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Singapore does not offer an offshore company in the tax-haven sense. A foreigner forms a normal Singapore private company. It pays 17% corporate tax, needs at least one local resident director and must be registered through a corporate service provider. Checked against ACRA and IRAS pages.
SingaporeCompanySetupGuide.com is not a government body or a provider. It is a guide that earns a referral fee when a provider takes on a request sent through its form.
What does "offshore company" mean in Singapore?
People use the phrase for three different things. Search results for it are mostly marine and oil firms, software outsourcing lists and provider ads, so it helps to be exact.
| What people mean | How it works in Singapore |
|---|---|
| A tax-free shell | Not available. A Singapore company is taxed at a flat 17% of chargeable income. |
| A company owned by foreigners and trading abroad | Allowed. It needs a local resident director and a registered Singapore office. |
| A Singapore company earning only foreign income | Allowed. Tax depends on whether the income is received in Singapore and on residency. |
What are the setup rules for a foreign-owned company?
ACRA states the rules in two places.
- A CSP is compulsory for foreigners. Foreigners must engage a corporate service provider to reserve a name and register a business.
- A local resident director. Every company needs at least one director who meets the local residency rules. That can be a Singapore citizen, a permanent resident or a holder of one of three MOM passes (Employment Pass, Personalised Employment Pass, Overseas Networks and Expertise Pass), subject to MOM's rules.
- A registered office in Singapore. It must be a Singapore address, open to the public during normal business hours.
- A company secretary. Appointed within six months of registration.
ACRA's fees are S$15 for the name and S$300 to register. Providers add their own fees. The full sequence is on the foreign founder registration page.
Can you use a nominee director?
ACRA says directors cannot treat the job as passive. All directors carry the legal duties, whether they are active or not. Its page lists penalties of up to a S$5,000 fine, up to two years in jail and a ban of five years. Providers do offer resident directors to foreign owners. Read nominee director before you sign one, because the person on the register is legally responsible.
How is income from overseas taxed?
IRAS taxes income that is accrued in or derived from Singapore, or received in Singapore from outside. Capital gains are not taxed. The table shows how common situations come out.
| Situation | IRAS treatment |
|---|---|
| Foreign income from a business carried on in Singapore | Taxed when it accrues, even if the cash stays abroad |
| Foreign income that does not arise from a Singapore business, kept abroad | Generally taxed only when remitted to Singapore |
| Foreign income reinvested overseas | Taxed once the sale proceeds are brought back (administrative concession) |
| Foreign dividends, branch profits and service income of a resident company | Exempt if all three tests below are met |
For that last row, IRAS wants proof that foreign tax was paid, a foreign top rate of at least 15% and its own satisfaction that the exemption helps the company. Hold the paperwork for 5 years. The tax computation also has to show foreign income that was remitted and income that was not. Small-company reliefs and the filing calendar sit on corporate tax.
Can the company be a non-resident for tax?
Maybe, but not by choice of paperwork. IRAS decides residency by where control and management sit, which usually means where strategy is decided. A virtual board meeting counts as held in Singapore if at least half the directors, or the chairman, are physically here.
Residency matters because only resident companies get the foreign income exemption and the Certificate of Residence for treaty claims. IRAS says foreign-owned investment holding companies with only passive or foreign income are generally not treated as residents. Take written advice on your own facts.
What must the company file every year?
An overseas-facing company has the same yearly duties as any other. ACRA wants an annual return within seven months after the financial year end, at S$60, even if the company is dormant. The company prepares financial statements, and a small private company may skip the audit under audit exemption. It also files its tax return with IRAS, because ACRA states that the annual return does not replace it.
What about a bank account?
Each bank sets its own policy. This guide has no official rule on offshore-style accounts to quote, so confirm requirements with each bank. See business bank account.
Who is this route for, and who should look elsewhere?
It suits an owner who wants a real, regulated company with a Singapore address, staff or advisers and normal banking. It does not suit someone who wants no tax filings, no local director or no questions about where money comes from. Singapore requires the director, the registered office, the secretary, the yearly annual return and tax filing. If your plan is a holding structure, read Singapore holding company.
To compare providers, tell us in the form where the owners live and what the company will do. We send it to firms that register companies for foreigners and you review their replies.
Sources
- ACRA, foreigner rules: https://www.acra.gov.sg/register/business/requirements-eligibility/ (CSP rule, local resident rule).
- ACRA, directors and secretary: https://www.acra.gov.sg/how-to-guides/setting-up-a-local-company/appointing-directors-company-secretary-and-other-key-personnel (director duties, penalties, secretary within six months).
- ACRA, registration page: https://www.acra.gov.sg/how-to-guides/setting-up-a-local-company/submitting-your-application-to-acra (registered office, S$300 fee).
- ACRA, fee table: https://www.acra.gov.sg/manage/companies/service-transaction-fees/ (S$15 name fee).
- IRAS, tax rate page: https://www.iras.gov.sg/taxes/corporate-income-tax/basics-of-corporate-income-tax/corporate-income-tax-rate-rebates-and-tax-exemption-schemes (17%, start-up and partial exemption).
- IRAS, what is taxable: https://www.iras.gov.sg/taxes/corporate-income-tax/income-deductions-for-companies/taxable-non-taxable-income (received in Singapore, capital gains, concession).
- IRAS, foreign income page: https://www.iras.gov.sg/taxes/corporate-income-tax/income-deductions-for-companies/companies-receiving-foreign-income (three tests).
- IRAS, company residency page: https://www.iras.gov.sg/taxes/corporate-income-tax/basics-of-corporate-income-tax/tax-residency-of-a-company-certificate-of-residence (control and management).
