Running a Home-Based Business Out of a HDB Flat
Thinking of running a business out of your HDB flat? Before you dive in, it’s important to understand what you can – and can’t – do. Whether you’re running an online marketing business or hosting tutor sessions from the comfort of your flat, there are rules that must be followed if you want to avoid getting on the wrong side of the law.
You Can’t Transform Your HDB Flat Into a Brick and Mortar Shop
While it may be okay to run an online store from your flat, running a brick and mortar shop from your living room is off limits.
The HDB prohibits the use of flats as shops for the sale of physical products, and for good reason. They’d rather not have hundreds of people walking around your building and block. The noise and parking issues would be a nuisance to neighbors.
You Can’t Turn Your Flat Kitchen into a Bakery
Running a food business in Singapore can be tricky, especially if you don’t have the resources to lease a commercial space. If you have dreams of running a custom cake shop, you may be able to get away with using your flat’s kitchen. But you can’t turn your home into a bakery.
As per HDB’s rules, your business cannot generate smoke, waste or noise that may be a nuisance to others. You can likely avoid these three things provided your business is very small – and will stay that way.
Another stipulation under HDB’s rules is that the main purpose of the flat must be residential. In other words, you can’t turn your baking hobby into a full-time job.
It may be okay to use your kitchen to bake cakes and sell them to friends and family during the holidays. However, if you plan on baking for a living, you’ll need to look into renting a commercial kitchen.
You Can Offer Tutor Services for Up to Three Students at a Time
It’s perfectly fine to offer tutoring services from your HDB flat, but you cannot run a commercial school or tuition centre. According to HDB’s rules, you can tutor up to three students at once.
Do keep in mind that even if you’re not running a commercial school or tuition centre, neighbors may complain if your flat is particularly noisy.
HDB also prohibits the use of flats for business activities that may add unnecessary vehicular or human traffic to the area.
Simply put, you can offer tutor services to a small number of students, but conducting classes of 30 or more in your flat will most certainly raise a few eyebrows and get you into trouble.
You Cannot Have More Than 2 People Working Out Of Your Flat
If your home-based business has grown to the point where you need to hire employees, don’t be overzealous when expanding your staff. The HDB only allows up to 2 non-residents to help you run the business from your flat. Roommates and spouses do not count towards the 2-person rule.
You Must Register Your Business with the ACRA and Meet HDB Requirements
In order to run your business legally out of your HDB flat, you must meet the following requirements:
- Be 18 years of age, or older
- Be the owner, tenant, authorised occupier or sub-tenant of the flat
Before you begin operations, you must also register your business with the ACRA (Accounting and Corporate Regulatory Authority), unless you are exempt under the Business Registration Act, as one of the following:
- Private Company
- Limited Liability Partnership
Home-based businesses must not:
- Involve the selling or buying of physical goods inside the flat
- Involve any form of solicitation that may be a nuisance to neighbors or the public (i.e. you cannot make door-to-door visits)
- Display any advertisements, signage or posters
- Generate noise, smells, smoke, waste or dust that may become a nuisance to residents
- Have an adverse effect on the environment or ambiance of the residential estate
- Introduce extraneous vehicular or human traffic
- Involve any unlawful, immoral or illegal activity
You Must Meet All Safety Requirements
Home-based business must also meet a set of safety requirements. For example, the FFSD (Fire Safety and Shelter Department) requires you to install:
- A single-station smoke detector
- A 2kg ABC Dry Chemical Powder fire extinguisher
The FFSD safety requirement is mandatory due to the increased risk of files, papers and office equipment in a home office.
You Must Obtain a Home Office Scheme License
The HDB allows flat-dwellers to run a home-based business provided they meet all requirements and obtain a Home Office Scheme License. The license is valid for 5 years, and costs $20 to obtain.
When submitting an application for the license, you must have SingPass and a method of payment prepared.
For a complete list of all permitted and prohibited businesses, be sure to visit the HDB’s website.