A Singapore’s Dependent Pass (DP) is a visa that allows the eligible family members of Employment Pass, S Pass and other approved work pass holders to legally live in Singapore. Singapore is widely regarded as one of the most business friendly countries in the world, attracting entrepreneurs, investors, and professionals from across the globe. Many expatriates living in Singapore on employment related passes may also bring their families into the country under a DP. In a country governed by strict laws, DP holders may fear starting a business due to a lack of knowledge surrounding the relevant laws.
The simple answer to the question at hand is yes, but there are specific rules imposed by the Ministry of Manpower (MOM) that DP holders must comply with before they can actively operate a business. Understanding these regulations is crucial to avoid breaking any immigration or employment laws while pursuing such entrepreneurial opportunities.
There are generally no restrictions preventing a DP holder from becoming a shareholder or even a director of a company, provided the company complies with Singapore’s corporate regulations under the Accounting and Corporate Regulatory Authority (ACRA).
A DP holder who wishes to actively operate, manage, or work for the company will generally require proper work authorisation from MOM.
There are two common ways to go about doing so:
1. Applying for a Letter of Consent (LOC)
A Letter of Consent (LOC) is an authorization issued by MOM. It allows eligible DP holders (who are business owners) to legally work or operate a business in Singapore without needing to apply for a separate work visa.
Based on our review of the MOM website, it states that you will need to be one of the following types of business owner of an ACRA registered business in order to be eligible for a LOC:
1. Sole proprietor
2. Partner
3. Company director with at least 30% shareholding in the company or member in the Company Limited By Guarantee
Additionally, if you already have a LOC and would like to renew it, you will need to have at least 3 months validity remaining on your DP and have hired at least 1 Singaporean or Permanent Resident who is paid at least the current Local Qualifying Salary requirement and has been receiving CPF contributions for at least 3 consecutive months prior to the application submission date.
You should also note that the LOC loses its validity when the Dependent Pass is cancelled or expires. It also stops being valid when the business is no longer active.
2. Obtaining an Employment Pass
You may also choose to apply for an Employment Pass through your own company. If approved, the individual’s immigration status would typically shift from a Dependent Pass to an Employment Pass holder.
To qualify, the company must satisfy MOM’s requirements, including:
1. Paying the minimum qualifying salary;
2. Demonstrating that the business is genuine and operational; and
3. Meeting prevailing work pass criteria.
Additionally, before starting a business in Singapore as a DP holder, there are several other legal considerations that should be kept in mind:
1. Compliance with Immigration laws
Running a business without proper work authorisation may breach Singapore’s immigration and employment regulations. DP holders should ensure they obtain the necessary approvals before undertaking operational duties.
2. Corporate Governance Requirements
Singapore companies must comply with statutory obligations such as maintaining proper accounting records, filing annual returns, and meeting tax requirements with the Inland Revenue Authority of Singapore (IRAS).
3. Long term business planning
Conclusion
Singapore remains an attractive destination for entrepreneurship, and with proper planning and compliance, DP holders can successfully establish and grow businesses within the country’s regulatory framework. Understanding the distinction between ownership and active employment is crucial in navigating the process smoothly and legally.
If you are considering starting a business, seeking professional advice can help prevent any legal implications and ensure your business is smooth sailing. Contact us today for expert assistance tailored to your unique circumstances. We will be able to assist with expat business incorporation, advising on tax and compliance matters and corporate advisory etc.
Disclaimer: This article provides general information and does not constitute legal advice. Please seek professional advice for your specific situation.
Do reach out to us at Legal Expat if you require professional advice. We have a team of qualified lawyers that can assist you. Email us at: info@legalexpat.sg or drop us a WhatsApp at: +65 8093 4393 if you require assistance.