Establishment in Singapore

IRAS | Basic Guide for New Companies The prevailing corporate income tax rate is 17%. The annual corporate income tax compliance generally includes filing of estimated chargeable income and corporate income tax return.

Unless an exemption applies, Singapore withholding tax is applicable on specified payments (e.g. interest, royalty, fees for technical services rendered in Singapore, director fees, etc.)

IRAS | Tax Obligations for Non-Resident Directors made by a person to a non-resident. The withholding tax rate depends on the nature of income.

IRAS | Withholding Tax Rates Under the one-tier system, dividends paid by Singapore tax-resident companies are exempt from income tax in the hands of shareholders and not subject to any withholding taxes either.

In general, a company will be liable to register for GST if the value of its taxable supplies in a 12-month period has exceeded or is expected to exceed S$1 million. There are certain exception rules which may apply. The taxable supplies are subject to either 9% GST (standard-rated supplies) or 0% GST (zero-rated supplies). IRAS | Do I Need to Register for GST

With effect from 1 January 2020, a company may be liable to register for GST under reverse charge if the value of the services procured or expected to be procured from overseas suppliers (i.e., imported services) which are within the scope of reverse charge exceeds S$1 million in a 12-month period and it is not entitled to full input tax credit, subject to other conditions. 

https://www.iras.gov.sg/media/docs/default-source/e-tax/gst-taxing-imported-services-by-way-of-reverse-charge-(2nd-edition).pdf

A qualifying fund in Singapore which is managed by a prescribed fund manager in Singapore and satisfies the conditions of the income tax incentive scheme is allowed to claim the GST incurred on its expenses at an annual fixed recovery rate by way of GST remission. 

In order to strengthen Singapore’s position as a financial centre and support the fund management industry, Singapore offers tax incentive schemes for investment funds (constituted offshore or in Singapore) which are managed or advised by fund managers in Singapore. Upon being granted an award by the Monetary Authority of Singapore and / or satisfaction of the prescribed conditions, such a qualifying fund is exempt from Singapore corporate tax on “specified income” derived from “designated investments” (i.e., qualifying income). In addition, the qualifying fund enjoys Singapore withholding tax exemption on interest and related payments made to non-residents and a remission on GST incurred.

Further, a concessionary corporate tax rate may also be available to the fund managers if approved by the Monetary Authority of Singapore. An overview of these schemes is provided below.

A fund manager means a company holding a Capital Market Services (CMS) licence under the Securities and Futures Act (SFA) for fund management or one that is exempt under the SFA from holding such a licence.

Offshore Fund Tax Exemption Scheme (under Section 13D of the Singapore Income Tax Act)

The Offshore Fund Tax Exemption Scheme is available to an investment fund constituted as a company which is not a tax resident of Singapore, with no permanent establishment in Singapore (other than the Singapore-based fund manager). It is also available to investment funds constituted as a trust, subject to certain conditions to be satisfied by its trustee and to individuals who are neither Singapore citizens nor tax residents in Singapore.

Under the Offshore Fund Tax Exemption Scheme, the investment fund must be managed or advised directly by a fund manager in Singapore which employs at least one investment professional in each financial year.

The Offshore Fund Tax Exemption Scheme is self-administered (i.e., no approval is required to be obtained from the Monetary Authority of Singapore) with respect to conditions prescribed under the scheme.

Each investor in the fund should qualify as a qualifying investor, failing which such investor would be subject to a financial penalty in Singapore on its proportionate share of profits in the fund. Broadly, a non-qualifying investor means a non-individual beneficial owner in the fund who is a tax resident of Singapore (or a permanent establishment in Singapore) owning 30% (50% in some cases) in the fund. The scheme prescribes aggregation rules to be applied with respect to investments made by associates in a fund. The fund manager is required to undertake reporting obligations to the investor for them to assess whether they qualify as a qualifying investor or not.

Resident Fund Tax Exemption Scheme (under Section 13O and Section 13OA of the Singapore Income Tax Act)

The Resident Fund Tax Exemption Scheme is available to an investment fund incorporated as a company or a Variable Capital Company (VCC) which is a tax resident in Singapore, as well as a Singapore limited partnership vehicle.

An investment fund intending to rely on the Resident Fund Tax Exemption Scheme is required to file an application with the Monetary Authority of Singapore. The grant of award is subject to the sole discretion of the Monetary Authority of Singapore.

The investment fund will be required to incur a minimum local business spending annually (the amount ranges from S$200,000 to S$500,000 depending on the fund size), among other conditions, if it intends to avail itself of the Singapore tax exemption on qualifying income.

Under the Resident Fund Tax Exemption Scheme, the investment fund must be managed or advised directly by a fund manager in Singapore which employs at least two investment professionals.

Similar to the Offshore Fund Tax Exemption Scheme, each investor in the fund should qualify as a qualifying investor, failing which such investor would be subject to a financial penalty in Singapore on its proportionate share of profits in the fund.

Enhanced Tier Fund Tax Exemption Scheme (Section 13U of the Singapore Income Tax Act)

The Enhanced Tier Fund Tax Exemption Scheme is available to all investment funds regardless of where they are set up; and its legal form (e.g. a company, a VCC, a limited partnership, a trust, etc.).

An investment fund intending to rely on the Enhanced Tier Fund Tax Exemption Scheme is required to file an application with the Monetary Authority of Singapore. The grant of award is subject to the sole discretion of the Monetary Authority of Singapore.

There is a minimum fund size requirement of S$50m which needs to be met at the point of application and at the end of every financial year. An update on this annual minimum fund size requirement is expected to be released in 2026.

The investment fund will be required to incur a minimum local business spending annually (the amount ranges from S$200,000 to S$500,000 depending on the fund size), among other conditions, if it intends to avail itself of the Singapore tax exemption on qualifying income.

The Enhanced Tier Fund Tax Exemption Scheme provides flexibility for multiple entities within the structure to apply for a single approval and comply with prescribed conditions on a consolidated basis. This may be particularly useful for master-feeder or master-feeder-special purpose vehicles (SPV) structures. The minimum fund size and minimum spending requirement will be applicable as though the structure is a single fund entity.

Under the Enhanced Tier Fund Tax Exemption Scheme, the investment fund must be managed or advised directly by a fund manager in Singapore which employs at least three investment professionals.

This scheme does not impose investment restrictions on Singapore resident non-individual beneficial owners in the fund.

Managed Accounts

The Offshore Fund Tax Exemption Scheme and the Enhanced Tier Fund Tax Exemption Scheme are also available to managed accounts, subject to satisfaction of prescribed conditions and / or approval from the Monetary Authority of Singapore, as the case may be.

Closed-end fund treatment

An investment fund which is close-ended and is applying for the Section 13O/OA/U Tax Exemption Scheme may make an irrevocable election to avail of the closed-end fund treatment which has certain benefits on meeting the economic conditions, especially in the later years.

Financial Sector Incentive-Fund Manager (“FSI-FM”)

The fund manager may apply to the Monetary Authority of Singapore to be approved under FSI-FM scheme. The grant of the award is subject to the sole discretion of the Monetary Authority of Singapore. Under the FSI-FM scheme, income earned from providing fund management activities to qualifying funds is subject to a concessionary corporate tax rate of 10% or 15%.

In 2025, the Monetary Authority of Singapore introduced new tiers of the FSI-FM scheme (0% and 5%) for newly listed fund managers and fund managers which manage investments in Singapore-listed equities.

In order to qualify, a fund manager will be required to manage a prescribed minimum amount of assets under management and must maintain a prescribed minimum investment professional headcount requirement. Further, growth projections will also be assessed by the Monetary Authority of Singapore in considering tax concession request by the fund managers. There are additional conditions required for the new tiers (0% and 5%) of the FSI-FM scheme.

Singapore resident taxpayers may be entitled to reliefs, including reduction in tax rates, under the relevant DTA signed between Singapore and the relevant country. According to the FY 2024/25 IRAS Annual Report,93 out of Singapore’s 97 comprehensive DTAs are in force as at 31 March 2025. A full list of DTAs between Singapore and its treaty partners can be accessed via this link  IRAS | List of DTAs, limited treaties and EOI arrangements.

Further guidance on the interpretation and application of Singapore’s DTAs can be found in the IRAS e-Tax Guide on Avoidance of DTAs etaxguide_Income Tax_Avoidance of Double Taxation Agreements (DTAs)_fourth edition.pdf (iras.gov.sg).

A tax payer intending to rely on a DTA will generally need to submit a certificate of residence (COR) IRAS | Tax Residence Status of a Company to the foreign jurisdiction to prove its tax residency. 

A person is subject to tax on employment income for employment exercised in Singapore, regardless of whether the remuneration is paid in or outside Singapore. Resident individuals who derive income from sources outside Singapore are not subject to tax on such income, with an exception on foreign-source income received through a partnership in Singapore. Individuals who carry on a trade, business, profession or vocation in Singapore are taxed on their profits. Foreign-sourced income received in Singapore by a non-resident is specifically exempt from tax. 

In general, individuals are resident for tax purposes if they are physically present or exercise employment (other than as a director of a company) in Singapore for at least 183 days during a calendar year. Non-resident individuals (other than as a director of a company) employed for not more than 60 days in a calendar year in Singapore are exempt from tax on their employment income derived from Singapore. IRAS | Individuals (Foreigners) Required to Pay Tax. The tax rules provide certain concessions for foreign employees.

The personal income tax rates for resident taxpayers are progressive, with the current highest personal income tax rate at 24%. IRAS | Individual Income Tax Rates