Singapore: Country and Foreign Investment
Investments by Foreigners
Foreign companies that manage their headquarters activities out of Singapore under the International Headquarters Award can benefit from a lower corporate income tax rate of 10% or less (compared to the standard rate of 17%). Companies that manage their Asia-Pacific headquarters activities out of Singapore under the Regional Headquarters Award pay corporate income tax of 15%. Both awards are subject to a number of conditions, such as Singapore-based personnel.
Companies incorporated in Singapore and engaging in international or regional trading, procurement, distribution and transportation of approved commodities can apply for the renewable five-year or non-renewable three-year Global Trader Programme. Such companies can benefit from reduced corporate income tax of 10% on qualifying income, subject to conditions.
Where an activity is not carried on in Singapore on a large enough scale, and it is in the public interest for it to be carried on, the Economic Development Board of Singapore may grant pioneer status to such an activity. Firms carrying on that activity are then entitled to tax relief for up to 15 years. Similarly, there is a development and expansion incentive with tax relief for up to 10 years. The relief in both instances includes tax exemption on certain dividends.
Under an incentive introduced in the 2010 Budget, individuals (known as “angel investors”) who invest at least SGD100,000 (capped at SGD500,000 per year) in a qualifying start-up business can benefit from a tax deduction of 50% of the investment at the end of the second year of holding the investment.
High net worth foreign individuals with net personal assets of at least SGD20m can obtain permanent residence status in Singapore, and thus benefit from Singapore’s personal income tax rates of up to 20%, by either:
- Investing at least SGD5m of financial assets with a financial institution regulated by the Monetary Authority of Singapore (MAS), or
- Investing at least SGD3m of financial assets with a financial institution regulated by the MAS, plus at least SGD2m in properties purchased for residential purposes.