monthly salary threshold of SGD 30,000 per month (from one employer) and is not accessible to most standard EP holders. Our article on who actually qualifies for the ONE Pass in 2026 examines the full eligibility criteria, including the outstanding-achievement pathway and the common misconceptions about salary aggregation.
The ACRA Registration Step After LOC Approval
Once MOM grants the LOC, the appointing company can register the EP holder as a director through ACRA’s BizFile+ portal. The LOC is valid only until the expiry or cancellation date of the underlying EP. When the EP is renewed, a new LOC application is required — the old LOC does not roll over automatically. The timeline for ACRA director registration is typically one to two business days once the board resolution is in place. Every Singapore-incorporated private company must also have at least one director who is ordinarily resident in Singapore under Section 145 of the Companies Act. For a full explanation of what “ordinarily resident” means and how EP holders satisfy this requirement, see the Raffles Corporate Services guide on the Section 145 resident director requirement.
Common Scenarios: Answered Directly
Scenario A: An EP holder wants to join the board of a subsidiary within the same corporate group
This is the clearest case for LOC approval. Apply for the LOC through myMOM Portal, have your primary employer confirm it has no objection, and ensure the shareholding relationship between the two entities is visible in ACRA records. MOM will generally process within five weeks.
Scenario B: An EP holder holds 8% equity in a Singapore startup and wants to join its board
This is not straightforward. There is no shareholding relationship between the two companies, and 8% is unlikely to meet the “significant ownership stake” threshold on its own. You would need the relevant sector agency’s support, and there is no guarantee of approval. Seek an expert assessment before proceeding.
Scenario C: An EP holder wants to invest SGD 80,000 in a friend’s startup without joining the board
No LOC required. Passive shareholding is not regulated by MOM.
Scenario D: A PEP holder who owns 20% of a startup is asked to join its board
This would breach PEP conditions. The PEP holder must either decline the board seat, divest the equity before accepting, or assess whether transitioning to a standard EP or ONE Pass makes sense for their career stage.
Getting the Pass Strategy Right
The choice of pass type has real consequences for how freely a foreign professional can participate in Singapore’s startup and investment ecosystem. The standard EP is optimised for salaried employment. The PEP trades employer flexibility for additional restrictions on equity-plus-directorship. The ONE Pass is built for the multi-venture professional who needs maximum operational freedom.
For a comprehensive comparison of the EP, PEP, and ONE Pass — including salary thresholds, COMPASS framework applicability, and career-stage suitability — see our guide on which Singapore work visa fits your career stage. For full EP eligibility requirements including COMPASS scoring, the Complete Singapore Employment Pass Guide 2026 is the starting point.
Little Big Employment Agency (Licence No. 19C9790) helps foreign professionals, founders, and HR teams navigate Singapore’s pass framework. If you need a structured assessment of your directorship and pass options, contact our team. For company incorporation or corporate secretarial matters related to director appointments, visit Raffles Corporate Services.
— The Editorial Team, Little Big Employment Agency