How Can a Dependent Passholder Establish a Business in Singapore?
Singapore offers a wide range of opportunities for you to build your skills, advance your career and improve your quality of life. It is also easy for your spouse with a dependent pass (DP) to start their own business or set up a company in Singapore. Are you a dependent pass holder (DP) seeking to start your business in Singapore? You have come to the right place. Read on as we take you through the requirements for establishing a business in Singapore.
Set Up Your Business
As a Dependent Passholder, setting up your own business in Singapore is not difficult and will involve these steps.
- Incorporate your business
- Open a bank account
- Apply for a Letter of Consent (LOC) or apply for an Employment Pass (EP)
How About Establishing a Private Limited Company?
If you want to run a flourishing business without risking your assets, a Private Limited Company would be the best choice for you. Thus, it limits your liability as an individual. Suppose your company incurs a loss, your assets such as your house and other properties will not be impacted.
- Here are the key features of a Private Limited Company in Singapore:
- It has a legal entity of its own separate from its owners and shareholders
- Shareholders are not liable for debts incurred by the Pte Ltd Company
- As the company grows, you will be permitted to get in new investors and shareholders
- Ease in the transfer of ownership without complex documentation process
- Income is taxed at the corporate level and the dividends received by shareholders will not be taxed again
- Eligible to receive local incentives and exemptions
How Can You Register Your Company in Singapore?
It is easy to register a company in Singapore. The following are the guidelines for registration:
- You will need a resident director who is a Singaporean citizen or a permanent resident living in Singapore
- Your business needs to provide a registered address wherein you will receive all the important documents
- Your company will require a corporate secretary who will liaise with the government on behalf of your company
- You will need at least one shareholder who can either be a corporate or a person. This shareholder can be a Singaporean or a foreigner.
- You will just require $1 as a minimum paid-up capital to register your company
Roadblocks for a DP Holder in Establishing a Company
While there are many opportunities for a DP holder, there are also some restrictions on setting up their own company. As a DP Holder, you can neither be listed as a shareholder nor as a director at the time of your company’s incorporation. You can only be included as an employee of the company after the company has been registered, a corporate account has been opened and your Letter of Consent (LOC) has been approved by the MOM. You will also need the LOC to approve you as a director if you want to be a director of your company.
Do You Need a LOC or an Employment Pass?
After incorporation, you may need to apply for a Letter of Consent (LOC) or an Employment Pass (EP). Whether you need a LOC or an EP, we at Jaanik, will make your process smooth and work with you in procuring them for you.
Letter of Consent (LOC)
The LOC has no minimum salary requirement. If you seek to work with a LOC, your application will be made by the company that you have established. This company will act as your ‘employer’, thus making you an ‘employee’ of the company.
Employment Pass Visa
After you establish your company and open your corporate account, you can apply for an EP. Apart from gaining the freedom of being an EP holder, you have another advantage here. You do not have to appoint a nominee director and you will be eligible to be your resident director.
Do You Have the Option of Sole Proprietorship?
A sole proprietorship will give you all the business freedom you crave for. Your business will not be a separate entity from the person and you can run the business the way you want to. Also, the sole proprietorship is economical and flexible. The DP holders were able to start their own business as sole proprietors and procure their LOC before May 2016. However, now, the catch is that the MOM has modified its rules since 2016. It states that the LOC will only be considered and approved for employment with Singaporean employers. Therefore, now a Singaporean or a Permanent Resident (PR) will be the sole proprietor and will be able to apply for a LOC for the DP holder.
The changing rules and regulations may cause some confusion. Therefore, you need to keep yourself updated and understand the process. This is where we come in. At Jaanik, our professionals will do the work for you, guide you in each stage and provide you with customized, practical advice to start your business. Contact us now for more information.