Introducing A New Manpower For Strategic Economic Priorities (M-SEP) Scheme

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Feb 02, 2023

Introducing A New Manpower For Strategic Economic Priorities (M-SEP) Scheme

Overview of the M-SEP Scheme

The Singaporean government has recently launched the Manpower for Strategic Economic Priorities (M-SEP) Scheme to help businesses hire foreign manpower to support their economic growth and expansion plans. This scheme is designed to provide businesses with access to a larger pool of skilled workers, while also helping them meet their strategic economic objectives.

The M-SEP Scheme offers a range of benefits, including higher work permit and S Pass quota, additional flexibilities, and salaries requirements that are more competitive than those offered under other schemes. It also provides businesses with an easier application process and faster processing times. With the M-SEP Scheme, businesses can now hire foreign manpower more easily and efficiently in order to achieve their strategic economic goals.

Higher Work Permit and S Pass Quota

On December 13th, the Ministry of Manpower (MOM) and the Ministry of Trade and Industry (MTI) declared that eligible firms and businesses now have the freedom to engage S Pass and work visa holders for a limited period of time, even if it surpasses the current Dependency Ratio Ceiling (DRC).

The cap for such recruits is 50 employees per company, up to 5% of the base workforce headcount of the organization. This is valid for another two years if the company continues to meet the requirements.

Businesses that meet the requirements of the new Manpower for Strategic Economic Priorities (M-SEP) program may apply for additional S Pass and work permit quotas equal to up to 5% of their basic workforce headcount, subject to a maximum of 50 employees per company.

The work permit is for migrant workers in the construction, manufacturing, maritime shipyard, process, or services industries, whereas the S Pass is for foreigners with mid-level skills.

The Dependency Ratio Ceiling (DRC) establishes the maximum percentage of foreign employees that a business may hire relative to its entire workforce.

Summary:

Depending on their industry, businesses must adhere to a foreign worker quota or dependency ratio ceiling.

However, under M-SEP, qualified enterprises will be permitted to temporarily expand their quota.
Upon enrolling in the program, companies receive this enhanced quota for a period of two years.

Following that, according to circumstances, it may be renewed.

The duration of M-SEP is three years.

Benefits of the M-SEP Scheme

The Manpower for Strategic Economic Priorities (M-SEP) Scheme offers a range of benefits to businesses looking to hire foreign manpower.

Firstly, businesses can access a larger pool of skilled workers than they would be able to under other schemes.

Secondly, the scheme provides higher work permit and S Pass quota, allowing businesses to hire more foreign workers.

Thirdly, the scheme offers additional flexibilities such as allowing businesses to hire foreign workers for a shorter period of time.

Finally, the salaries requirements are more competitive than those offered under other schemes, making it easier for businesses to attract and retain skilled workers.

Qualifying Businesses

The Manpower for Strategic Economic Priorities (M-SEP) Scheme is open to businesses in Singapore that are looking to hire foreign manpower to support growth of businesses and expansion plans. Qualifying businesses must meet the following criteria:

1. Have a valid business registration with the Accounting and Corporate Regulatory Authority (ACRA).

2. Have a minimum of 30% local shareholding, with at least one Singapore Citizen or Permanent Resident as a director or shareholder.

3. Be able to demonstrate that hiring of workers that are foreign under the M-SEP Scheme will help them achieve their strategic economic objectives.

4. Be able to provide evidence of their ability to pay qualifying salaries that are competitive with those offered by other employers in the same industry sector, setting a salary benchmark.

5. Be able to demonstrate good employment practices, such as providing fair wages, reasonable working hours, and safe working conditions for all employees.

6. Not have any outstanding violations of employment laws or regulations in the past three years prior to application submission date.

7. Not be on the list of companies excluded from hiring foreign workers under any government scheme or policy directive issued by MOM or MTI.

8. Not be a sole proprietorship or partnership.

If you are an business owner and you are looking for expansion, this scheme will be of brilliance. More information will be appended in the later part. Let's dig deeper in details together.

Salaries Requirements And Additional Foreign Manpower Flexibilities

The "local workforce" is computed as follows: (a) one local employee if he or she earns a local qualifying wage of at least S$1,400 per month; (b) 0.5 local employee if they do, or (c) 0.5 local employee if they earn between S$700 and S$1,400 per month, or (d) S$700 to S$1,400, respectively.

Businesses must meet both of the following requirements in order to be eligible for the M-SEP Scheme:

Condition (a): Participate in initiatives or activities that are in line with important economic opportunities and priorities

To satisfy Condition (a), businesses must take part in initiatives or activities that support one of the following key economic priorities: I investments that support Singapore's hub strategy; (ii) innovation or research and development; or (iii) aggressive internationalisation.

To qualify, businesses must either participate in at least one initiative launched by relevant supporting economic agencies or satisfy certain criteria in terms of their financial standing. There will be periodic updates to the list of initiatives and the established economic criteria.

Condition (b): Agree to recruit and/or educate locals with training opportunities from government-led programmes.

To satisfy Condition (b), businesses must pledge to hire and/or train locals by growing the local workforce's overall size, sending local employees to specific whitelisted training programmes, and/or setting the standard for training excellence in the industry (e.g., filling critical skill gaps or manpower shortages for the sector, and recognised for excellent established workforce development with learning structures).

How to Apply for the M-SEP Scheme

Check out MOM’s website here for details on the qualifying criteria for M-SEP Scheme eligibility for your business.

Online Application Form on MOM's Website

Businesses interested in applying for the M-SEP Scheme can do so through an online application form on MOM's website. The form requires applicants to provide basic information about their business, such as the company name, address, and contact details. Additionally, applicants must also provide information about the initiatives or activities they are participating in that are in line with important economic opportunities as well as priorities.

Once the application is submitted, MOM will review the application and contact the applicant if additional information is required.

Required Documents and Information

Businesses applying for the M-SEP Scheme must provide certain documents and information in order to be eligible. These include:

• A copy of the company's business registration certificate;

• A copy of the company's latest financial statements;

• Proof of participation in initiatives or activities that are in line with important economic priorities;

• Details on the number of local employees employed by the company, as well as their salaries;

• Details on any plans to recruit and/or educate locals; and

• Any other relevant information that may be requested by MOM.

Once the application is approved, businesses will receive a letter of approval from MOM. This letter will include details on the incentives and benefits that are available under the M-SEP Scheme. Businesses must then submit a claim form to MOM in order to receive their incentives and benefits.

The claim form requires businesses to provide information on their expenditures related to recruiting and/or educating locals, as well as other relevant information.

Processing Time

The processing time for applications to the M-SEP Scheme is typically within four weeks from the date of submission. However, this may vary depending on the complexity of the application and other factors.

Frequently Asked Questions

What types of jobs are covered under the Scheme?

The M-SEP Scheme covers jobs in the following sectors: manufacturing, construction, services, and information technology. The types of jobs covered under the scheme include skilled and semi-skilled positions such as engineers, technicians, operators, and other related roles.

What is the duration of Employment Permits granted under the Scheme?

Employment Permits granted under the M-SEP Scheme are valid for up to two years.

What are the incentives and benefits available under the M-SEP Scheme?

The incentives and benefits available under the M-SEP Scheme include: a waiver of the foreign worker levy for up to two years, access to training grants, and priority processing of Employment Pass applications. Additionally, businesses may also be eligible for other incentives such as tax deductions and subsidies.