If you run a business, you may be required to produce credit facilities or guarantor-ship from time to time. This can often be fulfilled by purchasing a bond from an insurance company by paying a premium.
In Singapore, the most common bonds are
If you run an employment agency, you are required to submit Employment Agency Bond (Banker’s Guarantee) to Ministry of Manpower.
Do you know that you have been overpaying the insurance by 7% because you were paying GST on the bond premium?
An employment agency helps other companies with their recruitment and staffing needs, normally acting as the middle party between employers and potential employees.
All employment agencies are required to apply an Employment Agency License (EAL) prior to starting its business activities. This is the basic license required for all categories of recruitment agencies and is governed by the Ministry of Manpower (MOM) of Singapore.
Depending upon the profile of your candidates, an employment agency can choose to apply for
Both types of agencies are required to furnish a Security Deposit in the form of Banker’s Guarantee to MOM. The security bond requirements are:
Many agencies purchase the bond from the banks since it is called “Banker’s Guarantee”. But banks typically require 100% deposits with the banks as cash collateral. That means if you are a start-up, you have to lock $60,000 with the bank and severely affect your business cash flow.
You may not be aware that you can purchase a security bond through an insurance company who can issue the Banker’s Guarantee on your behalf.
The biggest benefit of using an insurance company is that you normally don’t have to deposit your money with the insurer, but merely acting as an guarantor for the bond.
In this case, you can free up your $60,000 cash to run your core business.
As a sub contractor, when you are allocated “man-year entitlements” by the main contractor, you are required to put into effect an Undertaking Bond.
The Bond is to indemnify the main contractor for expenses incurred relating to foreign workers arising from your default.
You can purchase an insurance to cover such requirements and we can offer you the most competitive quote for this.
As an employer, it is compulsory for you to purchase a security bond for each non-Malaysian foreign worker you want to employ. You can buy the bond at any bank or insurance company, but what will be the best choice?
This article will help you understand security bond requirements by Ministry of Manpower (MOM) for foreign workers and how you can save money, time and hassle when purchasing security bond insurance.