The Ultimate Business Owners’ Guide To The HDB Home Office Scheme

It is possible to conduct your business within the walls of your HDB flat or private property under the Home Office (HO) Scheme. 

The Home Office Scheme is a licensing program that enables individuals to establish a home office for certain small-scale registered businesses. The Housing Development Board (HDB) is in charge of this scheme if you live in an HDB flat.

Does Your Business Qualify For The Home Office Scheme? 

To qualify, you must be at least 18 years old and the authorised occupier (owner or tenant) of the property in question to be under this scheme. 

Unless your business is exempted under the Business Registration Act, you have to register your business with the Accounting and Corporate Regulatory Authority (ACRA) as a sole-proprietorship, partnership, limited liability partnership (LLP) or a private limited company before even beginning operations. 

Read Also: How To Choose The Right Legal Entity To Start A Business In Singapore

Based on your preferences, you might consider applying for a License for Home Office Scheme before registering your business with ACRA. If you plan to apply for this scheme before being ACRA-registered, remember to indicate your profile as “Individual (I am an applicant not representing any company or applying on behalf of any other people)” before you finish the application. You can later register your business with ACRA at a convenient time. 

Bear in mind that your flat must remain first and foremost a place of residence with your business use taking second place and limited to within the flat/property.

Business Activity Requirements

Ensure that your business activities are not producing any nuisance to other neighbors within the same block. For example, if your business will necessarily produce lots of noise or smoke, HDB will not approve your application.

Worse still, if your business is illegal or immoral (if you are engaging in trafficking of drugs or of prostitutes), the relevant authorities will take the necessary disciplinary actions. 

Furthermore, you are not allowed to have any signages or business-related advertisements as your property should remain essentially residential. 

You are unable to use your property as a home office or even the registered address for a society. 

Other Eligibility Criteria For HDB Home Office Scheme

Your business must follow this list of safety measures: 

  • You have to undertake the necessary safety precautions to ensure that the business activities are not risks to human lives or property.
  • You cannot exceed the normal residential limit for the structural load and consumption of electricity. 
  • You are forbidden to store or use any toxic substances or chemicals in your flat.
  • You must abide by the regulations of other government bodies and get the approvals/licenses from the relevant authorities before beginning any business activities.
  • Because items pertaining to your business (such as papers, files etc.) are fire hazards, it is compulsory for you to install a 2kg ABC Dry Chemical Powder fire extinguisher (available at DIY shops) and a single-station smoke detector (battery operated, no wiring needed; available at DIY shops) to comply with with fire safety requirements set by the Fire Safety and Shelter Department (FSSD) in your flat. 
  • The FSSD requirements for your flat are more lenient than those for commercial premises. Anyone can easily obtain the required fire extinguisher and smoke detector from a DIY shop. 

While there are no restrictions to the number of employees in your business, only 2 non-residents are allowed to work in your flat. These non-residents can be:

  • Partners
  • Shareholders
  • Directors of the business
  • Employees

This 2-person limit is in place to minimise business activities to lessen disturbance to the neighbours and to reduce the overall business impact on the residential ambience. 

Additionally, you are not allowed to use your home office flat to store, load or unload goods under the Home Office Scheme. Storing and transporting goods to and from the flat will increase the amount of human and vehicular traffic that would disrupt the residential atmosphere of your estate. 

As the property and business owner, you will pay the owner-occupied concessionary tax rate as long as you or any other co-owner primarily occupies the property.  

Permissible Businesses Allowed To Operate Under HDB Home Office Scheme

  • Accountancy services
  • Architectural services
  • Consultancy services (e.g. business, engineering, IT/ management, education etc.)
  • Design/ advertising services
  • Real estate agencies
  • Insurance/ financial planning services
  • Technology-based/ knowledge-intensive business
  • Trading office (excluding car trading office)

Businesses NOT Permitted To Operate Under HDB Home Office Scheme:

  • Beauty, hairdressing, or massage therapy services 
  • Business by building/ renovation contractors
  • Car trading business
  • Card/ palm reading or fortune telling in any form
  • Commercial school (e.g. music school, language school, tuition centre, etc)
  • Conducting of dress making/ embroidery lessons
  • Courier business
  • Food catering/ restaurants
  • Funeral chapels or homes
  • Maid/ employment agency
  • Mausoleums
  • Money lending business
  • Ophthalmic dispensary/ pharmacy/ medical/ dental clinic or veterinary medicine
  • Repair of household appliances, electrical products, footwear, etc.
  • Sales/ marketing that involves conducting seminars/ talks for large numbers of customers
  • Shops and any form of retail activity, including pet shops
  • Societies/club/associations
  • Manufacturing, preparation, or processing of products and/ or goods such as:
    • Food products
    • Beverages
    • Textiles
    • Apparel
    • Handbags
    • Footwear
    • Wood and/ or paper products
    • Pharmaceutical products
    • Soap
    • Food chemicals
    • Additives
    • Joss sticks
    • Camphor products
    • Glass
    • Plastic
    • Rubber products
    • Domestic appliances
    • Watches and clocks
    • Other related products

If your business is not permitted under the Home Office Scheme, you as the flat owner may still use the flat only for business administrative purposes, and the flat address for business registration with ACRA. You have to conduct the remaining business activities elsewhere, and forbid clients or customers from visiting your flat.  

Tap On Digital Tools To Grow Your Home-Business

Whether you have an external office space or are using your property for your Home Office, you can leverage on OCBC’s business resource hub to understand industry-specific solutions that can help your start and scale, as well as relevant content such as URA’s usage restriction on different types of properties.

Companies can also tap on this portal to better understand the government’s SMEs Start Digital Pack for grants and onboard the relevant digital tools for Accounting, HR & Payroll, Cybersecurity, Digital Transactions and Digital Marketing via your OCBC business bank account.

Read Also: Guide To Applying For The Digital Resilience Bonus (DRB) For F&B And Retail Companies

This article was first published on 16 March 2020 and has been updated.

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