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How can someone on a Dependant’s Pass set up their business in Singapore?

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Are you currently on a Dependant’s Pass (DP) and considering setting up your own company in Singapore? If you are, the great news is that Singapore has made it easier than ever to get started with your own business. 

This article will cover the most common paths and issues when starting a small business on a DP.

Overview

Setting up your business in Singapore will typically take two steps:

 

1) incorporating your company and then

2) getting an EP or an LOC.

Starting a private limited company

When you set up a private limited company (Pte Ltd), this means that you are creating a separate legal entity from yourself.  It limits your liability as an individual – this means that if your company turns to custard, any debts or losses you incur while running your business will not impact any personal assets (such as your house) that you may own.  Here’s a quick rundown of a private limited company in Singapore:

Main features of a Pte Ltd

  • Has its own legal identity that is separate from its shareholders and directors
  • Allowed to bring in new shareholders if you grow
  • Easy to transfer ownership
  • Shareholders are not directly liable for debts and losses
  • Your company’s profits are taxed at corporate tax rates
  • Eligible for local tax exemptions and incentives

Requirements to register your company in Singapore

Here’s what you need to incorporate your company in Singapore:

  • One resident director: Director needs to be living in Singapore and is either a Singapore citizen, permanent resident or on an EP*
  • One shareholder: A director can be a shareholder, and a shareholder can either be an individual or a corporate
  • One company secretary: Within 6 months of incorporation, every company must appoint a company secretary. A company secretary has to be a citizen, permanent resident or on an EP
  • Paid-up capital: The minimum paid-up/share capital for a company to register in Singapore is S$1 (but you may need more if you are applying for an EP)
  • A registered address in Singapore: this is where you will receive all official documents pertaining to your company

*EP Holders can be appointed Directors of the Company they are working for or with a Letter of Consent for secondary directorship. Please note however that Letters of Consent for secondary directorship are only granted in specific cases.

Work visas

Once you have incorporated your company, if you are on a DP you can either work for your company via an Employment Pass or a Letter of Consent.  Both have different application requirements.

Letter of Consent (LOC)

One of the ways you can work for a company in Singapore if you are on a DP is by obtaining a Letter of Consent from the Ministry of Manpower. The application is made by the company that will be the employer – in this instance, it can be the company that you have incorporated, making you an “employee” of the company.  The benefit of the LOC is that there is no minimum salary requirement (unlike the EP).

 

Here’s what the process looks like:

  • Incorporate your company - you will need a Singapore citizen, permanent resident, or employment pass holder, or a nominee director, to act as your ‘local director’ and a shareholder
  • Open a bank account and transfer the paid-up share capital for your company
  • Submit your LOC application

Your DP will need to be valid for at least 3 months. The Ministry of Manpower takes around 3-5 weeks to issue an outcome. (Need more answers on the LOC? Click here.)

Employment Pass

If you do not want to be ‘just’ an employee but also a director of your company, you would need to apply for an Employment Pass (EP) after you have incorporated. By doing so, you would not need a nominee director. Find out how you can go about getting an EP in Singapore here.

Nominee director

As mentioned above, if you choose to open your business and then remain on a DP and LOC combination (instead of an EP),  you would then need to arrange for a friend who is ‘locally resident’, or a nominee director service for your company. A nominee director holds the director’s position but does not hold any powers or authority.

 

(Looking for someone to be your company’s nominee director? We can help you.)

Next steps

If you’re ready to take your business from dream to reality, we can help you make it happen. Get tailored, practical advice from us about your situation – get in touch with us today.

We help entrepreneurs streamline their company incorporation, governance, and accounting using clever technology.

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