How to start your own home-based business in Singapore (2026 guide)

Most Singaporeans assume you need a shopfront, a $100,000 renovation budget, and maybe a prompt to ChatGPT on strategies and how to launch a business. 

Voila! You are now a business owner. But increasingly, the answer is a lot simpler-and it starts closer to home than you think.

Whether you're an employee looking to earn on the side, a homemaker turning a skill into income, or someone ready to go all-in on a home business full-time, the path in Singapore is more accessible than most people realise.

The economics make it easy to see why. 

Even a single hot desk at a coworking space in the CBD runs $400 a month and up-before you factor in utilities, travel, and a decent lunch. A home business cuts most of that out entirely.

Add to that the rise of Shopee, Carousell, PayNow, and Instagram as ready-built platforms to sell, collect payments, and reach customers, and getting started has genuinely never been more practical. 

The pandemic accelerated the trend. More Singaporeans are treating their home as a legitimate launchpad.

Here's what you need to know to get started properly.

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1. What counts as a Home-Based Business?

In Singapore, the government officially recognises two frameworks for running a business from home. Knowing which applies to you is the first thing to sort out, because they work quite differently.

Home-Based Business Scheme (HBBS)

The HBBS is the more flexible of the two. 

It lets you run small-scale activities-home baking, private tuition, handmade crafts, freelance work, e-commerce fulfilment-without needing any approval from HDB or URA. 

You just need to follow the rules.

One thing to note if you're tutoring: HDB allows private tuition for no more than three students at a time under the HBBS. 

If your classes grow beyond that, you'll need to move to a commercial space. (If you're already picturing a tuition empire with 30 students and ceiling-high whiteboards, your neighbours have filed the complaint in advance.)

Home Office Scheme (HOS)

On the other hand, the HOS is for those running the administrative functions of a registered company from home. 

Think accountants, IT consultants, designers, marketing agencies. 

It requires a one-time $20 application-via GoBusiness for HDB flats, or URA for private properties.

In return, you can use your home address as your ACRA-registered business address and hire up to two non-resident employees. 

The trade-off: customers and clients cannot visit. The HOS covers administrative work only.

If you live in a condo or strata-titled development, also check your MCST by-laws.

 Management Corporations can impose additional restrictions on top of what URA requires.

A few things that are off-limits under both schemes:

• Massage services (not permitted in residential premises, full stop-yes, even if you've watched every YouTube tutorial and sourced a massage table off Carousell)
• Large-scale food production or catering
• Pet grooming or boarding
• Walk-in retail with frequent customer visits
• Anything causing noise, odour, smoke, or heavy foot traffic to neighbours

Under both schemes, there must be no signage, posters, or advertising displayed at your home. And the golden rule: your home must primarily function as a residence. 

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The moment it starts looking and operating like a shop or studio, you risk enforcement action.

Fire safety note: Both schemes require a minimum 8A/34B ABC Dry Chemical Powder fire extinguisher and a battery-operated smoke detector in your workspace. 

Both are readily available at DIY stores for around $50-$80 combined.

2. Steps to start a Home Business

Step 1: Estimate your startup costs

One of the biggest advantages of a home business is the low capital requirement. No rent, no renovation, no security deposit. 

Though, you still have some costs to plan for:

• ACRA registration (sole proprietorship): $100 registration + $15 name reservation = $115 total
• Fire safety equipment: ~$50-$80 (required under both schemes)
• Basic website: Squarespace or Wix from ~$18-$20/month
• Marketing: social media is free; budget for photography if you're selling products
• Materials/supplies: varies by business type

Keep personal and business expenses separate from day one. It makes IRAS tax filing significantly less painful come April.

Step 2: Register your business (ACRA)

If you're using any name other than your legal name on NRIC, you must register with ACRA via BizFile+. 

This applies even to home businesses. The process is fully digital and requires SingPass. 

Most sole proprietorships are approved within one to two working days — faster than getting a GP appointment and with significantly less waiting time.

For most home business owners, a sole proprietorship is the right mode. It's the simplest and cheapest. 

A Private Limited Company (Pte Ltd) offers personal liability protection but costs $315 to incorporate and requires a company secretary. 

It's worth it if you're planning to scale, but an overkill for most that are starting out.

Once approved, you'll receive a Unique Entity Number — your business's official ID for invoicing and banking.

Step 3: Set up payments and banking

Open a separate business bank account as soon as you're registered. 

Traditional banks like DBS, OCBC, and UOB all offer business accounts. For payments, PayNow (zero fees, instant) is the easiest way to collect from local clients.

Stripe or PayPal works well for international clients. For product businesses on Shopee or Lazada, payments are handled by the platform automatically.

Keep in mind: if your annual taxable turnover exceeds $1 million, GST registration becomes mandatory. 

At home business scale, most won't hit that income threshold early on but it's good to know the number.

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Step 4: Market your business

Start with the free channels. Instagram and TikTok are excellent for product-based businesses-consistent posting reels with Singapore-specific hashtags (#SGfoodie, #SGhandmade) builds organic reach over time.

Carousell and Shopee give you instant access to buyers without needing your own website. 

Facebook Groups (neighbourhood communities, parent networks) are particularly effective for home-based F&B and tuition businesses.

Pick one or two channels and commit to them. Avoid spreading yourself thin. Your first 10 customers will almost certainly come from people who already know you.

3. Before you launch, check these

The steps above get you registered and set up. But there are a few things people routinely skip before their first customer-and only realise they needed later.

Check whether your business type needs a licence beyond ACRA

Registration with ACRA makes your business legal, but it doesn't mean you're automatically licensed to operate. 

Depending on what you do-food handling, financial advice, education services-you may need additional approvals. 

The GoBusiness Licence Finder runs you through a short questionnaire and tells you exactly what applies. 

It takes 5 minutes and can save you from operating illegally without knowing it.

Think carefully about your business name before you register it

Once it's filed with ACRA, changing it costs another $15 and means updating everything that references it-your bank account, your social media, your invoices. 

Sit with it for a day before submitting.

Sort out a basic contract template before your first client

Even a simple one-page agreement covering scope, payment terms, and revision limits protects both sides. 

It also signals professionalism from the start, which matters more than most people realise for client trust.

Decide upfront how you'll handle refunds and cancellations

Much easier to set this policy before a dispute than explain it after. 

State it clearly on your website or in your order confirmation messages.

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Set up a free Google Business Profile

It takes 15 minutes and immediately makes you discoverable to local customers searching for what you do. 

Especially effective for service-based businesses-tutors, bakers, coaches-where reviews carry a lot of weight.

If you're in home-based food, consider the SFA's WSQ Food Safety Course Level One.

It's not mandatory for home-based businesses, but it's a one-day course that signals to customers you take hygiene seriously-and gives you a solid foundation before you scale. 

Details on the SFA website.

Update your ACRA records within 14 days of any changes

Including if you move home. Most people don't know this is a legal obligation, not just admin. GoBusiness FAQ has the details.

4. Taxes and CPF for Self-Employed People

Here's where most first-timers get caught off guard. The rules for self-employed persons (SEPs) are different from those for employees on a payroll.

Income tax

You file your personal income tax return via myTax Portal by April 18 each year. 

You're taxed on your Net Trade Income (NTI)-that's gross revenue minus allowable business expenses. 

Singapore's progressive income tax rates start at zero per cent for income below $20,000, so most home businesses starting out will have a modest tax bill, if any.

You can also deduct business-related expenses-materials, equipment, marketing costs, and a proportionate share of utilities and internet if part of your home is used for work.

CPF and MediSave

As a SEP, you're not required to contribute to your Ordinary or Special Account. But if your NTI exceeds $6,000 a year, you are required to make MediSave contributions. 

CPF Board will send you a notice after IRAS completes your income assessment; you then have 30 days to pay.

If you're running a home business while still employed full-time, your employer continues to handle CPF contributions on your employment income as usual. 

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On top of that, you also owe MediSave contributions on your trade income if it crosses the $6,000 threshold. Both obligations run separately-your CPF statement will reflect both.

The upside: your compulsory MediSave contributions qualify for full income tax relief. 

Voluntary CPF contributions also attract relief, capped at 37 per cent of your NTI, subject to the annual CPF limit. 

Use the CPF MediSave Contribution Calculator to estimate what you'd owe based on your age and income.

For example, if you're 30 years old with an NTI of $40,000:

The rate goes up as you get older, so your actual figure will differ.

Plug your numbers into the CPF MediSave Contribution Calculator to see exactly what you owe.

5. Things most home business owners find out too late

These aren't the obvious tips. 

They're the ones that tend to come up six months in, when someone realises they've been leaving money on the table or doing something they didn't have to.

Your home utilities are partially claimable as a business expense

If you use a portion of your home for work-say, a dedicated corner or spare room-you can deduct a proportionate share of electricity, internet, and phone bills from your taxable income. 

If 20 per cent of your home is used for business, 20 per cent of those bills becomes a legitimate IRAS deduction. 

Most first-timers don't know this and leave it unclaimed.

Accountancy fees are tax-deductible too

Paying someone to help you file your taxes or manage your books reduces your taxable income.

For many home business owners, it pays for itself — especially once your income becomes complex enough that errors get costly.

SkillsFuture credits can fund business-relevant skills, not just career ones

Digital marketing, bookkeeping, content creation, coding — all fair game. 

Most people assume SkillsFuture is for employees upskilling for a new job. Self-employed persons can use it too. 

Check what's available at SkillsFuture's course directory.

You need to keep all business records for at least five years

This is an IRAS requirement that catches a lot of home business owners off guard — invoices, receipts, client communications, bank statements, all of it. 

The five-year clock starts from the relevant year of assessment. 

If IRAS ever queries your filing, these are what you'll need.

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Voluntary GST registration below $1 million is worth considering if your input costs are high

If you're spending significantly on equipment, supplies, or services that include nine per cent GST, registering voluntarily lets you claim that GST back as input tax. 

It's not right for everyone, but worth calculating if your business involves heavy upfront purchasing. 

Once you register voluntarily, you must stay registered for at least two years, so do the sums first.

Moving home? You have 14 days to update your registered address on BizFile+

Most people don't know this is a legal obligation with ACRA, not just an admin nicety. Missing it puts you technically in breach.

Final takeaway

Singapore is one of the easiest places to start a business. 

The registration process is online and fast. The rules are clear. 

The platforms to sell, get paid, and market your work are already built and sitting in your phone.

But the groundwork? That part is on you. 

What's left is the part no guide can do for you-picking the idea, putting in the hours, and being consistent even when it's slow.

You've got it now. Go make something!

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This article was first published in MoneySmart.