If my company does not qualify for full tax exemption, is there any other tax exemption we can get?

Companies that do not meet the qualifying conditions for SUTE would still be eligible for partial tax exemption.

Partial tax exemption is given to all companies on chargeable income of up to $300,000 as follows: 75% tax exemption on your first $10,000 of chargeable income and a further 50% exemption on the next $290,000 of your chargeable income.

Additionally there are certain industry specific and special purpose tax incentives offered under the Singapore Income Tax Act.

Are all start-up companies eligible for Start Up Tax Exemption (SUTE) even if all shareholders are foreigners?

Yes you are eligible provided the following conditions are fulfilled.

The company must not have more than 20 shareholders throughout the basis period for that Year of Assessment where:

  • all the shareholders are individuals beneficially and directly holding the shares in their own names; or
  • at least one shareholder is an individual beneficially and directly holding at least 10% of the issued ordinary shares of the company.
  • the company is not a property and investment holding company

What is the difference between a resident and a non-resident Singapore company?

A Singapore “resident” company is one for which the control and management of the business is exercised in Singapore. This means that a company which is not resident in Singapore will not be subject to its taxation system in Singapore e.g. branch office of a Foreign Company.

Because of certain benefits which are available only to a resident company, many companies chose to be become resident companies.

Some of the benefits include:

  • benefits conferred under Singapore’s vast network of Double Tax treaties
  • benefits under Singapore’s wide network of Investment Guarantee Agreements (if the company wants to invest abroad)
  • tax exemption on certain foreign-sourced incomes (dividends, branch profits and service income)
  • tax exemption schemes for Singapore companies