Tax Residency of a Singapore Company
Singapore is well known for its pro business environment, and its tax system is one of the key reasons companies are attracted to the country. Beyond its generally low corporate tax regime, Singapore offers additional tax advantages, including startup tax exemptions, sector-specific incentive schemes, and access to an extensive network of double tax treaties. However, most of these additional benefits are available only to Singapore tax resident companies. To remain tax resident and enjoy these advantages, businesses must understand how the Inland Revenue Authority of Singapore determines tax residency.
This guide explains how tax residency is determined, why it matters, when a Certificate of Residence is required, and how companies can maintain a strong residency position year after year.
Table of Contents
Key Takeaways
A company is treated as a Singapore tax resident when its control and management are exercised in Singapore.
Board meeting location, strategic decision making, and governance documentation are the main indicators IRAS reviews.
Tax residency determines access to key benefits such as tax exemption for new startups, foreign-sourced income exemption, and reduced withholding tax rates under Double Tax Agreements.
Tax resident companies can obtain a Certificate of Residence to claim reduced foreign withholding tax rates.
Residency is assessed annually and may change if strategic control shifts outside Singapore.
What Determines Corporate Tax Residency in Singapore?
A Singapore company’s tax residency is determined by whether it meets the control and management test, which evaluates where strategic decisions are made and key governance occurs.
A Singapore company is a company incorporated in Singapore (see our guide on Singapore company registration for details).
The Control and Management Test
Control and management refers to the highest level of strategic decision making. IRAS focuses on where directors meet to set policies, approve budgets, evaluate major contracts, supervise financial affairs and determine the company’s long term direction.
This test looks at the reality of decision making, not the place of incorporation or location of day to day operations. A company incorporated in Singapore can still be non-resident if decisions are made overseas.
Key Indicators Used by IRAS
IRAS examines multiple factors to determine residency, including:
- Where board meetings are physically held;
- Where directors live and make decisions;
- Whether key executives or decision makers are based in Singapore;
- Where financial oversight and corporate records are maintained;
- The location of substantive governance activities.
No single indicator determines the outcome. IRAS assesses the full evidence for the relevant Year of Assessment.
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Examples of Tax Residency Outcomes
- Resident outcome: A Singapore incorporated company holds substantive board meetings in Singapore, directors deliberate strategy locally and major decisions are documented in Singapore. IRAS treats it as a tax resident.
- Non-resident outcome: A Singapore incorporated company has directors overseas who approve budgets and contracts from abroad. Local teams handle only operational tasks. IRAS classifies it as non-resident.
What Are the Benefits of Singapore Corporate Tax Residency?
Benefits Under the Foreign-Sourced Income Exemption (FSIE)
Under the Tax Exemption on Specified Foreign-Sourced Income (FSIE) scheme, tax resident companies may enjoy exemption on qualifying foreign dividends, foreign branch profits, and foreign-sourced service income, provided they meet conditions such as the minimum 15 percent headline tax rate requirement.
This exemption prevents additional taxation when overseas profits are repatriated to Singapore. They are particularly relevant for holding companies and businesses operating across multiple markets.
Eligibility for Singapore Tax Incentives
Singapore offers several tax incentive schemes that apply only to tax resident companies. These include the Startup Tax Exemption and certain specific business incentives administered by various government agencies.
To qualify, a company must be a tax resident for the relevant Year of Assessment and meet the specific conditions of the incentive program. Tax residency strengthens the company’s eligibility for grants, credits, and reduced tax rates designed to support business growth.
Access to Double Tax Treaties
Singapore has an extensive double tax treaty network that reduces or eliminates withholding taxes on cross border payments such as dividends, interest, and royalties. Only tax resident companies can claim treaty benefits and typically must provide a Certificate of Residence to the foreign tax authority.
Treaties can significantly reduce overall tax exposure for companies operating internationally.
Unilateral Tax Credits
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Corporate Tax Residency in Singapore?
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What Is a Certificate of Residence (COR)?
When You Need a COR?
Companies usually require a COR when they receive income from a foreign jurisdiction that applies withholding tax. Foreign tax authorities often request a COR before granting reduced tax rates under a Double Tax Agreement.
Common situations include:
- Receiving dividends, interest, or royalties from overseas;
- Providing cross border services to a treaty country;
- Operating a foreign branch;
- Seeking a reduced withholding tax rate before payment is made.
A COR is issued for a specific calendar year. Because tax residency is assessed annually, companies may qualify in one year but not in the next.
Eligibility for a Certificate of Residence
Singapore incorporated companies
Foreign-owned investment holding companies
IRAS applies a stricter review for holding companies with 50 percent or more foreign ownership and primarily passive income. To qualify, the company generally must show:
- Strategic control is exercised in Singapore;
- Valid commercial reasons for establishing the company in Singapore;
- Related Singapore entities that provide support or have business activities;
- An executive director or key employee based in Singapore.
Foreign incorporated companies
How to Apply for a Certificate of Residence in Singapore?
Most companies apply via myTax Portal. IRAS typically requires basic company details, the Year of Assessment involved, and confirmation that the company is not claiming residency elsewhere.
IRAS may request supporting documents such as:
- Board resolutions or minutes showing Singapore based decision making
- Details of director roles and authority
- Explanations of the company’s operating structure and governance
Applications for Singapore registered companies are usually processed within about seven working days. Foreign incorporated companies may require additional information, and processing times are longer.
Maintaining Singapore Tax Residency: Practical Guidance
Hold Board Meetings in Singapore
Document Key Decisions Carefully
IRAS may request proof that strategic decisions were made in Singapore. Companies should keep detailed board minutes that record:
- The meeting location;
- Names of attendees;
- Substantive matters discussed;
- Decisions reached and who approved them.
Consider the Residency of Directors
Maintain Books and Records in Singapore
Ensure Consistency When Filing Annual Tax Returns
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