Singapore: Offshore Legal and Tax Regimes
Tax Treatment of Operations of Foreign Business Entities
See Domestic Corporate Taxation 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.