Your company is a tax resident of Singapore when its control and management is exercised in Singapore.
On this page:

Control and Management

Under Singapore tax law, the tax residency of a company is determined by where the business is controlled and managed. The residency status of a company may change from year to year.

Generally, a company is considered a Singapore tax resident for a particular Year of Assessment (YA) if the control and management of its business was exercised in Singapore in the preceding calendar year. For example, a company is a Singapore tax resident for YA 2023 if the control and management of its business was exercised in Singapore for the whole of 2022.

A company is a non-resident when the control and management of its business is not exercised in Singapore.

'Control and management' is defined as the making of decisions on strategic matters, such as those concerning the company’s policy and strategy. Where the control and management of a company is exercised is a question of fact.

Usually, the location of the company's Board of Directors meetings where strategic decisions are made determines where the control and management is exercised. Under certain scenarios, holding Board of Directors meetings in Singapore may not be sufficient and IRAS will consider all facts provided by the company to determine if the control and management of the business is indeed exercised in Singapore.

Factors considered by IRAS include the following:

  • Whether there is any board of directors' meetings held in Singapore
  • Whether any strategic decisions are made at the board of directors' meetings held in Singapore
  • Whether the directors are based in or outside Singapore
  • Whether any strategic decisions are made by the local director in Singapore
  • Whether there are key employees based in Singapore

The place of incorporation of a company is not necessarily indicative of the tax residency of a company.

A Board of Directors meeting which involves the use of virtual meeting technology will generally be regarded as having strategic decisions made in Singapore if either of the following conditions is met: 

  • At least 50% of the directors (with the authority to make strategic decisions) are physically in Singapore during the meetings; or
  • Chairman of the Board of Directors (if the company has such an appointment) is physically in Singapore during the meeting. 
Virtual meeting technology means any technology that allows a person to participate in a meeting without being physically present at the place of meeting.

 

Foreign-Owned Investment Holding Companies

Foreign-owned investment holding companies1, with purely passive sources of income or receiving only foreign-sourced income, are generally not considered tax residents of Singapore because these companies usually act on the instructions of its foreign companies/ shareholders.

However, they may still be treated as Singapore tax residents if they can satisfy certain conditions.

1A foreign-owned company is a company with 50% or more of its shares held by:

  • Foreign companies which are incorporated outside Singapore; or
  • Individual shareholders who are not citizens of Singapore.

The ownership is to be applied at the ultimate holding company level. 

Non-Singapore Incorporated Companies and Singapore Branches of Foreign Companies

Non-Singapore incorporated companies and Singapore branches of foreign companies are controlled and managed by their foreign parent. They are not considered tax residents of Singapore.

However, they may still be treated as Singapore tax residents if they can satisfy certain conditions.

Companies whose tax residency status may be affected by the travel restrictions due to COVID-19 can refer to COVID-19 Support Measures and Tax Guidance For Businesses for more information.

How Tax Residency Affects Corporate Income Tax

While tax resident and non-resident companies are generally taxed in the same manner, tax resident companies enjoy certain benefits, such as:

Certificate of Residence

The Certificate of Residence (COR) is a letter issued by IRAS to certify that the company is a tax resident of Singapore for the purpose of claiming tax benefits under the DTAs that Singapore has concluded with other jurisdictions. It is generally required by the foreign tax authority to prove that the company is a Singapore tax resident.

Learn how to apply for a COR.

Related Content