What is the Singapore Certificate of Residence (COR)?
The Singapore Certificate of Residence is a document issued by IRAS or the Inland Revenue Authority of Singapore attesting to a company’s tax residency in Singapore. It can be used to claim tax benefits under Double Taxation Agreements (DTAs) or Limited Treaties established with other jurisdictions.
Tax residency determines a company’s tax obligations in its operating countries. A Singapore tax resident company may be liable for taxes in the foreign jurisdiction where it earns income. The Singapore Certificate of Residence is proof of tax residency and enables businesses to access tax provisions outlined in the DTAs or Limited Treaties.
Does My Company Need a Singapore Certificate of Residence?
If you’re operating a company in Singapore, it may require a Singapore Certificate of Residence which serves as proof that your business is a tax resident in the country.
Tax residency is determined by factors such as the management and control of your company’s operations within Singapore, local supplier or customer relationships, physical or virtual office presence, local staff presence, and contribution to CPF and employee taxes. These factors establish tax substance and qualify your company as a tax resident of Singapore.
How to Apply for Singapore Certificate of Residence for Companies
Applying for a Singapore Certificate of Residence for companies is a straightforward online process. Here’s a step-by-step guide:
- File the Singapore Certificate of Residence application via the myTax portal, unless specific circumstances require an alternative approach.
- Apply for the Singapore Certificate of Residence for the current calendar year and up to four previous calendar years.
- Ensure that the management and control of your company’s business are exercised in Singapore during the designated calendar year.
- Refer to the user guides provided by IRAS for detailed instructions based on your user category.
- Submit your application and allow IRAS 7 working days for processing.
- Access the digital copy of the approved Singapore Certificate of Residence through “View Notices/Letters – Corporate Tax” on the myTax portal.
- If your company has selected email notifications as the preferred notice preference, expect an update via email within 1 to 3 working days.
- For companies with paper notices preference, the approved Singapore Certificate of Residence will be mailed to your registered address within 4 working days.
Companies Eligible to Apply for Singapore Certificate of Residence
A Singapore Certificate of Residence is granted to companies that are considered tax residents. However, not all companies are eligible for this certification. Let’s explore the categories of companies that can apply for a Singapore Certificate of Residence:
Foreign-Owned Investment Holding Companies
A COR is typically not eligible to foreign-owned investment holding firms that only receive income from overseas sources and have passive sources of income. These businesses are those whose stockholders own at least 50% of their shares in foreign corporations formed outside of Singapore or in non-Singaporean individuals.
There are exceptions to this rule, however, if the company can show that its business is controlled and managed in Singapore, and there are valid reasons for establishing an office in Singapore.
This includes demonstrating that decisions on strategic matters are made in Singapore (e.g. by showing IRAS that their Board of Directors’ meetings are held in Singapore). The company must also have related companies in Singapore that are tax residents of Singapore or have business activities in Singapore; receive support or administrative services from a related company in Singapore; have at least 1 director based in Singapore who holds an executive position and is not a nominee director; or have at least 1 key employee (e.g. CEO, CFO, COO) based in Singapore.
Nominee Companies
Nominee companies are not eligible for a Singapore Certificate of Residence because these businesses do not own the income received from the DTA partner. These businesses hold shares as custodians on behalf of the beneficial owners.
A beneficial owner is a person who ultimately owns or controls a company or asset. A nominee company is a company that holds shares or assets on behalf of another person.
Non-Singapore Incorporated Companies
Companies that are not Singapore-incorporated are not eligible for a Singapore Certificate of Residence since they are not managed or controlled there. This also holds for foreign corporations’ Singapore branches, which are managed and owned by their parent companies abroad.
While the norm is that a company must be incorporated in Singapore to obtain a Certificate of Incorporation (COR), IRAS may issue one in exceptional circumstances if the company’s business is controlled and managed in Singapore and there are valid reasons for not incorporating it in Singapore.
Variable Capital Companies
A variable capital company or VCC must be a tax resident of Singapore to obtain a Singapore COR. The umbrella level of a VCC determines the tax residence of the sub-funds. The VCC, not the sub-fund, must submit a Singapore Certificate of Residence application, and will include information about both the VCC and sub-fund.
Benefits of Owning a Singapore Certificate of Residence as a Company
Obtaining a COR for your company brings valuable advantages that significantly impact your business operations. Here are the key benefits:
Avoidance of Double Taxation
With a Singapore Certificate of Residence, you can take advantage of the avoidance of DTAs signed with foreign jurisdictions. This allows for tax breaks on earnings generated from those jurisdictions, eliminating the burden of double taxation and streamlining your tax obligations.
Tax Exemptions on Foreign Profits
Holding a COR makes your company eligible for tax exemptions on foreign branch profits, dividends, and foreign-sourced income. This reduces your overall tax liability and increases your financial efficiency.
Access to DTA Benefits
Companies with COR can access favorable tax treatment under DTAs established with other countries. Royalties, dividends, and interest are all subject to reduced withholding tax rates. Leveraging your COR maximizes tax benefits and enhances international business activities.
Start-Up Tax Exemption
Start-up companies with a COR can benefit from a tax exemption scheme. Once approved by the IRAS, your company can enjoy significant tax savings during the initial phase, boosting your financial stability.
How We Can Help – Our Taxation Service
At Premia TNC, our taxation service is designed to provide comprehensive assistance to companies in Singapore, including support in obtaining and leveraging the Singapore Certificate of Residence. With our team of experienced tax professionals, we offer tailored solutions to navigate the complexities of tax regulations and maximize your benefits.
Our services include guiding you through the COR application process and ensuring accurate documentation, and timely submission. We specialize in tax planning and optimization, developing strategies to minimize tax liabilities and maximize savings by leveraging available deductions, exemptions, and incentives.
Take advantage of our expertise and schedule a FREE consultation with our tax professionals at Premia TNC today. Discover how we can help optimize your tax position and navigate the complexities of Singapore’s tax landscape.
Singapore Certificate Of Residence – Frequently Asked Questions
1. Can branches of foreign companies obtain a Singapore Certificate of Residence?
No, Singapore branches of foreign companies are not eligible for a Singapore Certificate of Residence. These entities are not considered residents as they frequently follow the directives of foreign parent firms or shareholders. They do not meet the criteria for Singapore tax residency.
2. Can my business request a duplicate Singapore Certificate of Residence?
Yes, your business can request duplicate certificates. Mytax.iras.gov.sg allows you to print a free copy of your Certificate of Incorporation (COR). There is no need to submit another application. However, if you need a hard copy of the duplicate, you can request one from IRAS for a fee.
3. Can my business ask IRAS for a certified true copy of the Singapore Certificate of Residence to submit to foreign tax authorities to make a DTA benefit claim?
In most cases, wet-ink stamping or certification is not required for DTA partners to accept the digitally produced and signed Singapore Certificate of Residence from IRAS. The Singapore Certificate of Residence, issued on IRAS letterhead and electronically signed by the competent authority of Singapore, is sufficient for receiving DTA benefits. Requests for a wet-ink stamp or true copy certification on Singapore Certificates of Residence that have already been issued are not accepted by IRAS.
