DP Holder Business FAQs

Starting a business as a Dependant’s Pass holder raises practical questions that do not end when the company is registered. These FAQs focus on what happens around the business-owner Letter of Consent (LOC), where you can operate, hiring, tax, banking and keeping the business compliant.

Do I need a physical office?

Not necessarily. A Singapore company needs a registered office address, but the registered office and the place where the business actually operates can be different.

A professional consultancy or digital business may not need a traditional office. A business involving customers, food, stock, equipment, employees or regulated services may have premises and licensing requirements.

Before committing to a location, check:

• Whether the activity is allowed at that address.
• The lease, landlord and building-management conditions.
• HDB or URA rules if the address is residential.
• Storage, signage, customer-visit and fire-safety requirements.
• Any sector licence or inspection conditions.

Can a DP holder work from home?

Potentially, but two questions must be answered. First, does the DP holder have MOM’s permission to operate the business? For an eligible business owner, that is addressed through the LOC. Second, can that particular activity lawfully operate from the home?

An LOC does not automatically approve residential premises. Check the current home-business rules and any HDB, URA, tenancy, licence or sector restrictions that apply to the activity.

Can the business hire employees?

Yes, subject to Singapore’s employment rules. For Singapore citizens and permanent residents, the employer should understand written employment terms, payroll, leave, tax reporting and CPF obligations before the first salary payment.

An employer generally needs a CPF Submission Number to make CPF contributions. The exact contribution treatment depends on the worker and circumstances, so use the CPF Board’s current guidance.

Hiring a foreign employee is a separate process. Work-pass eligibility, salary criteria, quotas, levies, insurance and advertising requirements can differ by pass, role and sector. The business-owner LOC does not authorise another foreign worker.

What must I do to renew the LOC?

MOM currently says a business-owner LOC renewal requires at least three months’ validity remaining on the DP. The business must also have hired at least one Singapore citizen or permanent resident who:

• Earns at least the prevailing Local Qualifying Salary.
• Has received CPF contributions for at least three consecutive months immediately before the renewal application.

Plan this well before the LOC expires. Recruiting someone shortly before renewal may not leave enough time to complete three consecutive months of CPF contributions.

What is the Local Qualifying Salary?

The Local Qualifying Salary (LQS) is a MOM salary benchmark used in several foreign-workforce and local-employment rules. MOM may revise the amount, including the hourly figure relevant to part-time local employees.

Check MOM’s current LQS page when planning recruitment and again before renewal. Do not build the renewal plan around an amount copied from an older article or service provider.

How long is the first LOC valid?

MOM currently states that a first-time business-owner LOC is valid for whichever is shorter: one year from the date of issue or the remaining validity of the DP.

A subsequent renewal may be issued up to the DP’s expiry date. The LOC stops being valid if the DP is cancelled or expires, or if the business is no longer active. If the business ceases, MOM says the LOC should still be cancelled.

What if the business is not making much money yet?

A young business may take time to become profitable. What matters operationally is that it is a genuine business with accurate records, real activity and a credible plan—not an entity created only to obtain work permission.

Keep evidence such as:

• Customer enquiries, proposals and contracts.
• Invoices, payments and refunds.
• Marketing activity and business correspondence.
• Business expenses and bank statements.
• Accounting records and tax filings.
• Licences, insurance and supplier agreements where applicable.

Low revenue does not remove filing, record-keeping or renewal requirements. If the business cannot meet the local-hire condition for LOC renewal, seek advice early instead of assuming MOM will waive it.

How is the business taxed?

Tax depends on the legal structure. A sole proprietor generally reports business income as individual income, while a company has its own corporate tax obligations.

Singapore’s headline corporate income-tax rate is currently 17% of chargeable income. That is not 17% of revenue. Allowable expenses, exemptions, rebates and other adjustments affect chargeable income, and qualifying new companies may be eligible for start-up tax exemptions subject to IRAS conditions.

Keep complete records from the first transaction and confirm the correct treatment with IRAS or a qualified tax professional when expenses, overseas income, related parties or other complex issues are involved.

When does GST become relevant?

Compulsory GST registration is based on taxable-turnover tests set by IRAS, including retrospective and prospective tests. These rules contain definitions, time periods and exceptions, so monitor turnover and review the current IRAS guidance rather than relying on a single headline number.

Voluntary registration may be possible, but it creates continuing obligations. Consider pricing, customers, input tax, invoicing, systems and filing costs before applying.

Do I need a business bank account?

A private limited company should keep company money separate from personal money and use a dedicated corporate account. This supports clean records, controls and tax reporting.

Bank approval is separate from ACRA registration. A bank may request company documents, shareholder and director information, the source of funds, expected transactions, customer or supplier information and evidence of the intended business.

For a sole proprietorship, a separate business account is still good practice even though the business is not a separate legal entity.

What ongoing compliance does a private limited company have?

Incorporation is the beginning, not the end, of compliance. Depending on the company and its circumstances, ongoing work can include:

• Maintaining accounting and corporate records.
• Appointing a company secretary within the required period.
• Maintaining the registered office and statutory registers.
• Filing annual returns with ACRA.
• Filing corporate tax returns and Estimated Chargeable Income where required.
• Meeting audit requirements or confirming an available exemption.
• Updating ACRA when officers, addresses or other registered information change.

A company secretary, accountant or CSP can perform agreed work, but directors remain responsible for ensuring the company meets its obligations.

Can I continue looking for a job?

Yes, but a business-owner LOC is not a general-purpose work pass. It relates to operating the qualifying business.

If a DP holder accepts employment with another company, that employer must assess and obtain the appropriate work authorisation, such as an Employment Pass or S Pass where applicable. Do not assume the business-owner LOC covers outside employment.

What types of businesses could suit a DP holder?

Start with skills and customer demand rather than a long list of fashionable ideas. Examples may include consulting, technology services, design, marketing, content, training, e-commerce or other professional services, subject to licensing and professional rules.

A useful test is: Do I have a skill or product, can I identify who will pay for it, and can I demonstrate demand without committing large amounts of money first?

Regulated work requires extra care. Accounting, financial, healthcare, education, employment, property, travel, food and other activities may need licences, qualified personnel or specific premises.

What if I do not have a business idea yet?

Do not begin with incorporation. Begin with validation.

• Define the customer and the problem.
• Speak to potential customers.
• Check what alternatives they currently use.
• Test the offer and pricing.
• Estimate the true delivery cost.
• Try to identify the first three realistic customers.

Validation cannot guarantee success, but it can prevent spending on a company, stock, premises or branding before learning that demand is weak.

Is EntrePass another option?

EntrePass is a separate work-pass route for eligible foreign entrepreneurs with businesses that meet MOM’s venture-backed or innovative-technology criteria. It is not a general alternative for every consultancy, online shop or freelance-style business.

Someone building a qualifying innovation-led company may investigate EntrePass separately. The eligibility requirements should be assessed on their own facts rather than treated as a backup LOC.

A practical five-phase plan

Phase 1: Validate

Define the offer, customer and price. Speak to potential buyers and test demand.

Phase 2: Set up

Choose the structure, ownership and activities. Confirm director, address, CSP and licence requirements, then register with ACRA.

Phase 3: Obtain permission

Check DP validity, submit the MOM business-owner LOC request and wait for approval before operating.

Phase 4: Launch properly

Set up banking, bookkeeping, contracts, licences, insurance, invoicing and any employment processes.

Phase 5: Prepare for renewal

Track the LOC and DP expiry dates. Plan the qualifying local hire, salary and three consecutive months of CPF contributions early.

The bottom line

A DP holder can build a genuine business in Singapore, but business registration, permission to operate, premises approval, tax and licensing remain separate responsibilities. Use official guidance, keep good records and plan for LOC renewal from the beginning.

Important: DesiNewz is an information platform, not an immigration, tax or legal adviser. For an individual case, particularly where immigration status, regulated professions, tax or licensing is involved, confirm the position with MOM/ACRA/IRAS or a qualified professional.