Foreign Worker Bonds
The requirement for foreign worker bonds is governed under the Employment of Foreign Manpower Act.
What are Foreign Worker Bonds (“FWB”), Security Bonds and Immigration Bonds (sometimes used interchangeably) for?
FWBs are financial guarantees that employers must furnish to the Ministry of Manpower (“MOM”) when hiring non-Malaysian foreign workers for the purpose of ensuring compliance to regulations and conditions stipulated by MOM such as proper housing, timely payment of salaries and repatriation of workers.
Q: Why purchase FWBs from us?
We work with a strong network of insurers who have the capabilities to issue FWBs without requiring cash collateral which means that you do not need to place cash deposits upfront.
The Ministry of Manpower requires a S$5,000 security bond per non-Malaysian work permit holder, issued in the form of a banker’s or insurer’s guarantee.
A banker’s guarantee from banking institutions will impact borrowing lines where insurance bonds are perfectly acceptable substitutes.
Q: How are FWB premiums determined?
The FWB premium is determined based on:
The financial strength, and reputation of the company and its directors/owners/shareholders.
Q: What information is required?
- Latest company ACRA profile (registry of business details);
- Latest unaudited/audited financial report of the company;
- Estimated number of workers required for FWB;
- Notice of Assessment (NOA) of the director(s), where required.
Q: Why is it that workers injury compensation insurance (WICA), foreign worker medical insurance (FWMI) and Public Liability insurance do not require any provision of company’s audited reports but is required in FWB?
FWB is a financial guarantee where the issuer of the guarantee/bonds would need to assess the financial / credit standing before it stands as surety for your company.
WICA, FWMI, and Public Liability whereby the focus are on your operational track record (past record and loss history) and industry trends but also your coverage needs.
Q: Will the pre-approved headcount be unlimited?
No, the pre-approved headcount is typically limited to a specified number as agreed upon with the insurer.
Any uplift in limit will have to be negotiated.
Q: Can we request a quote for 35 workers without reviewing any company report?
No, as previously shared, the company’s audited financial report is essential to obtain accurate quotes.
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