A dependant pass (DP) is a pass for spouse and children of work pass holders (Employment Pass (EP), S Pass, PEP etc.) to relocate and live in Singapore together. Previously, they are also given the opportunity to work in Singapore via Letter of Consent (LOC). This automatically gives them the opportunity to also start up their own business without the need to be an Employment Pass holder.
However, those are no longer valid effective from 1st May, 2021. For those who wish to continue working in Singapore, the employing Company must apply a valid work pass for the employee.
For Dependant Pass (DP) holders who have the intention to start a business, there are two options available:
For existing Letter of Consent (LOC) Dependant Pass (DP) holders who are already business owners, you can maintain your letter of consent by employing local staff that earns at least SGD$1,400 and contribute CPF for the coming 3 months. This way, you are able to proceed with your LOC renewal application and sustain your business for the near future.
These recent changes signify MOM’s ongoing commitment to continue promoting the development of a strong Singaporean workforce as part of its Fair Consideration Framework.
Eligibility for the Letter of Consent (LOC)
In order for a Dependant Pass (DP) holder to qualify for LOC, you must meet the following conditions:
Either a sole proprietor/partner/Company director in ACRA registered business who owns at least 30% of shares in the Company
Company employs at least one (1) Singaporean / PR who earns at least SGD$ 1,400 (local qualifying salary) and receives CPF contribution for at least 3 months
A letter of consent (LOC) does not have a minimum qualifying salary for its holder. However, it is crucial for the Company to prove that it has the sufficient fund, active business as well as support local hiring within the Company before they are able to proceed with LOC application.
Highlight: For LOC new or renewal application, if the candidate failed to meet both the conditions stated, MOM will auto reject the application without further assessment.
Common misconception for LOC business owners
The DP holder is not able to be a sole director within a Singapore registered Company until the LOC is granted to them. In order for them to initiate the LOC application will be:
Incorporate a Singapore registered Company with a local nominee and DP holder act as foreign director
DP holder to own at least 30% of the shares within the Company
Employ local staff who earns at least SGD$ 1,400 and contribute CPF for the next 3 months
Once 3 months CPF statements are available, DP holder may initiate the LOC application with MOM
Once MOM has approved the LOC, DP holder may now become the sole director and shareholder within the Company and continue growing the business.
Tips: For new incorporation, if you managed to run your Company actively for the next year or two, instead of renewing the LOC, we suggest you opt for Employment Pass instead. The application for active Companies who hires local employees have higher chance in getting an Employment Pass compared to dormant or newly incorporated Companies.
I am an existing Letter of Consent (LOC) holder, how do I retain my LOC for as long as I can?
For DP holders who already have existing LOC and runs a business, maintaining your LOC is still one of the available options. You do not necessarily need to acquire Employment Pass (EP) to continue running your business.
The Ministry of Manpower (MOM) has specific conditions for you put in your LOC renewal application. They are:
A sole proprietor/partner/one of the Director of an ACRA registered Company with at least 30% of shares within the Company
The Company has at least one local Singapore or PR employee earning at least SGD$ 1,400 with CPF contribution for the recent 3 months
Angela is a dependant pass holder with a Letter of Consent attached. For the past 2 years, she has opened a hair salon Company based in Singapore. She is one of the directors as well as own 30% of shares within the Company.
In order for her to maintain holding a Letter of Consent, she must ensure the Company also hires local employee with a salary of at least SGD$1,400. Once the Company has contributed the CPF contribution for the local employee for at least 3 months, Angela may proceed to apply subsequent renewal of her LOC with MOM.
Steps to put in Letter of Consent (LOC) renewal application:
Employer or appointed third party agent to submit an online request to apply the LOC [New / Renewal application must submit this request as the first step]
Once application is made, MOM will need at least 1 week to assess the application made before an outcome is furnished via email to requester.
If the online request is approved by MOM, the requester is now allowed to proceed with putting in a new LOC application / renewal LOC application via EP Online.
Once application is submitted via EP Online, MOM will need another 1 to 3 weeks to assess the application made.
Once approved, the requester may retrieve the LOC confirmation letter via EP Online and the candidate can start working immediately after that.
Isn’t applying Employment Pass difficult?
Traditionally, DP holders opted for LOC instead of Employment Pass because of the rigid requirements and they are unable to furnish most of the potential documentation needed to support the application.
If you have an existing business
If your business has been operational for a few months to a year while you were on LOC, you definitely have the chance to boost for an EP approval. As an active company, you would be able to provide these:
Tax filing records with IRAS
Annual return filing records with ACRA
Proof of invoice issued to clients
Proof of payments made into company bank account
MOM can track the Company records such as tax filing and annual return filing via ACRA and IRAS directly. Then, since your Company has managed to secure and maintain contracts with your clients throughout the years, it will be a piece of cake to furnish them the proof of documentations needed.
If you wish to start your own new business
DP holders in Singapore who wish to start a new business have two prominent advantages in applying for an EP: