CPF contributions are required on wages payable to any Singapore Citizen or Permanent Resident employee working in Singapore, even if the contract is signed overseas.
An overseas employer employs directly
A prospective overseas employer should ensure that it has legitimate business presence in Singapore and that it is registered with Accounting and Corporate Regulatory Authority (ACRA).
You should also communicate employee's CPF rights clearly to the Singapore employee before the start of his employment to avoid subsequent disputes.
Bestar is able to assist an overseas employer with no presence in Singapore to register a company with ACRA, and provide payroll services.
An overseas entity employs through an Employer of Record (EOR) to work for the entity
An overseas entity may consider employing Singapore employee through an EOR.
An EOR serves as the employer, taking on employment-related roles such as paying salaries for its employees, withholding taxes, paying employment-related benefits, while its employees perform work for its client, e.g. an overseas company.
When an employee is employed through an EOR to work for an overseas entity, the EOR is his employer and will be responsible for paying his CPF contributions. Do read through the employment contract with the EOR to ensure employee's rights are protected.
While it may be easy to engage an EOR located in Singapore compared to setting up a Singapore entity, you should still exercise caution when engaging an EOR. The recovery of any unpaid CPF contributions depends on the EOR’s financial ability to pay up the arrears.
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