Can a Dependant’s Pass Holder Run a Business in Singapore? LOC vs EP
Last Updated: June 2026
A Dependant’s Pass holder can own shares in a Singapore company freely, even as a 100% shareholder, with no work pass at all. But owning shares and actively working in the business are two different things. To run the company day to day, draw a role from it, or otherwise work in it, a DP holder needs work authorisation: either a Letter of Consent (LOC) granted because they own at least 30% of a registered, active business, or their own Employment Pass issued under the company. This guide walks through both routes, who qualifies, and how to set the business up correctly from the start.
Key Takeaways
- A Dependant’s Pass holder can be a passive shareholder or investor in a Singapore company without any work pass.
- To actively work in or operate the business, a DP holder needs either a Letter of Consent (LOC) for DP business owners or an Employment Pass.
- The LOC route requires the DP holder to own at least 30% of the shares of a business that is registered with ACRA and active. The LOC is tied to that specific business.
- Since 1 May 2021, DP holders who are employees can no longer work on an LOC. Employee DP holders must apply for their own work pass (EP, S Pass, or Work Permit).
- The EP route means incorporating the company, then applying for an Employment Pass under it, meeting the minimum salary (S$5,600, or S$6,200 in financial services) and COMPASS.
- A Singapore company still needs at least one locally resident director, a role a DP holder may satisfy once conditions are met.
What Is a Dependant’s Pass?
The Dependant’s Pass (DP) is issued by the Ministry of Manpower to close family members of certain work pass holders. It covers the legally married spouse and unmarried children under 21 of an Employment Pass, S Pass, or Overseas Networks and Expertise (ONE) Pass holder who meets the minimum qualifying salary set by MOM. In short, it lets your family live in Singapore while you hold a qualifying pass.
A DP on its own is a residence pass, not a work pass. It lets the holder live here, but it does not by itself permit them to take up employment or run a business. That is the distinction that matters for anyone with entrepreneurial plans, and it is where the LOC and EP routes come in. If you are still deciding on the main earner’s pass first, our overview of work passes in Singapore sets out the options.
Can a DP Holder Own a Business or Just Invest in One?
Owning is allowed; working is what needs approval. A Dependant’s Pass holder may hold shares in a Singapore company as a passive investor without any additional permission. You can put in capital, hold equity, and receive dividends purely as a shareholder. There is no cap on how much a DP holder may own; the share register is a separate question from who is authorised to work.
A DP holder may also be appointed a director. A directorship is a legal office, not the same as being an employee, but if you intend to be involved in the daily running of the business you cross into work that needs authorisation. The company must also independently satisfy the resident-director rule, covered below. For the wider picture of setting up here without citizenship, see opening a business in Singapore as a foreigner.
What Is the Letter of Consent for DP Business Owners?
The Letter of Consent (LOC) for Dependant’s Pass business owners is an MOM approval that lets an eligible DP holder run their own registered business. It is the common route for a DP holder who has set up a company and wants to operate it themselves rather than draw a salaried EP role.
The LOC is tied to one specific business and authorises the DP holder to work in it as its owner. If the holder later wants to work in a different company, or the business ceases to be active, the LOC no longer applies and a fresh arrangement is needed.
Who Qualifies for a DP Business Owner LOC?
The core requirement is ownership. According to the MOM eligibility rules for the LOC for Dependant’s Pass business owners, the DP holder must be one of these in an ACRA-registered business: a sole proprietor, a partner, or a company director who holds at least 30% of the shares. The business must be registered with ACRA and active.
That 30% threshold is firm. A director with less than 30% of the shares does not qualify, even if they founded the company or run it in practice. The business must also stay genuinely active; the LOC for Dependant’s Pass business owners lapses once the business is no longer operating. At renewal, MOM also expects the business to have hired a local employee earning at least the Local Qualifying Salary with recent CPF contributions, so the LOC is not a route for a dormant shell.
The 2021 Change: DP Employees Can No Longer Use an LOC
This is the point most outdated guides get wrong. Before 2021, a DP holder could work as an ordinary employee on an LOC sponsored by their employer. That ended on 1 May 2021. Since that date, DP holders who are employees can no longer work on a Letter of Consent; an employee DP holder must apply for and hold their own work pass, an Employment Pass, S Pass, or Work Permit, like any other foreign hire.
The LOC remains available only for eligible DP business owners who meet the 30% ownership test above. So the practical split today is simple: if you own and run your own business, the LOC may fit; if you want to be employed by a company (including one you do not majority-own), you need your own work pass. For an EP walkthrough, see our guide to the Employment Pass in 2026 and the new COMPASS salary benchmarks.
The Employment Pass Route for DP Holders
The alternative to the LOC is for the DP holder to obtain an Employment Pass under the company. The usual sequence is to incorporate first, then have the company apply for an EP for the DP holder as an employee, typically in a managerial or executive role.
An EP applicant must meet the minimum qualifying salary of S$5,600 a month (S$6,200 in financial services), rising with age, and the application is scored under COMPASS, MOM’s points-based framework that weighs salary, qualifications, and the firm’s diversity and local-hiring profile. Unlike the LOC, the EP is not tied to a 30% shareholding, so it suits a DP holder paid a qualifying salary regardless of how much equity they hold. If you are weighing the entrepreneur route too, compare EntrePass versus Employment Pass.
The diagram below summarises what a DP holder can do without extra approval and what crosses into territory that needs MOM’s sign-off.
How to Set Up the Business: Step by Step
Whether you end up on an LOC or an EP, the company-building steps are largely the same. The work-pass decision sits on top of a correctly incorporated company.
- Incorporate a private limited company. The Pte Ltd is the standard structure. To compare it with a sole proprietorship or LLP first, see choosing the right business structure in Singapore; the mechanics are in how to register a company in Singapore.
- Set the shareholding deliberately. If the LOC is your target, make sure the DP holder owns at least 30% of the shares. Get this right at incorporation rather than restructuring later.
- Meet the resident-director rule. Every Singapore company needs at least one director ordinarily resident here. A DP holder may meet this once conditions are satisfied; if not, a nominee director service bridges the gap.
- Apply for the LOC or the EP. For the LOC, the DP holder applies as business owner once the company is registered and active. For the EP, the company applies on the holder’s behalf and must clear the salary floor and COMPASS.
- Set up banking and government access. Open a corporate account (see opening a corporate bank account in Singapore) and register for CorpPass, including the route for foreigners without SingPass.
Can a DP Holder Do Freelance Work?
Freelancing on a Dependant’s Pass needs MOM approval; it is not allowed on a DP alone. A DP holder who takes on freelance or gig work without the right authorisation is working without a valid pass, which carries real penalties. If your plan is to provide services on your own account rather than run a registered company, check the correct authorisation with MOM before you start, because freelancing does not fall neatly under either the standard LOC or a company-sponsored EP.
For DP holders who expect to be here long term, options such as permanent residency can eventually remove the work-pass question altogether, since a PR may work and run a business freely.
LOC vs EP: Which Route Fits You?
The two routes serve different founders. The LOC is built for someone who owns and runs their own business and can clear the 30% shareholding test. It has no salary floor of its own and keeps you in control of a company you majority-own, but it is limited to that one active business and carries the local-hire expectation at renewal.
The EP suits a DP holder who will draw a qualifying salary from the company, holds any level of equity, and wants a pass that attaches to an employment role rather than a 30% stake. It costs more to maintain (the salary commitment and COMPASS conditions) and is the only route open to a DP holder who will be an employee rather than a majority owner. Many founders model both, because the answer often turns on how the shareholding and the founder’s pay are structured.
Set Up the Right Route With Excellence Singapore
Getting the structure right at the start saves a painful restructure later: the 30% test for an LOC, the salary and COMPASS thresholds for an EP, the resident-director rule, and the banking and CorpPass setup all interlock. We incorporate your company, structure the shareholding to fit your chosen pass, advise on whether the LOC or EP route is the better fit, and handle the resident-director, secretarial, address, and work-pass support so the pieces line up. Talk to Excellence Singapore and we will map the cleanest compliant path for your situation.
Frequently Asked Questions
Can a Dependant’s Pass holder start a business in Singapore?
Yes. A DP holder can own shares in a Singapore company as a passive shareholder or investor with no work pass. To actively run the business, the DP holder needs either a Letter of Consent (for an owner of at least 30% of a registered, active business) or an Employment Pass under the company.
What is a Letter of Consent for a DP holder?
It is an MOM approval that lets an eligible Dependant’s Pass business owner run their own registered business. The LOC is tied to that specific business and authorises the DP holder to work in it as its owner.
What are the eligibility requirements for a DP business owner LOC?
The DP holder must be a sole proprietor, a partner, or a company director who owns at least 30% of the shares in an ACRA-registered business, and the business must be active. A renewal also expects the business to have hired a local employee at the Local Qualifying Salary.
Can a DP holder work as an employee on a Letter of Consent?
No. Since 1 May 2021, DP holders who are employees can no longer work on an LOC. An employee DP holder must apply for and hold their own work pass, such as an Employment Pass, S Pass, or Work Permit. The LOC is only for eligible DP business owners.
Should a DP holder use an LOC or an Employment Pass?
The LOC suits a DP holder who owns and runs their own business and meets the 30% shareholding test. An Employment Pass suits a DP holder who will draw a qualifying salary under the company and may hold any level of equity. The best fit depends on how the shareholding and pay are set up.
Can a Dependant’s Pass holder do freelance work?
Only with MOM approval. Freelancing is not allowed on a Dependant’s Pass alone, so a DP holder must obtain the correct authorisation from MOM before taking on freelance or gig work.
