Guide to being self-employed in Singapore

According to the World Bank, as much as 14% of the workforce in Singapore in 2019 was self-employed. While you may have to manage most things on your own, there are benefits of self-employment, such as flexible hours, workload and more. This can be particularly handy if you have other commitments like taking care of young children. The team at Pacific Prime answers some FAQs about being self-employed in Singapore, including legal issues and health insurance.

What defines being self-employed?

In Singapore, the Inland Revenue Authority of Singapore (IRAS) categorises freelance work as a type of self-employment. Some other examples of self-employment include being a taxi driver, operating an online business, or working as a real estate or insurance agent.

The IRAS has also compiled a list of important details for self-employed individuals to take note of, including filing for income tax.

Can an expat be self-employed in Singapore?

Legal self-employment in Singapore is only possible if you’re a Singaporean citizen or permanent resident. Additionally, you’ll have to pay income tax and contribute to your Medisave account, which is the mandatory medical savings program for all Singapore permanent residents and citizens. As an expat, you’ll need either a Work Permit, S Pass or Employment Pass to work legally. 

Fortunately, there are two ways around this. The first option is to set up a local business, which will require having a director who is a Singaporean resident. Alternatively, you can apply for an Entrepass, which will require you to incorporate a company. Additionally, you’ll have to raise funding or look for partnerships with approved organisations.

What if my spouse or partner is a resident?

It is illegal to work while you’re staying in Singapore under a Dependant’s Pass (DP) or a Long Term Visit Pass (LTVP) without a Letter of Consent, Work Permit, Employment Pass or S Pass. An employer would typically apply for a permit from the Ministry of Manpower. 

The Letter of Consent, however, accommodates DP or LTVP holders who are living in Singapore under their spouse or partner’s EP. If the EP expires, the Letter of Consent immediately becomes invalid.

Do self-employed expats need a business license?

A business license isn’t necessary for self-employed or freelance work in Singapore, though some industries require it. For example, if you plan on running a real estate agency, you’ll have to get a license from the Council of Estate Agents (CEA). Similarly, you’ll need to get a license from the Land Transport Authority (LTA) if you want to provide a ride-sharing service. You’ll also need a license if you want to be a food stall hawker or an insurance agent.

How about health insurance?

Citizens and permanent residents in Singapore contribute to mandatory national health insurance called Medishield. All they have to do is pay an affordable yearly premium to help cover inpatient hospitalisation and medical treatment. As an expat, you’ll need to secure an expat health insurance plan in Singapore if you want to avoid paying out of your pocket. 

Most expat employees working in Singapore will have medical insurance from their employers. However, if you’re a freelancer or self-employed, your only option is to get your own personal health insurance. 

How does individual health insurance differ from employer-provided health insurance?

One good thing about employer-provided health insurance (or group health insurance) is that pre-existing medical conditions are covered. Most individual health insurance policies, on the other hand, do not cover medical conditions that you had prior to purchasing the plan. 

That said, group health insurance plans often offer fewer benefits. For instance, some employers won’t provide coverage for dental, maternity or vision care. Buying your own plan allows you to choose the coverage you need.

Are there any other insurance plans I should get?

You won’t have access to worker’s compensation insurance, a type of employer-provided insurance that ensures you still have income if you can’t work for some time. The good news is that you can purchase business interruption insurance or other sorts of income protection instead. These can be real lifesavers in situations such as injury or sickness.

Want to find out more?

Pacific Prime Singapore has years of experience in helping expats and their families find the right health insurance plan. Its team of experts are on hand to answer insurance-related questions and provide free plan comparisons and quotes. Contact them now.

Written in collaboration with:
Pacific Prime Singapore
18 Cross Street, China Square Central, #14-05
6346 3781 | pacificprime.sg

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