Singapore Tax – Main Considerations

Colin Tan
Dec 23, 2025
2 min read

Incorporating a company in Singapore can be highly tax-efficient for regional and international offshore work due to the country's favorable tax regime, robust legal framework, and extensive network of double taxation treaties. Here are the key tax advantages and considerations:

1. Low Corporate Tax Rates

Headline Tax Rate: Singapore's corporate tax rate is a flat 17%, which is competitive globally.
Partial Tax Exemptions:
- Start-ups and small companies benefit from partial tax exemptions:
  - 75% exemption on the first S$100,000 of chargeable income.
  - 50% exemption on the next S$100,000.
- This effectively reduces the tax rate for qualifying companies.

2. Territorial Tax System

Singapore taxes only income derived from or remitted to Singapore. Offshore income (e.g., from international operations) is generally tax-free if it meets certain conditions:
- The income is earned outside Singapore.
- The income is not remitted to Singapore.
- The foreign income has been taxed in the country of origin (subject to specific rules).

3. No Capital Gains Tax

Singapore does not impose capital gains tax, making it attractive for holding companies, investment activities, and asset sales.

4. Double Taxation Treaties (DTA)

Singapore has over 90 DTAs with countries worldwide, which help reduce or eliminate double taxation on cross-border income. This is particularly beneficial for companies engaged in regional and international trade.

5. GST (Goods and Services Tax)

Singapore's GST rate is 9% for business exceeding stated thresholds ($1m annual revenue), but offshore services and international transactions are often zero-rated or exempt from GST, reducing the tax burden on international businesses.

6. Tax Incentives for Specific Industries

Singapore offers various tax incentives for industries such as finance, shipping, and technology. Examples include:
- Global Trader Programme (GTP): Reduced tax rates for trading companies.
- Finance and Treasury Centre (FTC) Incentive: Concessional tax rate of 8% for qualifying FTCs.
- Pioneer Certificate Incentive: Tax exemptions for new industries or activities.

7. No Withholding Tax on Dividends

Singapore does not impose withholding tax on dividends paid to shareholders, making it attractive for distributing profits to overseas investors.

8. Ease of Repatriating Profits

Singapore has no foreign exchange controls, allowing businesses to easily repatriate profits and capital.

9. Tax Compliance and Transparency

Singapore is known for its transparent and efficient tax administration, which reduces compliance costs and risks.

Key Considerations

While Singapore offers significant tax advantages, there are some factors to consider:

Substance Requirements: To benefit from tax treaties and exemptions, your company must demonstrate sufficient economic substance in Singapore (e.g., local office, employees, and operations).
Transfer Pricing Rules: Singapore adheres to OECD guidelines, requiring arm's-length pricing for cross-border transactions.

Looking to optimize your regional or international offshore operations? Singapore offers unbeatable tax advantages, a robust legal framework, and a vast network of double taxation treaties. At Headington Management, we are your one-stop corporate services partner—guiding you seamlessly through incorporation, compliance, and beyond. Let us help you unlock Singapore’s strategic benefits and streamline your global business with expert support every step of the way.