Setting up an Offshore Company in Singapore

Singapore consistently ranks as one of the world’s best countries for businesses. From its robust economy to a strong legal system and extensive global trade agreements, the city-state offers unmatched opportunities for entrepreneurs and businesses to grow. 

But what truly sets Singapore apart is its favourable corporate tax system and rate, including a territorial tax regime where foreign-sourced income can be exempt from taxation.

Whether you’re setting up a new venture or expanding your operations, this guide unpacks everything you need to know about setting up an offshore company in Singapore, from the registration steps to how to claim offshore tax benefits.

To be an offshore company in Singapore, a business entity must be incorporated in Singapore but primarily operate and earn income from outside the jurisdiction. This model may qualify for tax exemptions on specified foreign-sourced income under certain conditions, including:

• It should not conduct any business operations in Singapore during the financial year
• Its management and contract-executing personnel must be based outside of Singapore
• Its income and profits must not be earned within or remitted to Singapore.

However, to claim further benefits under Double Tax Agreements (DTA), such as reduced withholding tax rates in other jurisdictions, the company must apply for a Certificate of Residence (COR) from the Inland Revenue Authority of Singapore (IRAS). The COR confirms that the company is a Singapore tax resident, which requires that its control and management (such as board meetings and decision-making) are done in Singapore.

For example, if a Singapore-registered company generates all its income in Europe without remitting profits to Singapore, that income is not taxable in Singapore. On the other hand, a company managing its operations from Singapore while earning income abroad may not qualify as offshore but can still access DTA benefits if it meets tax residency requirements.

Singapore offers an online-only company registration process that can be completed from anywhere in the world as long as you have the following documents and information:

• SingPass ID: To access Singapore's online business registration portal, you'll require a SingPass ID to log in. Singpass is a digital identity for Singapore residents and pass holders. If you're a foreigner without a Singpass, you will have to engage a registered filing agent to assist with the process.
• A registered address in Singapore: An offshore company in Singapore must designate a physical office address as its registered address to receive legal and government correspondence. P.O. boxes are not acceptable. Companies can either rent an office space or use a virtual office service provider to fulfil this requirement.
• At least one local resident director: According to the Singapore Companies Act, a business in Singapore must have at least one director, authorised representative, general partner, or manager who is a local resident. In cases where a business does not have a local partner to fulfil this requirement, they often appoint a nominee director to the board. This nominee director represents another person or entity, ensuring compliance with legal and regulatory obligations.
• A minimum paid-up capital of SGD 1 or its equivalent in any currency.

In addition to these requirements, you must prepare a Company Constitution detailing information like the management structure, business activities, and shareholder liabilities. You’ll also need the name, residential address, ID numbers, and identification type of the proposed directors and shareholders.

No matter where your business operates, you must register the company in Singapore with the Accounting and Corporate Regulatory Authority (ACRA). This is essential, as only a Singapore tax-resident company can qualify for Double Tax Relief and other benefits.

Here are the steps to register your company.

The first step is to verify the availability of your chosen business name and then register it via BizFile+. The application costs SGD 15, and the registered name will be reserved for 120 days. Within this timeframe, the company must be established; otherwise, the reservation expires, and the name becomes open for registration by any party.

Business names are approved instantly unless there are complications requiring referral to related authorities for approval. For instance, if your proposed business name includes the words "law," it may be referred to the Legal Service Regulatory Authority. In such cases, processing times may range from 14 days to 2 months.

The primary and secondary activities of your business should be specified by selecting the most appropriate Singapore Standard Industrial Classification (SSIC) code that aligns with your intended business activity. This information is also necessary as part of the name application process.

Depending on your stated business activities in this step, your company may need to obtain business licenses and permits from the Singapore government after registration and before commencing business operations. Examples include companies in the financial services sector or the food and beverage industry. Additionally, you may need to register for Goods and Services Tax (GST).

The subsequent step involves establishing shareholders and share capital. Here are the requirements: 

• At least one shareholder, who may be local or non-resident
• Minimum paid-up capital and share capital of SGD 1
• For exempt private companies: 1 to 20 shareholders
• For private companies limited by shares: up to 50 shareholders

Corporate shareholders are not permitted in exempt private companies, but they are allowed in private companies limited by shares.

Singapore companies must appoint at least one director who is a Singapore citizen, permanent resident, EntrePass holder, or Employment Pass holder. 

There is no limit on the number of directors, but all must be qualified individuals over 18. Corporate bodies cannot serve as directors.

Singapore companies must appoint a corporate secretary within six months of incorporation. 

We recommend selecting a company secretary before incorporation, as the application will require specifics about the directors and/or company secretary. Having these details prepared in advance will help ensure a smoother process.

The company secretary: 

• Must be a natural person based in Singapore
• Must be appropriately qualified under the Singapore Companies Act. 
• Cannot be the same person as the company's sole shareholder and director.

A Singapore offshore company must have a registered address in Singapore to receive correspondence and notifications. It must be accessible to the public for a minimum of three hours every weekday during regular business hours and must not be a P.O. box.

Business owners and officers are required to submit their residential addresses, which will be part of the public record. To ensure privacy, an Alternate Address can be obtained for a fee of SGD 40, replacing the residential address on public records. However, the residential address must still be submitted to ACRA, and the Alternate Address must be accessible for official correspondence.

Once you've gathered all the information, you can submit documents and an application online via the Bizfile+ website. In this step, you will need Singpass credentials.

If approved, BizFile+ will email appointed officers (directors, shareholders, or company secretary) to endorse within 60 days. Otherwise, the application may be rejected. 

Foreigners without Singpass will have to find a registered filing agent, such as company incorporation services, to handle the submission of business name and company registration applications on their behalf. These corporate services providers typically provide comprehensive assistance, managing everything from document preparation to registration. 

Similar to a Hong Kong offshore company, registering a company in Singapore does not automatically qualify it as an offshore company, as “offshore” refers to a status rather than a specific type of company.

Here’s what you need to do to claim the tax benefits of your offshore status.

In order to claim tax benefits and avoid double taxation under Singapore's Avoidance of Double Tax Agreements with other jurisdictions, your company must obtain a Certificate of Residence (COR) from the Inland Revenue Authority of Singapore (IRAS).

The Certificate of Residence (COR) is required to confirm tax residency in Singapore, enabling the company to claim reduced withholding tax rates and other benefits under DTAs.

Registered companies can apply for a Certificate of Residence via myTax Portal, except in special cases such as partnership businesses where the company is a partner. You can apply for the COR for:

• The current calendar year
• Up to four prior calendar years
• One advance calendar year, starting from October of the current year

Note that the COR is only issued if the company’s control and management are exercised in Singapore. The IRAS will process the application within 7 working days. Once approved, you will get a digital copy of the COR through myTax digital service.

If your registered company earns income from offshore jurisdictions that qualify for tax exemption, you must provide the following information in your Corporate Income Tax Return (Form C):

1. Type and total amount of income earned
2. The country from which the income originates
3. The applicable corporate tax rate in the foreign jurisdiction
4. Proof that taxes have been paid in the foreign jurisdiction to meet the 'subject to tax' condition.

In addition to its reputable global connectivity, with a strategic location, world-class ports and airports, and free trade agreements, Singapore offers a range of benefits to businesses, such as the following.

Singapore has an excellent international reputation as a place for investment and doing business. Additionally, when you incorporate in Singapore, business entities in other countries know that they are dealing with a credible business. 

The tax benefits of setting up an offshore company in Singapore are one of the principal reasons why businesses like to set up their business there.

Singapore has low tax rates compared to other countries, notably low individual income taxes, corporate income taxes of 17%, a partial tax exemption for three years available for qualifying start-ups, and a 7% goods and services tax.

In addition, Singapore does not have a capital gains tax, and dividend tax is typically exempt. Singapore taxes income derived from business activities conducted in the country, as well as income sourced from overseas and remitted to Singapore. However, certain foreign-sourced income may be exempt, such as:

• Foreign branch profits: Profits earned by a branch of a Singapore-registered parent company from operations outside Singapore.
• Foreign-sourced dividends: Dividends received from investments in foreign entities.
• Foreign-sourced service income: Income earned by a Singapore company for services rendered to clients located outside Singapore.

Moreover, Singapore has an extensive network of Double Tax Agreements (DTA) with around 100 jurisdictions, offering reductions or exemptions on certain types of income to prevent companies from being taxed twice. Companies can also claim Foreign Tax Credit (FTC) to offset taxes paid abroad against their Singapore tax liability.

Given its business-friendly reputation, it is no surprise that the company incorporation process in Singapore is so straightforward. There are two key elements to the process: registering your company name and submitting the company incorporation online.

The streamlined process means that an offshore company can often be incorporated in Singapore in as little as two days. 

Singapore is one of the leading financial centres of the world. This means that Singapore has a variety of banks, fintech, and payment platforms that offer corporate bank accounts, multi-currency accounts, payment cards, and foreign exchange services. While many banks require that an individual be physically in Singapore to open the account, there are also business account options that do not require this. 

However, should the company maintain a Singaporean bank account and receive any income, revenues, or profits into this account, it will be subject to a corporate tax.

In Singapore, companies can have complete foreign ownership, allowing international shareholders to fully own the business. In an exempt private company, the shareholders must be natural persons. In a private company limited by shares, shareholders may also be corporate bodies (for example, the corporate trustee of a foreign trust).

While shareholders can be foreigners, at least one director must be based in Singapore and meet citizenship, residency, or visa requirements. Other directors can be based anywhere. To fulfil the local director requirement, international enterprises often appoint a professional director in Singapore, known as a ‘nominee director.’ A nominee director is a full legal director with the same powers and responsibilities as any other director.

Singapore provides strong protection for intellectual property (IP), making it an attractive hub in Asia for businesses with valuable assets such as trademarks, patents, and copyrights, particularly in the technology and creative industries. It is also a signatory to major international IP treaties, such as the U.S.-Singapore Free Trade Agreement (USSFTA), which ensures that government agencies do not grant regulatory approvals to patent-infringing products.

If you're looking to set up an offshore company in Singapore, consider Statrys. With a single fixed price, we provide everything necessary to kickstart your Singapore company, including registration filing with ACRA, providing a local nominee director and company secretary, and offering a registered address in Singapore with mail scanning and forwarding services.