Security Bond For Foreign Workers: A Complete Guide

The foreign worker security bond is a legal guarantee that Singapore companies purchase from an approved bank or insurance company. It is a binding pledge to pay the government (MOM) if a worker breaks MOM regulations. The bond guarantees S$ 5,000 per worker. Critically, the cost of the bond cannot be passed on to or deducted from the worker in any form.

The bond is required for all non-Malaysian Work Permit holders across sectors. Malaysian workers are exempt due to a longstanding bilateral arrangement between Singapore and Malaysia.

Getting your security bond right involves more than just making a purchase. From gathering necessary documentation to understanding what happens when a bond is forfeited, each step has compliance implications that must not be overlooked. Here is a full breakdown:

1 Who needs a foreign worker bond and what documents are required

The bond is mandatory for all non-Malaysian Work Permit holders across the construction, marine, process, manufacturing, and services sectors. Before purchasing, have the following ready:

• In-Principal Approval (IPA) letter issued by MOM
• The Foreign Identification Number (FIN), which can be found on the in-principal approval letter
• Your company's Unique Entity Number (UEN) and SSIC/Activities code, alongside your company name
• CPF Submission Number, as stated in the IPA or MOM renewal notice

2 When to buy and register the foreign worker bond

Complete the purchase before foreign manpower enters Singapore. The insurance provider must submit the bond details to the government at least three working days before the security bond's effective date. This transmission takes up to three working days to process:

• The effective date cannot be backdated under any circumstances
• If the bond is not active when your worker arrives, the immigration officer will deny their entry. In this case, you must send the worker home immediately.
• Log in to WP Online after submission to verify the bond status and print the MOM acknowledgement letter and send it to your employee

3 Guarantee sum and bond period

The amount and duration are standardised by MOM. The table below shows what hirers can expect when purchasing through an approved insurer:

5 Foreign worker medical insurance coverage requirements

Alongside the security bond, employers must purchase Foreign Worker Medical Insurance (FWMI) for every Work Permit and S-Pass holder. The mandatory minimum requirements are:

• Annual medical insurance of at least S$ 60,000 per worker for policies with a start date on or after 1 July 2023
• Must include inpatient hospitalisation and day-surgery expenses for non-work-related illnesses and injuries
• For claims exceeding S$ 15,000, the insurer covers 75% of the claim, and the hiring company contributes 25% as a co-payment
• Employers may arrange for workers (excluding migrant domestic workers) to co-pay up to 10% of their fixed monthly salary, subject to conditions in the employment contract

Employers can also add optional riders to cover specific needs, such as a co-payment waiver, repatriation of mortal remains, and outpatient treatment. Many companies may provide comprehensive plans with competitive rates.

6 Registration and renewal of medical insurance for foreign workers

You must submit medical insurance details to MOM before you can issue or renew a Work Permit. Use this checklist to stay on top of it:

• Purchase FWMI from a MOM-approved insurer before the worker's arrival
• Ensure your insurer submits the policy information to MOM promptly — a reliable broker can do this within the day
• Log in to WP Online to verify that insurance policy contents are reflected correctly
• Track your policy expiry date against your worker's permit expiry date
• Renew in advance to avoid any lapse in coverage that could affect the Work Permit renewal
• Keep all policy documents and MOM acknowledgements on file for compliance records

7 Other compliance obligations

Beyond the bond and medical insurance, employers must also maintain Work Injury Compensation (WIC) insurance for all manual workers and non-manual workers earning S$ 2,600 or less per month. Note that WIC covers work-related injuries, while FWMI covers non-work-related illnesses — they are not interchangeable.

Additional employer duties under MOM include:

• Notifying MOM promptly if a worker goes missing
• Maintaining accurate salary payment records
• Repatriating workers when their permit expires or is cancelled
• Keeping all bond and insurance documents on file for audits or disputes

Premiums for a foreign worker bond are relatively standardised — expect to pay in the range of S$ 80 for a 14-month bond and S$ 100 for a 26-month bond with most approved insurers. However, price alone should not drive your decision. When evaluating providers, consider the following:

• MOM submission speed: Some insurers and brokers provide security bond details to MOM within the same day, which matters if your workers are arriving soon. You can track your submissions with the CPF submission number.
• Financial assessment waivers: Look for providers that waive guarantor underwriting requirements, simplifying the application process
• Bundling options: Providers that offer both the security bond and FWMI together can reduce administrative overhead
• Number of workers covered: Check per-company limits, as some insurers cap coverage at 30 helpers per registered entity
• Co-payment waiver riders: If you want to eliminate the 25% employer co-payment on medical claims above S$ 15,000, confirm the insurer offers this as an add-on

A dedicated broker can also help ensure your documents are submitted accurately and on time, reducing the risk of compliance gaps.