Open a Sole Proprietorship on a DP and getting the LoC

MrsMagnum · Post by **MrsMagnum** » Tue, 04 Jun 2013 10:34 am

That's a tricky one. You're right in that anything the business makes, you make, as it's an SP. So your incomes are one and the same.

I haven't actually reached my estimated monthly salary yet because it has taken a while to get going/network and the market has also been a little slow for everyone in my industry over the last couple of months. But I'm sure there will be some months where I too get a big commission and will massively exceed it.

If you put that you won't be earning anything then I can't see it being accepted as no income = no tax = no reason for them to approve it. I would pitch a middle ground and explain in your covering letter that it's estimated pending contracts. Too low and it doesn't look like a proper job; too high and you will have to guarantee/pay up front a huge amount of tax. Perhaps think about what you might realistically make in a year and divide it by 12? I would stress that I'm no expert, other than that mine was approved, though.

I don't think MOM usually gives a reason if they decline you I'm afraid.

Good luck!

Selebration · Post by **Selebration** » Tue, 04 Jun 2013 10:50 am

Thanks, MrsMagnum,

Well, what to do... I think I'm not going to commit to a fixed salary figure at this stage, but will expand my explanatory note. After all, it is fairly normal for a business entrepreneur to not draw a salary in the first year or so...

Fingers crossed

If you do draw a salary do you then have to start paying Foreign Worker Levies, CPF, etc...?

MrsMagnum · Post by **MrsMagnum** » Tue, 04 Jun 2013 11:33 am

Fingers crossed.

I had never heard of Foreign Worker Levies, but it looks like the employer only has to pay them for Work Permit and S Pass holders, neither of which you will be on http://www.mom.gov.sg/foreign-manpower/ ... rkers.aspx

Only PRs and Singapore Citizens (and their employers) have to pay CPF

)

cdmaningo · Post by **cdmaningo** » Tue, 25 Jun 2013 6:05 pm

I am planning on applying for a SP as a yoga teacher. Has anyone done this recently and been approved? I have a friend who has, but that was years ago.

Does anyone have any suggestions on how I can make my application more "acceptable"?

Also, I read a post about the minimum income that has been approved was $2500. Has anyone been approved for less?

Thank you!

Selebration · Post by **Selebration** » Wed, 26 Jun 2013 4:24 pm

Well, I said I'd feed back to this post, so here goes. I've just received my response to my LOC application to work as a Consultant for my own SP consultancy company with a stipulated salary of 0! The approval took 3 weeks to come through.

So it does look like they consider each application on its own merits. I explained my circumstances - that I am offering a new and unique service to companies in Singapore and will only start paying myself a salary once I win a decent business contract (which could take time) and I will review salary as and when necessary.

As SP owner I am automatically liable for tax against all business income, and own any business assets that accrue. But this LOC means that now I am legally allowed to go out and work to win business for my company.

My application was premised on a unique new business opportunity not currently being fulfilled here in Singapore. For a yoga business it might be trickier as there are plenty of Singaporeans who can teach yoga and you might be seen as competing for jobs that a local could do. Good luck!

cdmaningo · Post by **cdmaningo** » Wed, 03 Jul 2013 8:40 am

Thanks for your feedback, Selebration.

nutnut · Post by **nutnut** » Wed, 03 Jul 2013 4:18 pm

Great, glad this still works, love this thread, thank you to all helpful folk!

rsgmisc · Post by **rsgmisc** » Thu, 01 Aug 2013 2:09 pm

Thanks a lot for putting together this information. I received LOC for my sole proprietorship today!

goldenarms · Post by **goldenarms** » Tue, 27 Aug 2013 2:08 pm

Hi. Quick question for all those who have been succesful. What did you fill in for the section " value of turnover of the company in the past 3 yrs"? And total of employees? Just one foreign?
I am also a bit confused about the " salary payable by" section. If I do work for overseas conpany do I need to check "both local and overseas"?
Thanks for the help!!!

Post by **Strong Eagle** » Wed, 28 Aug 2013 6:53 am

goldenarms wrote:Hi. Quick question for all those who have been succesful. What did you fill in for the section " value of turnover of the company in the past 3 yrs"? And total of employees? Just one foreign?
I am also a bit confused about the " salary payable by" section. If I do work for overseas conpany do I need to check "both local and overseas"?
Thanks for the help!!!

The only companies that can apply for a LOC are local companies. If your overseas company does not have a legal presence in Singapore, it cannot apply. You will need to work for the local company entity, regardless of who actually pays you.

Edit: I see you are referring to starting your own company and obtaining a LOC. The company that you form will be local... does not matter who your clients are.

goldenarms · Post by **goldenarms** » Thu, 29 Aug 2013 1:59 pm

Strong Eagle, yes sorry, I should have been more clear. I have registered my company with ACRA and am now completing the LOC and supporting docs.
I understand I sign my own name under the Authorized signature correct? I assume I also just put One foreign employee in that section.
Anyone has any tips please let me know.

Thanks for all the help.!

Selebration · Post by **Selebration** » Thu, 29 Aug 2013 6:03 pm

yup! To get a LOC for you to run your own ACRA-reg SP business you put yourself down and tell it like it is. Even if the questions don't seem a good fit just answer as best you can.
Obviously if you are thinking of employing others then that might be different...

noonoo71 · Post by **noonoo71** » Wed, 02 Oct 2013 12:11 pm

I'd like to say a very big thank you to everyone who has taken the time to contribute to this thread.
After registering with ACRA, I followed instructions as on this thread, posted documents off to MOM and lo and behold about 2 weeks later I got the LOC in the post

I have been approved as a SP/Employee of my own business. I was quite nervous about the entire process as I was applying for approval of a Confectionery manufacturing business (which needs to also have other food licences etc.) the LOC was approved and I have since taken further necessary steps required to rent professinal kitchens and applied and received all other licences that i require to make my business legal . Phew !! Thank you .

Post by **Strong Eagle** » Wed, 02 Oct 2013 8:43 pm

^^^^^^

Congratulations to you. Hope your business flourishes.

LilySingAdventure · Post by **LilySingAdventure** » Mon, 21 Oct 2013 3:37 pm

Hi everyone! Thank you so much for all the threads. I have been running around in circle for a while trying to find out the right info regarding how to successfully get your LOC approved for your SP. Thanks to you, it's starting to be much clearer!

Just one question: Noonoo71, as you recently got your LOC approved (congrats by the way!), can you please confirm that you followed exactly the same process everybody refers to since 2011 (1st page) and sent the 6/7 (including the LOC form) documents? That's it?
Anything else to do?

Did anyone experience some difficulties recently?

Thank you for your feedback and wish me luck!

SINGAPORE EXPATS FORUM
Singapore Expat Forum and Message Board for Expats in Singapore & Expatriates Relocating to Singapore

Open a Sole Proprietorship on a DP and getting the LoC

My LOC has been approved on the basis of 0 salary

Yup!

Thank you !

DP applying for a LOC for a SP

Who is online