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LOC for Business Owner

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SuiRad
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LOC for Business Owner

Post by SuiRad » Tue, 17 May 2022 5:46 pm

Hello,

My wife has a DP and she has just incorporated a Pte Ltd (restaurant). She is a 100% shareholder and also a director.
Getting a LOC is a real headache. She received permission from MOM through their online form to apply for LOC. To apply for a LOC she needs to do it via the myMOM platform. She created a Corppass account to connect to this platform. The problem is that to be able to submit LOC requests on myMOM you must have (if I understood properly) an EPonline account that must be created beforehand via the WPAR platform. Her Singpass account does not allow her to access WPAR (probably because she has a DP), so she hired a PR Director and updated her ACRA profile. This PR director has access to WPAR but to create an EPonline account on this platform the company's UEN must be added to the WPAR records (this is done via another form that she has just submitted). All these procedures take her a lot of time.

Do you know if this is the right process to follow to obtain a LOC? She's working on it for weeks and the MOM and ACRA can't give her a clear answer on the phone.

Thank you~
by Myasis Dragon » Tue, 17 May 2022 9:33 pm
SuiRad wrote:
Tue, 17 May 2022 5:46 pm
Hello,

My wife has a DP and she has just incorporated a Pte Ltd (restaurant). She is a 100% shareholder and also a director.
Getting a LOC is a real headache. She received permission from MOM through their online form to apply for LOC. To apply for a LOC she needs to do it via the myMOM platform. She created a Corppass account to connect to this platform. The problem is that to be able to submit LOC requests on myMOM you must have (if I understood properly) an EPonline account that must be created beforehand via the WPAR platform. Her Singpass account does not allow her to access WPAR (probably because she has a DP), so she hired a PR Director and updated her ACRA profile. This PR director has access to WPAR but to create an EPonline account on this platform the company's UEN must be added to the WPAR records (this is done via another form that she has just submitted). All these procedures take her a lot of time.

Do you know if this is the right process to follow to obtain a LOC? She's working on it for weeks and the MOM and ACRA can't give her a clear answer on the phone.

Thank you~
It has been a few years, and as I recall, the gahmen has decided that a person running their own business cannot be on a LOC. Here is the reasoning.

1. You can be a shareholder of a company on DP, EP, SC, PR, etc. Or. you can be a non-resident foreigner and be a shareholder of a Singapore company.

2. You cannot be a director of a company without a work permit. So, your first statement "and also a director" cannot be correct because she does not have a work permit. If she was a director, you wouldn't even be asking about a LOC because she would already be qualified to run the company as the director, ON AN EP.

If you have listed her as a director on the ACRA Bizfile, they will soon match records with MoM and find she has only a DP. I know this for a fact because after I left Singapore, a person on EP agreed to by my resident director while I was winding up the company. Within 60 days, I was contacted by the ACRA to tell me that the person I appointed as director did not qualify under Singapore law. Let me know when you get the letter.

3. Only an employee or director of a company can apply for a LOC for another person. But, your wife is not an employee or director of the company because she has no work permit, and therefore, she cannot apply for a LOC for herself.

4. For the same reason as #3, your wife can't hire anybody. As a shareholder, she can appoint a director that is normally resident in Singapore, which means that director must be an SC or PR because people on EP can't work for another company and people on DP can't work for for a company, period.

5. Your appointed director has all the rights, duties, and responsibilities of a director as enumerated under the Companies act and you cannot, in any way, limit those powers. This director can also be held criminally and civilly liable for the acts of the company, so most people have enough common sense not to become a placeholder director for someone trying to start a company. The exception are the companies that specialize in this... and they will cost a bomb and insist on many terms to protect their interests.

6. Assuming that you have a director appointed and registered with ACRA Bizfile, that director can apply for an EP for the owner of the company, to become a director, but not a LOC because....

7a. LOC's are designed for employees, not owner/directors, ie, the managers. At least one poster in these forums noted that their LOC rejection was because a director could not be on a LOC, only an EP.

7b. People starting their own company abused the shit out of the process. Therefore, the first step taken was to completely shut down the route of creating a sole proprietorship then applying for a LOC. They shut it down via the reasoning that you cannot have a SP to apply for a LOC because there is no employee to apply for the LOC.

8. And the abuse? DP's were forming an SP, getting a LOC, then working part time at things that would normally be reserved for Singaporeans by the gahmen. In the thread I recall, the DP formed a company, then started doing part time house work and child care. As a foreigner the DP would never be issued a work permit of any kind for another company to do this kind of work.

9. Thus, the gahmen decided that it needs to be an EP, because a LOC has no salary minimums, whereas you must make a certain amount of money to keep an EP. This pretty much shut the door on DP's making a few bux here and there doing odd jobs.

In essence, the gahmen has said that if you are a foreigner wanting to start a business, it needs to be a real business with real wages paid. The part time, no salary minimum LOC type of business are not to be encouraged. Thus, while there may be some confusion on the part of the various bureaucrats, the bottom line is this: Your rented director needs to apply for and EP for your spouse. And that means you need to specify at least the minimum salary for an EP. And that means that your business plan and pro forma financial statements (you do have those, right?) need to demonstrate sufficient cash on hand to support that salary through to profitability.

You must understand that the gahmen does not give a shit about foreigners trying to make their way in Singapore, else Singapore would be inundated with people from all over Asia trying to do what you are trying to do... start a company with no money and no minimum salary requirements. Singapore will only approve your work pass if it determines that you are a net benefit to Singapore.

Now, you may ultimately prove me wrong, and I hope you will post if that is the case, but I'd wager a Singapore $2 bill and a big bottle of Tiger that you will never get a LOC, that your director will have to apply for an EP, that you're going to need to meet the EP salary requirements, and that means that you need to demonstrate effectively how that salary is going to be paid.

Good luck.

Edit: I just went back an reread your question and you say your wife wants to start a restaurant. This is the absolute kiss of death for your application, unless you've got several hundred thousand dollars to create a higher end restaurant that is going to hire Singaporeans.

The gahmen absolutely does not want any foreigner competing in hawker center, mom and pop type businesses, and asking for a LOC suggests that is exactly what you are trying to do.

If you do have the several hundred thousand available to outfit and start a real restaurant, then the EP should be no problem. Be aware though, that another poster, again, years back, did exactly this. But, she nearly went broke because she faced so many delays from so many agencies in getting the necessary inspections and permits to actually open the restaurant.

Edit #2: I see that MoM has changed the regulations yet again regarding the LOC, and they've totally made a mess of things.

From the ACRA website, we get the ACRA requirements to be a director (please note the red arrow): https://www.acra.gov.sg/how-to-guides/s ... -personnel

Image

Yet, the muppets over at MoM state (again, check the red arrow) that a director can apply for a LOC. So, I have no idea how it is that the ACRA requires a director to have at least an EP to even be a director, but somehow MoM thinks that a director can get a LOC. No wonder they have no idea what they are doing. I still predict that you're not going to get a LOC.

https://www.mom.gov.sg/passes-and-permi ... ligibility

Image
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Myasis Dragon
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Re: LOC for Business Owner

Post by Myasis Dragon » Tue, 17 May 2022 9:33 pm

SuiRad wrote:
Tue, 17 May 2022 5:46 pm
Hello,

My wife has a DP and she has just incorporated a Pte Ltd (restaurant). She is a 100% shareholder and also a director.
Getting a LOC is a real headache. She received permission from MOM through their online form to apply for LOC. To apply for a LOC she needs to do it via the myMOM platform. She created a Corppass account to connect to this platform. The problem is that to be able to submit LOC requests on myMOM you must have (if I understood properly) an EPonline account that must be created beforehand via the WPAR platform. Her Singpass account does not allow her to access WPAR (probably because she has a DP), so she hired a PR Director and updated her ACRA profile. This PR director has access to WPAR but to create an EPonline account on this platform the company's UEN must be added to the WPAR records (this is done via another form that she has just submitted). All these procedures take her a lot of time.

Do you know if this is the right process to follow to obtain a LOC? She's working on it for weeks and the MOM and ACRA can't give her a clear answer on the phone.

Thank you~
It has been a few years, and as I recall, the gahmen has decided that a person running their own business cannot be on a LOC. Here is the reasoning.

1. You can be a shareholder of a company on DP, EP, SC, PR, etc. Or. you can be a non-resident foreigner and be a shareholder of a Singapore company.

2. You cannot be a director of a company without a work permit. So, your first statement "and also a director" cannot be correct because she does not have a work permit. If she was a director, you wouldn't even be asking about a LOC because she would already be qualified to run the company as the director, ON AN EP.

If you have listed her as a director on the ACRA Bizfile, they will soon match records with MoM and find she has only a DP. I know this for a fact because after I left Singapore, a person on EP agreed to by my resident director while I was winding up the company. Within 60 days, I was contacted by the ACRA to tell me that the person I appointed as director did not qualify under Singapore law. Let me know when you get the letter.

3. Only an employee or director of a company can apply for a LOC for another person. But, your wife is not an employee or director of the company because she has no work permit, and therefore, she cannot apply for a LOC for herself.

4. For the same reason as #3, your wife can't hire anybody. As a shareholder, she can appoint a director that is normally resident in Singapore, which means that director must be an SC or PR because people on EP can't work for another company and people on DP can't work for for a company, period.

5. Your appointed director has all the rights, duties, and responsibilities of a director as enumerated under the Companies act and you cannot, in any way, limit those powers. This director can also be held criminally and civilly liable for the acts of the company, so most people have enough common sense not to become a placeholder director for someone trying to start a company. The exception are the companies that specialize in this... and they will cost a bomb and insist on many terms to protect their interests.

6. Assuming that you have a director appointed and registered with ACRA Bizfile, that director can apply for an EP for the owner of the company, to become a director, but not a LOC because....

7a. LOC's are designed for employees, not owner/directors, ie, the managers. At least one poster in these forums noted that their LOC rejection was because a director could not be on a LOC, only an EP.

7b. People starting their own company abused the shit out of the process. Therefore, the first step taken was to completely shut down the route of creating a sole proprietorship then applying for a LOC. They shut it down via the reasoning that you cannot have a SP to apply for a LOC because there is no employee to apply for the LOC.

8. And the abuse? DP's were forming an SP, getting a LOC, then working part time at things that would normally be reserved for Singaporeans by the gahmen. In the thread I recall, the DP formed a company, then started doing part time house work and child care. As a foreigner the DP would never be issued a work permit of any kind for another company to do this kind of work.

9. Thus, the gahmen decided that it needs to be an EP, because a LOC has no salary minimums, whereas you must make a certain amount of money to keep an EP. This pretty much shut the door on DP's making a few bux here and there doing odd jobs.

In essence, the gahmen has said that if you are a foreigner wanting to start a business, it needs to be a real business with real wages paid. The part time, no salary minimum LOC type of business are not to be encouraged. Thus, while there may be some confusion on the part of the various bureaucrats, the bottom line is this: Your rented director needs to apply for and EP for your spouse. And that means you need to specify at least the minimum salary for an EP. And that means that your business plan and pro forma financial statements (you do have those, right?) need to demonstrate sufficient cash on hand to support that salary through to profitability.

You must understand that the gahmen does not give a shit about foreigners trying to make their way in Singapore, else Singapore would be inundated with people from all over Asia trying to do what you are trying to do... start a company with no money and no minimum salary requirements. Singapore will only approve your work pass if it determines that you are a net benefit to Singapore.

Now, you may ultimately prove me wrong, and I hope you will post if that is the case, but I'd wager a Singapore $2 bill and a big bottle of Tiger that you will never get a LOC, that your director will have to apply for an EP, that you're going to need to meet the EP salary requirements, and that means that you need to demonstrate effectively how that salary is going to be paid.

Good luck.

Edit: I just went back an reread your question and you say your wife wants to start a restaurant. This is the absolute kiss of death for your application, unless you've got several hundred thousand dollars to create a higher end restaurant that is going to hire Singaporeans.

The gahmen absolutely does not want any foreigner competing in hawker center, mom and pop type businesses, and asking for a LOC suggests that is exactly what you are trying to do.

If you do have the several hundred thousand available to outfit and start a real restaurant, then the EP should be no problem. Be aware though, that another poster, again, years back, did exactly this. But, she nearly went broke because she faced so many delays from so many agencies in getting the necessary inspections and permits to actually open the restaurant.

Edit #2: I see that MoM has changed the regulations yet again regarding the LOC, and they've totally made a mess of things.

From the ACRA website, we get the ACRA requirements to be a director (please note the red arrow): https://www.acra.gov.sg/how-to-guides/s ... -personnel

Image

Yet, the muppets over at MoM state (again, check the red arrow) that a director can apply for a LOC. So, I have no idea how it is that the ACRA requires a director to have at least an EP to even be a director, but somehow MoM thinks that a director can get a LOC. No wonder they have no idea what they are doing. I still predict that you're not going to get a LOC.

https://www.mom.gov.sg/passes-and-permi ... ligibility

Image

Myasis Dragon
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Re: LOC for Business Owner

Post by Myasis Dragon » Thu, 19 May 2022 9:58 pm

I'm more than halfway tempted to delete my entire post, except that I can't figure this out.

It wasn't a year ago that MoM announced that DP's on LOC were going to have to get their own EP's and that DP's with their own business could run until the next renewal cycle. Referencing this forum post: viewtopic.php?f=83&t=139536&p=841416&hi ... nt#p841416 Note that the referenced MoM pages are now all 404, not found, pages.

It used to be that if you wanted to start a pte ltd you had to appoint a resident director who would then turn around and apply for the EP necessary for you to become a director. In fact that's the reason most of the Singapore formation companies were in existence... to provide the rented director to do that work.

Now, automagically, MoM is advertising that a director can get a LOC and be a director. And provides a really cheesy online form to do it. But aren't we right back where we started? Who applies for the LOC? The DP? Isn't that a direct reversal of previous policy that basically said DP's could not apply for EP's or LOC's for themselves?

This has confused the crap out of me. OP, I can see why you can't figure out what to do next because it seems that the gahmen can't, either.

SuiRad
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Re: LOC for Business Owner

Post by SuiRad » Thu, 16 Jun 2022 3:30 pm

Thank you for your answers. After more than a month of waiting, my wife finally got her LOC approved. She can now legally work as a manager in her own company.
The process was so confusing that we had to ask help from a consulting firm.

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sundaymorningstaple
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Re: LOC for Business Owner

Post by sundaymorningstaple » Thu, 16 Jun 2022 4:19 pm

SuiRad,
Congratulations on your wife's success. I wonder if you would be so kind as to provide a play-by-play outline of the steps you took and the timeframe required for our anecdotal database to pay it forward to the next person who has a similar issue. It would be greatly appreciated - it's what we do here. Again, congratulations & we wish you/her success in her endeavour.

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SuiRad wrote:
Thu, 16 Jun 2022 3:30 pm
Thank you for your answers. After more than a month of waiting, my wife finally got her LOC approved. She can now legally work as a manager in her own company.
The process was so confusing that we had to ask help from a consulting firm.
SOME PEOPLE TRY TO TURN BACK THEIR ODOMETERS. NOT ME. I WANT PEOPLE TO KNOW WHY I LOOK THIS WAY. I'VE TRAVELED A LONG WAY, AND SOME OF THE ROADS WEREN'T PAVED. ~ Will Rogers

swizzle
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Re: LOC for Business Owner

Post by swizzle » Wed, 03 May 2023 11:00 pm

Hi!

I'm encountering the same issue. I'm on DP and I'm following this guide to apply for a LOC. I registered a sole proprietorship and then submitted the online request for LOC which have been approved already.

I have created a corppass and assigned the e-services for EP online, WPAR, and myMOM portal to myself.
I'm now trying to apply for the LOC using myMOM Portal but I am stuck. I can't access EP online and WPAR either.

Image

Hope someone could shed some light on this

Yashv28
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Re: LOC for Business Owner

Post by Yashv28 » Thu, 10 Aug 2023 11:59 pm

Hi, I am facing the same issue with my LOC. I have registered a sole proprietorship business and have got the approval on the request to apply for LOC but not able to apply. Suggestions would be appreciated.
Thanks

sushenam
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Re: LOC for Business Owner

Post by sushenam » Fri, 10 Nov 2023 10:43 am

Hi, Facing the same issue as above. @suirad could you possibly advise or provide the agency name you used for applying for the LOC.

Thanks

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