Ever wondered if one can own a business with only a dependent pass in Singapore? With the country having business-positive laws that encourage new businesses to bloom and grow, even dependent pass holders can own and grow their dream business!
Singapore is a top choice for entrepreneurs and business owners, with a thriving economy, stable political system, and supportive business environment. As a result, many foreign entrepreneurs often flock to the country to start a business. However, if you are a Dependent Pass holder who arrived in Singapore due to your spouse or parents’ work pass and not an entrepreneur with a pre-existing business, is it still possible to start your own business here?
What is a Dependent Pass?
A Dependent Pass (DP) is a type of immigration visa issued to eligible family members of Employment Pass, S Pass holders, EntrePass holders, or Personalized Employment Pass (PEP) holders. This pass allows these individuals to reside in Singapore and take advantage of the city-state’s many benefits.
To become a dependent pass holder in Singapore, the primary pass holder must meet specific requirements first. It includes the following:
- Being a Singapore Citizen, Permanent Resident, or holder of an Employment Pass, S Pass, or Work Permit.
- The primary pass holder must earn a minimum fixed monthly salary of SGD 6,000. The dependent pass applicant must be the spouse, common-law spouse, unmarried child under 21 years of age, or an unmarried handicapped child over 21 years of age.
- The dependant must be able to provide proof of financial support.
What is a Letter of Consent (LOC)
Any dependent pass holder in Singapore, who plans to become a legitimate business owner, must secure a Letter of Consent (LOC). The LOC is a document issued by the Ministry of Manpower (MOM) in Singapore that allows a dependent of a work pass holder to work in the country. The LOC permits the dependent to work in Singapore and is typically issued for a specific period and tied to one employer.
However, as of May 1, 2021, dependent pass holders in Singapore who wish to work or start a business will need an applicable work pass (such as an Employment Pass, S Pass, or Work Permit) unless they meet specific criteria as a business owner.
With this new framework, can one still start a business with a dependent pass? The answer is yes, so let’s discuss how to open a business in the next section.
How to start a business with a Dependent Pass?
If you are a dependent pass holder in Singapore and are interested in starting your own business, two options are available.
Option 1: Incorporate a Company and Apply for an Employment Pass
If you wish to start a business with a dependent pass, incorporating a company and applying for an Employment Pass (EP) is a viable option. By doing so, you can take advantage of the following benefits:
- Physical presence in Singapore: Being physically present in Singapore allows you to search for business opportunities or clients more quickly, which can be a significant advantage for your business.
- Corporate bank account: Incorporating a company and acquiring an EP enables you to open a company bank account, essential for injecting paid-up capital into your business.
Are you an entrepreneur already in the process of building your business? Here are some articles that might help you:
- 5 Advantages of Setting Up a PTE LTD Company in Singapore
- 4 Easy Steps to Change Your Company Name in Singapore
- 4 Basic Accounting Tips For Growing Your Business
Option 2: Incorporate a Company and Acquire a Letter of Consent (LOC)
This option suits DP holders who wish to start a business in Singapore as a team. To be eligible for a Letter of Consent (LOC) under this option, you must meet the criteria set by the Ministry of Manpower (MOM).
- To be eligible to apply for a LOC, the DP holder must be one of the following:
- The sole proprietor of an (Accounting and Corporate Regulatory Authority) ACRA-registered business.
- A partner of an ACRA-registered firm.
- A company director with at least 30% shareholding in an ACRA-registered business.
- Furthermore, to be eligible for a renewal of the LOC, the business must hire at least one Singaporean/Permanent Resident who:
- Earns at least the prevailing Local Qualifying Salary (SGD$1,400) and;
- Receives CPF contributions for at least three months.
Some of the benefits of incorporating a company under this option include the following:
- Shared Responsibility: By becoming part of a team, the DP holder can share the responsibilities and workload of running the business with others, making the process more manageable.
- Increased Capital: Incorporating a company allows for more capital into the business, providing a financial boost and helping the business grow faster.
- Access to More Resources: A company can have more resources at its disposal than a sole proprietorship, including access to a broader pool of talent, increased purchasing power, and improved access to financing.
- Legal Protection: Incorporating a company provides limited liability protection for the owners, meaning that their assets are protected in the event of business failure.
- Improved Credibility: Operating as a company can enhance the business’s credibility, making it easier to attract investors and customers.
Steps to Register a Business in Singapore under Option 2:
- Choose a business name and ensure it is available for registration with ACRA.
- Incorporate the company by filing the necessary documents with ACRA and obtain a Unique Entity Number (UEN). (List yourself as a local director and shareholder to meet the LOC eligibility criteria)
- Open a company bank account.
- Obtain the necessary licences and permits for business operations.
- Hire local employees and ensure that they meet the eligibility criteria for LOC.
- Apply for the LOC and submit all required documents to the MOM.
It may be better to outsource or avail of an incorporation package in Singapore for the registration, as the process can be complicated and time-consuming. To clearly understand the company registration process, you can check out Lanturn’s comprehensive guide to establishing a company in Singapore.
A professional incorporation service that can assist in the registration process guides the requirements and ensures the application is complete and accurate. It will help minimise the chances of rejection and ensure that the LOC is granted promptly.
Related Reference: Small Singapore Business Ideas
Launch with Lanturn
Do you feel overwhelmed by how you can start a business with a dependent pass in Singapore? Let Lanturn help you turn your entrepreneurial dreams into a reality! Our Launch with Lanturn program is designed to provide first-time entrepreneurs a cost-effective solution for incorporating their business in Singapore.
With over five years of experience and a track record of successfully helping over 500 companies with their business registration, you can trust the experts at Lanturn to handle all your incorporation needs. And with our focus on making the process as smooth as possible, you’ll have more time to focus on what’s essential – processing your Letter of Consent (LOC) and growing your business!
Here’s what you can expect with our comprehensive Launch program:
- Maximise your budget with affordable incorporation fees
- Worry-free preparation and maintenance of company registers
- A premium registered business address for a year
- One year of Lanturn’s expert corporate secretary services
Don’t let the complexities of company registration hold you back from starting your business in Singapore. With Lanturn, you can launch with confidence, knowing that we’ve got your back every step of the way.
Launch your dream with Lanturn!