Starting a Home-Based Business in Singapore doesn’t have to be complicated
Just scroll through the news, and it’s clear: home-based businesses (HBB) are everywhere. Home kitchens are doubling as bakeries, spare rooms are turning into scent studios, and living rooms are becoming offices.
After all, these HBBs are a good way for budding entrepreneurs to dip their toes into business without heavy investment. Low overheads and startup costs make it an attractive option, not to mention the flexible hours it offers.
If you’re also looking to start up your own home-based business in Singapore, look no further. This guide provides a step-by-step guide on everything you need to know: what the schemes are, what rules apply, and tips for getting started.
Step 1: Identify your business scheme
First things first: you need to identify which category your business falls under.
Singapore has two main home business schemes: The Home-Based Business Scheme and the Home Office Scheme. The category your business belongs to determines whether you need a license to operate.
| Scheme | Type of Business | License Required? |
| Home-Based Business Scheme | Small-scale businesses that you can operate entirely from home without hiring external staff. Examples include: – Food businesses like bakeries – Hairdressing, facial and beauty, manicure, or pedicure services – Private tuition (for not more than three students at a time) – Sewing services – Work as a freelance artist, journalist, photographer or writer | No |
| Home Office Scheme | Small offices performing administrative, professional, or consultancy work with up to two non-resident employees. This includes those providing: – Accountancy services – Architectural services – Business/ engineering/ IT/ management/ education consultancy services – Insurance/ financial planning services – Real estate agencies – Technology-based and knowledge intensive businesses – Trading office | Yes: If you are operating from an HDB flat, you must register with HDB here. If you are in a private residential property, you must register with URA here. A small administrative fee of S$20 applies for either registration. If you are a tenant at the property, you must also obtain written consent from the property owner before registering your home-based business. |
Businesses not allowed under either scheme:
Certain business activities are generally prohibited from operating from home due to the potential for disruption, safety risks, or high foot traffic. Examples include:
- Retail outlets or stores with frequent customer visits
- Large-scale food production or catering operations
- Massage parlours or spas
- Car trading or repair workshops
- High-traffic service centres
- Animal-related businesses such as the keeping of animals for sale, pet grooming and boarding services
If your business falls under a non-permitted category, you can still, however, use your home as an administrative office, but you cannot operate the prohibited activities from the residential property. In this case, you will need to obtain a license from HDB/URA as your business belongs to the Home Office Scheme.
Step 2: Register your business with ACRA
Once you’ve identified your business category and obtained licenses from HDB/ URA (if needed), the next step is to register it with the Accounting and Corporate Regulatory Authority (ACRA). Proper registration ensures your business is legally recognised and allows you to operate officially.
All business registrations are done through ACRA’s BizFile portal. The online portal handles registrations for all business structures, from sole proprietorships to private limited companies, though at varying costs.
| Business Structure | Registration Fee |
| Sole proprietorship | S$115 for the first year, S$30 renewal fee for subsequent years |
| Partnership | S$115 for the first year, S$30 renewal fee for subsequent years |
| Limited Liability Partnership (LLP) | S$115 |
| Private Limited Company | S$315 |
Do note that in some cases, your business may be exempt from registration. For example, if you operate under your full legal name as shown on your NRIC, you do not need to register your business separately.
Once registered, you can open a business bank account, which allows you to invoice clients, receive payments and separate personal and business finances. Be sure to keep detailed records of all transactions, as these will be essential when filing taxes.
For home businesses that are exempt from registration, or those registered as a sole proprietorship, partnership, or limited liability partnership, business profits are considered personal income and should be reported under the “Business Income” section of your personal tax return.
Meanwhile, if your business is incorporated under the Companies Act or any other applicable law in Singapore, its profits are subject to corporate tax.
Record-keeping can also support claims for tax deductions and exemptions for certain business-related expenses, including utilities and internet costs attributable to business use, advertising expenses, as well as office supplies.
Step 3: Comply with scheme rules and restrictions
With your business registered and approvals in place, the next step is simple: start operating your home-based business. That said, it’s crucial to comply with rules to ensure your business remains legal.
In general, these are the restrictions your business needs to follow:
- The residence must still function primarily as a home. Business activity should remain secondary and must not physically transform the unit into a shop or studio.
- Activities should not cause disruptions for neighbours, including noise, odour, smoke, or excessive foot traffic.
- External signage, posters, or displays are not permitted. Promotion should be conducted online or through word of mouth.
If your business falls under the Home Office Scheme, there are extra rules on top of the general restrictions:
- CPF contributions for employees: For any Singapore citizen or permanent resident employees earning more than S$50 per month, CPF contributions are mandatory.
- Safety and compliance: Must meet basic fire safety standards and have functioning smoke detectors. Must comply with all planning and building regulations. Consumption of electricity and structural load must also not exceed the normal residential load.
If any of the scheme’s conditions are breached, the relevant authorities have the right to revoke approval for the use of the HDB flat as a home office. Continuing to operate the business after approval has been revoked may prompt HDB to take enforcement action to restore the flat’s use solely for residential purposes.
On top of these home business scheme rules, you will also need to consider the requirements specific to your industry. Different sectors may have additional regulations or licences that must be obtained before you can legally operate. Business owners should ensure they have all necessary approvals and paperwork in place to avoid compliance issues.
For instance, if you are running a home-based food business, you must comply with Singapore Food Agency (SFA) guidelines on hygiene and food safety, even if you are not required to apply for a full licence. Financial advisers, on the other hand, must be licensed and regulated by the Monetary Authority of Singapore under the Financial Advisers Act.
While it’s not possible to list every licence requirement here, there are useful resources you can leverage:
- The full list of licences from GoBusiness can help you identify what’s relevant for your business.
- GoBusiness e-Adviser offers an online tool to guide you through the licences and permits you may need based on your business type and sector.
Running your home-based business legally and efficiently
Setting up a home-based business in Singapore is an accessible way to pursue your entrepreneurial goals.
Understanding the available schemes, complying with licensing, and keeping up with tax obligations are key to running your business legally and efficiently.
And who knows—once your home-based venture takes off, it could grow beyond your living room and evolve into a full-fledged business.
If your business expands, such as generating high foot traffic or requiring more employees than permitted, you will need to relocate to a commercial unit. Make sure to complete this transition before authorities require it, and update your business information on BizFile+ as well as notify HDB or URA within 14 days of the move.
You can also consider a change in business structure as your venture grows. Many home-based business owners start off as sole proprietors or partners, but incorporating as a company or forming a Limited Liability Partnership (LLP) can provide limited liability protection, greater flexibility, and opportunities for further growth. You can do this via the ACRA BizFile portal.
- Read other articles we’ve written on Singaporean businesses here.
Featured Image Credit: @inaeyelash.sg/ Lynk Artisan/ Kopikhoo/ 2 Sisters Smoothie