Home-Based Businesses: Following the Urban Redevelopment Authority
While part-time work, zero-hour contracts, and independent contracting are fuelling today’s gig economy, building a home-based business is fast gaining traction in this new marketplace, too.
The idea of home-based business is not just a trend in Singapore, but it is becoming part of the new reality of the Singaporean workforce – to work from home. In fact, people find that it is possible to start almost any kind of business from home – from home-based bakery to freelance writer, though the investment amount and experience varies.
Setting Up a Home Based Business in Singapore
Running a home-based business, as the name implies, means doing business from the comfort of your home. Thanks to the cutting-edge technology, the human race has advanced into the era with high-speed internet and sophisticated devices and applications that have, in some ways, turned the idea of working from home into a practical and doable idea. According to the definition of Urban Redevelopment Authority of Singapore (“URA”), home-based business activities refer to small-scale businesses that are wholly owned and operated by the homeowners.
The Dos and Dons of Starting a Home Based Business in Singapore
In Singapore, running home-based businesses does not mean you are spared from certain rules and regulations. In fact, the URA has issued a laundry list of HDB’s rules that stipulates the dos and dons when setting up a home based business in your neighbourhood.
Condos are not your business premises
Home-based businesses should not have any material impact on the use and function of the residential unit including zero nuisances to the residents in the neighbourhood – that means you cannot turn your home into the commercial kitchen even though you have mad skills in cooking. In relation to this rule, you are not allowed to use the Condo for business registration. Also, you cannot do the following:
- display any external advertisement/business signboard
- turn the residential unit into a physical shop of your business
- run a business that will create unwanted noise, smells, smoke, waste or dust that may disturb the residents
- run a business that will bring in excessive foot traffic to the Condo.
Simply put, you are allowed to run your small-scaled business from the comfort of your home. However, you cannot turn your residential unit into a business premise.
You must not employ anyone to run your business
This requirement basically rules out all possibilities of hiring extra staff for your home based business. If your business has expanded to the point where you need more hands, you need to comply with the 2-person rule – the guidelines only allow up to 2 non-residents.
The 3-student rule for tutor service
This rule defines an end to the possibility of turning your home into a tuition centre. You are allowed to give tutor services but the numbers of students are limited to only three students at a time.
Blanket ban on massage services
URA has given green lights to residents to run hairdressing, manicure/pedicure, and other beauty services as their home-based business. However, massage services are not part of the list, regardless of its scale (big or small). This is to prevent the notorious prostitution activities and other sexual services in HDB flats.
Understand the nature of your business (the list of prohibited and permitted businesses)
There are many strict rules that have drawn the line between home-based businesses and brick-and-mortar physical shops. Having said that, there are still many opportunities in home-based business. For example, the guidelines encourage home-based business related to office work using a computer, sewing work, and freelance jobs without business activities.
Meet the requirements
If you’re planning to start a home-based business at your Condo, you must meet the following requirements:
- You must be 18 years of age, or older
- You must be either the owner, or tenant, or authorised occupier or sub-tenant of the Condo
Register with the ACRA
Register your company with the Accounting and Corporate Regulatory Authority (“ACRA”) if you want to run a business at your Condo as one of the following:
- Private Company Incorporation
- Limited Liability Partnership
Must meet all safety requirements
Home-based businesses must still follow a set of safety requirements. For an example, in order to mitigate the fire risk at Condo, the Fire Safety and Shelter Department (“FFSD”) mandates business owner to install:
- A single-station smoke detector
- A 2kg ABC Dry Chemical Powder fire extinguisher
Obtain a Home Office Scheme License
While you have the green light to run a business at your Condo, you must obtain a Home Office Scheme License as part of the statutory requirement. The validity of the license is 5 years at a cost of $20. Please note that you must have a SingPass as well as a method of payment prepared when submitting an application for the license.
Chai Chung Hoong, Account Manager
Chai Chung Hoong will assist you in all accounting related services, and help your company in digital transformation.Contact Us