Home based businesses are cheaper to start in Singapore than almost anyone expects. You can register a sole proprietorship with ACRA for $115, run a small operation out of your HDB flat or condo without paying HDB a cent under the Home-Based Business Scheme, and skip the SFA licence entirely if you bake and sell straight to customers. The real money question is not the setup fee. It is what happens after the income starts: which scheme you fall under, whether a $20 Home Office registration applies, and how your profit gets taxed at your personal rate. This guide walks through the 2026 numbers in the order you actually meet them.
Singapore runs two separate schemes for working from a residential address, and they cover different kinds of work. Picking the right one decides whether you pay anything at all.
The Home-Based Business Scheme is the one most people want. It covers small, hands-on work done inside the home: baking, home-cooked food, hairdressing, manicures, sewing, private tutoring on a one-to-one basis, and similar trades. You do not register with HDB or URA, you do not pay a fee, and you do not need prior approval. The catch is that only people who live in the flat may work on the business, and the operation has to stay invisible to the neighbourhood.
The Home Office Scheme is the second one, and it is for desk work rather than physical trades: consulting, accountancy, design, IT, e-commerce where stock sits elsewhere. This one you do register, and it costs a flat $20 administration fee, whether your home is an HDB flat (registered with HDB) or private property (registered with URA). Approval is usually instant. In return, you may employ up to two people who do not live in the home.
| Feature | Home-Based Business Scheme | Home Office Scheme |
|---|---|---|
| Type of work | Hands-on trades (food, beauty, crafts, 1-to-1 tuition) | Administrative or office work (consulting, IT, e-commerce) |
| Registration needed | No HDB or URA registration | Register with HDB or URA |
| Fee | Free | $20 admin fee (incl. GST) |
| Approval | No prior approval | Usually instant on submission |
| Who can work there | Only residents of the home | Residents plus up to 2 non-resident staff |
| Customers visiting | Light foot traffic only | Generally no walk-in clients |
You can earn from a hobby without registering, but the moment you trade under a business name or carry on an activity for profit on a continuing basis, ACRA registration is the legal step. For a one-person operation that means a sole proprietorship, registered yourself through the BizFile portal with Singpass in about fifteen minutes.
The fee is $15 to apply for the business name plus $100 to register for one year, so $115 to start. Registration is renewed yearly: $30 for a one-year renewal or $90 for three years. Your home address can be the registered business address at no extra cost under either scheme above.
A sole proprietorship is not a separate legal person, so the profit is simply your income and you carry unlimited personal liability for any debt. If you expect to scale, a private limited company costs $315 to incorporate ($15 name + $300 registration) and ring-fences your personal assets, but it brings annual filing, an appointed director, and accounting duties. Run the personal-income side of the decision through our income tax calculator before you incorporate, because the tax treatment is the part most people get wrong.
| Item | Sole proprietorship | Private limited company |
|---|---|---|
| Name application | $15 | $15 |
| Registration | $100 (1 year) | $300 |
| Total to start | $115 | $315 |
| Yearly upkeep | $30 renewal | $60 annual return + accounting |
| Personal liability | Unlimited | Limited to the company |
| Profit taxed as | Your personal income | Corporate, 17% with start-up relief |
Home bakers and home cooks are the largest slice of home based businesses in Singapore, and the good news is that the Singapore Food Agency does not licence them. Home-based food operations are treated as low-risk and sit outside the food shop licensing regime, so there is no SFA licence fee to pay.
Exempt is not the same as unregulated. SFA still holds you to the food safety laws, and it enforces them: selling food that is unsafe or unsuitable can bring penalties. Three lines stay firm. You sell direct to individual consumers only, not to shops or other retailers. You cannot run catering. And the scale stays small enough that it does not turn your block into a commercial kitchen.
This is where the money math lives, and it is where competitor guides go thin. A sole proprietorship pays no separate business tax. Your net profit is added to your other income and taxed at Singapore's personal rates, which run from 0% up to 24% on the slice of chargeable income above $1,000,000 for the Year of Assessment 2024 onward.
Most home based businesses sit far below that, so the first $20,000 of total chargeable income is still taxed at 0%. What changes is that you now declare trade income, and you can deduct genuine business expenses against it: ingredients, packaging, a share of utilities, delivery, and platform fees all count. Keep every receipt for five years, because IRAS can ask. Sort your records early using a simple monthly budget split between household and business spend so the two never blur.
GST is a separate question with a clear line: you only register for GST once your taxable turnover passes, or is expected to pass, $1 million in a 12-month period. Almost no home operation hits that, so GST is optional, and voluntary registration rarely pays unless your customers are themselves GST-registered businesses.
If you run the business as a sole proprietor or freelancer, you are self-employed in CPF's eyes. Once your net trade income for the year clears $6,000, MediSave contributions become compulsory, charged at 4% to 10.5% depending on your age and income. It is easy to overlook in year one and then face a bill after IRAS files your assessment.
Both schemes share one condition that overrides everything else: the business must not disturb the residential character of the estate. Break it and a single neighbour complaint can end the operation, regardless of how clean your ACRA paperwork is.
What that means in practice is no commercial signage outside the flat, no advertising of the residential address as a business address that draws walk-in crowds, no extra noise, smoke, smell, or litter, and no steady stream of vehicles or visitors. Storing large stock or bulky equipment in common corridors is a separate fire-safety breach. Tuition is allowed only one student at a time; running a class turns it into a tuition centre that a home cannot host.
Run the steps in this order and you avoid paying for things you do not need, and skipping things you do.
Not for the Home-Based Business Scheme, which covers small hands-on trades like baking or hairdressing; there is no registration and no fee. The Home Office Scheme for office-type work does require registration with HDB and a one-time $20 administration fee.
A sole proprietorship costs $115 with ACRA, made up of a $15 name application and $100 for one year of registration, then $30 a year to renew. A private limited company costs $315 to incorporate and carries higher ongoing compliance costs.
No. Genuine home-based food businesses are exempt from SFA licensing because they are low-risk, so there is no licence fee. You must still meet food safety laws, sell only direct to individual consumers, and avoid catering or wholesale to retailers.
Yes. As a sole proprietor your net profit is added to your personal income and taxed at rates from 0% to 24%, though the first $20,000 of total chargeable income is taxed at 0%. You can deduct genuine business expenses, and GST only applies above $1 million turnover.
This is general financial information for Singapore, not personal financial advice. Figures change — verify current rates against the official sources above before acting. See our full disclaimer.