The Singapore government has shown openness to the foreigners living in the State as Dependent Pass (DP) holders by allowing them to study, work, own shares, and even start their own businesses adding to the state’s economic growth.
However, they need to fulfil the basic eligibility criteria of being an unmarried child under 21 years of age or a legally married spouse of an Employment Pass (EP) or S Pass holder earning a minimum fixed monthly salary of SGD 6000, sponsored by the employer.
This article answers how dependent pass holders can start a business in Singapore explaining the eligibility, requirements, and step-by-step process to help dependents frame an informed business strategy.
Understanding The Dependent Pass In Singapore
A Dependent’s Pass (DP) is a type of visa issued by the Ministry of Manpower, Singapore (MOM), to the spouses and children of eligible Employment Pass (EP) or S Pass holders in Singapore, allowing them to legally reside in the country upon fulfilling certain eligibility criteria.
It allows dependents under other work passes also such as Entre Pass and Personalised Employment Pass (PEP) under different eligibility criterias.
How Can A Dependent Pass Holder Start A Business In Singapore?
The Ministry of Manpower (MOM) regulates the DP holders’ entrepreneurial activities in the State.
DP holders who wish to work in Singapore must get an Employment Pass, S Pass, or a Work Permit, provided their prospective Employer applies for the same adhering to the qualifying salaries, quotas, and levies of the respective work passes.
DP holders wishing to start a business in Singapore must apply for a Letter of Consent for DP holders who are business owners (LOC) to MOM after registering their business with the Accounting and Regulatory Authority of Singapore (ACRA).
Eligibility Criteria For Letter Of Consent
He must be a Sole Proprietor or Partner in a business registered with ACRA, OR
A Director holding at least 30% shareholding in the Company registered with ACRA.
Updated business turnover information and a valid DP of at least 3 months at the time of applying for LOC and its renewal.
Procedure For Getting A Letter of Consent (LOC)
Submit an Online Request to apply for an LOC
Submit an online request to apply for an LOC through MOM’s official website by filling in basic details such as the company’s registration number (UEN), business activities, details of the business owner, etc.
Submit the Application
If your request is approved, you can either assign an employment agent to apply on your behalf or submit the application yourself via EP eService on myMOM Portal.
Track your application
You can check your application status online on the website itself at only after 3 weeks and submit the additional documents if required.
You will need to submit the documents > Work Passes > Choose the application record > Submit documents. Alternatively, select ‘View details’ to see the action required from you.
Receive Approval
You will be intimated through email and once approved, the LOC will be issued, allowing the DP holder to legally operate the business.
Renewal of the LOC
You can renew your LOC via MOM’s EP eService portal. The same can be done along with the renewal of DP but up to 6 months before your LOC expires. However, you will need to fulfill the key conditions for LOC renewal such as hiring at least one Singaporean / local resident at a minimum of prevailing Local Qualifying Salary (LQS), providing him 3 month CPF contribution prior to LOC application, etc.
Duration of the LOC
- The LOC is generally issued for 1 year for first-time applicants. However, if the validity duration of DP is less than a year at the time of issuance of LOC, it is issued for such a lesser period.
- Upon renewal, the LOC will be valid for up to the expiry date of the Dependant’s Pass. This means the LOC will match the remaining validity of the DP, ensuring continued alignment between the work authorization (LOC) and the dependent status (DP).
Replace Or Cancel An LOC
The MOM allows you to report the loss of the LOC and request its replacement via its official website.
Further, if you wish to cancel your LOC, you can do the same up to 14 days in advance and within 1 week after the business is no longer active.
Step-By-Step Process To Start A Business As A Dependent Pass Holder
To start a business in Singapore one needs to conduct thorough market research to assess scope and demand, competition, and regulatory requirements in the chosen industry. You can simply refer to our ultimate guide on ‘How To Start A Business In Singapore’ to get the complete detailed process right from the planning stage to registration with ACRA and post-registration compliances.
Being a DP holder, you just additionally need a Letter of Consent (LOC) from the MOM. Follow the following steps:
Pre-incorporation steps to establish business
Take all the essential steps involved in making a business like choosing an appropriate idea and business structure, and finding an office space.
Register the Business with ACRA
Register your business as a Sole proprietorship or a Partnership firm or as a Private Limited Company with ACRA.
Fulfill Regulatory Obligations
Ensure compliance with Singapore’s statutory requirements such as appointing at least one local director, filing annual returns and maintaining proper accounting records, and adhering to sector-specific licensing requirements if applicable (e.g., food and beverage, healthcare).
Apply for a Letter of Consent (LOC)
Fulfill the eligibility criteria to apply for an LOC, follow the steps outlined above to secure MOM’s approval to legally operate your business.
Conclusion
While the DP primarily serves as a residence pass, it also provides avenues for holders to contribute to Singapore’s economy, including through employment or entrepreneurship.
However, starting a business as a DP holder involves specific regulations and requirements that must be adhered to and is contingent on receiving an LOC from MOM.
Therefore, careful and strategic planning is required before starting your business in singapore.
Alternatively, partnering with a corporate solution provider can ease the process while limiting the risks associated. Hire 3E Accounting Services TODAY to free yourself from the hassle of compliance requirements. We will handle everything for you right from getting a Dependent’s Pass for you, name reservation of your business, its registration, LOC application, regulatory compliances and even assisting you in your core business.
Disclaimer: This blog is for informational purposes only and does not constitute any legal advice.
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Contact us now!Frequently Asked Questions
Yes, a DP holder can start a business in Singapore by applying for a Letter of Consent (LOC) from the Ministry of Manpower (MOM) provided he fulfills the required eligibility criteria.
Yes, DP holders must obtain an LOC to legally operate a business in Singapore.
The DP holder must be a sole proprietor or a partner or Director in the Company holding at least 30% of the company’s shares. Such businesses must be registered with ACRA. Additionally, the DP must be valid for at least 3 months at the time of application.
The validity of the LOC is tied to the expiry date of the DP. For first time LOC is issued for a year or duration of DP, whichever is lesser and renewed for a period equal to validity duration of DP to ensure alignment between the work authorization (LOC) and the dependent status (DP).
Yes, the Singapore Government allows the legally adopted children of EP or S Pass holders provided they are unmarried children and under 21 years of age.
The MOM usually takes a week to respond. After approval you can either assign an employment agent to apply on your behalf or submit the application yourself via EP eService on myMOM Portal.
The MOM issues the LOC without charging any fee and generally takes around 4 weeks to process for most cases.
