Do I Need a Local Entity to Hire in Singapore?

In Singapore, a "local entity" typically refers to a business structure like a subsidiary or branch office that allows you to be recognized as an employer. This setup is essential for fulfilling local payroll and employment obligations, ensuring compliance with Singapore's employment laws.

Without a local entity, you can't effectively manage payroll, issue compliant employment contracts, or meet mandatory employment protections. An Employer of Record (EOR) can help bridge this gap by acting as the legal employer, allowing you to hire without the complexities of establishing a local entity.

What is Required to Employ Someone in Singapore?

• Local employing entity required to directly employ? Yes (required for direct employment and compliance)
• Payroll registration required? Yes (must register with the Inland Revenue Authority of Singapore)
• Withholding/tax remittance required? Yes (employers must withhold income tax from salaries)
• Social contributions required? Yes (mandatory contributions to the Central Provident Fund)
• Local employment agreement required? Yes (written contracts are standard practice)
• Mandatory benefits to budget? Yes (includes annual leave, sick leave, and CPF contributions)
• Works council/collective agreements considerations? Not typically (Singapore does not have mandatory works councils)

Best Options If You're Hiring in Singapore

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but it’s important to ensure that the contractor arrangement is compliant with local laws.

Hiring contractors can be a flexible option, but you need to be cautious about misclassification risks. In Singapore, if a contractor is deemed to be working like an employee, you may face legal repercussions. Here are some key points to consider:

• Ensure the contractor has multiple clients to demonstrate independence.
• Define the scope of work clearly to avoid any overlap with employee duties.
• Monitor the level of control you exert over the contractor’s work.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–6 weeks to set up an entity in Singapore, depending on the type of entity and required registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated SGD 500–1,500 per month ($370–$1,110)
• Payroll provider: Estimated SGD 100–300 per employee per month ($75–$225)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated SGD 1,200–3,500 per year ($890–$2,590)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer CPF contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Singapore

Hiring in Singapore can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Singapore quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s managed payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.