Singapore: Legal and Tax Regimes for Foreign Business Entities

On this Page:

- SINGAPORE FORMS OF OPERATION
- SINGAPORE TAX TREATMENT OF OPERATIONS OF FOREIGN BUSINESS ENTITIES
- SINGAPORE TAXATION OF FOREIGN EMPLOYEES
- SINGAPORE EXCHANGE CONTROL
- SINGAPORE EMPLOYMENT AND RESIDENCE

Singapore Singapore Forms of Operation

Foreign business entities can use the following forms:

BACK TO TOP

Singapore Tax Treatment of Operations of Foreign Business Entities

See Domestic Corporate Taxes for the general principles of Singapore corporate taxation, which also generally apply to foreign business entities.

Note that branches located in Singapore do not qualify for tax and other incentives available to Singapore businesses; moreover, the parent company remains liable for a branch’s debts or losses. However, registering a subsidiary as a limited liability company enables the subsidiary to have access to the same tax and other incentives as are available to Singaporean companies, as well as removing any obligation on the parent as regards a subsidiary’s debts and losses.

International and regional headquarters located in Singapore can benefit from reduced corporate income tax rates of 10% and 15% respectively, compared to the standard tax rate of 17% (see Singapore Investments by Foreigners). There are also reduced corporate income tax rates and exemptions available to companies involved in shipping and maritime activities (see Singapore Ship Management and Maritime Operations).

Qualifying foreign investment funds that are managed by a Singapore-based fund manager are tax exempt on gains, dividends, profits and interest from designated investments such as stocks, shares and bonds. For these purposes, a qualifying foreign investment fund is one that does not have a presence in Singapore; is in the form of companies, trusts or individual accounts; and is not 100% beneficially owned by Singapore-resident investors (whether individuals or companies) or by non-residents’ Singapore-based permanent establishments.

BACK TO TOP

Singapore Taxation of Foreign Employees

The income tax rate for expatriates’ employment income is either 15% or the relevant resident tax rate, whichever produces the highest sum. Directors’ fees, consultation fees and most other income are taxed at 20%, which is generally withheld at source.

Tax clearance must be sought from the Inland Revenue Authority of Singapore (IRAS) where a foreign employee ceases to work for the company, is posted to work in an overseas location, or plans to leave Singapore for a period of more than three months. Certain exemptions from this requirement apply, where the foreign employee:

The employer must withhold all moneys owed to the foreign employee until clearance is given by the IRAS, or after 30 days from the date the IRAS receives notification from the employer, whichever is earlier.

BACK TO TOP

Singapore Exchange Control

There are no foreign exchange controls in Singapore. Payments, capital transfers and remittances can be made in any currency and to any country without prior approval.

BACK TO TOP

Singapore Employment and Residence

For details of employment and residence matters in Singapore, see Country and Foreign Investment: Singapore Entry and Residence.

BACK TO TOP

FREE Updates

View our Privacy Policy

Newsletter Archive [More]
- Lowtax Update 24th May 2012
- Lowtax Update 17th May 2012
- Lowtax Update 10th May 2012
- Lowtax Update 3rd May 2012
- Lowtax Update 26th April 2012
- Lowtax Update 19th April 2012

Manage your mailing list preferences here.

Network Tweets