Tax Residency & Special Tax Regimes

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Singapore’s tax environment is a major draw for high-net-worth individuals and family offices. The city-state imposes no capital gains tax, no estate/inheritance tax, and no tax on foreign-sourced income (if not remitted).

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Tax Residency Definition

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An individual is considered tax resident in Singapore if:

• Present in Singapore for 183 days or more in a calendar year; OR
  
• Employed or conducting business in Singapore for a continuous period over 183 days.
  
  

Tax residency does not automatically follow from PR status. Many GIP PRs maintain non-resident status, especially if physically abroad or on global assignment.

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Taxation of Income and Investments

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• Employment income sourced in Singapore is taxed at progressive rates up to 22%.
  
• Dividends from Singapore companies are tax-exempt for individuals.
  
• Foreign-sourced income is exempt unless remitted to Singapore, provided it meets certain conditions (e.g., already taxed abroad or not received through a partnership).
  
  

Singapore applies a territorial tax system, which means:

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• Offshore capital gains, crypto profits, and foreign trust distributions are not taxable if kept offshore.
  
• Remitted income must be declared and may be taxed unless exemptions apply.
  
  

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Special Regimes: Family Offices and Funds

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The Monetary Authority of Singapore (MAS) offers generous tax exemptions under:

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• Section 13O and 13U of the Income Tax Act, for qualifying funds managed by licensed family offices.
  
  • 13O requires minimum AUM of SGD 10 million, rising to SGD 20 million within 2 years.
    
  • 13U requires minimum AUM of SGD 50 million.
    
  • Approved funds enjoy tax exemption on specified income from designated investments.
    
    

Family offices must also meet local spending, job creation, and fund administration requirements. As of 2023, MAS tightened the rules to curb abuse by purely passive investors.

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Inheritance and Estate Planning

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Singapore has no inheritance or estate tax. Trusts and holding companies may be used to structure succession and intergenerational transfers, with favorable treatment compared to jurisdictions like the UK or U.S.

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Double Taxation Treaties

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Singapore maintains over 90 comprehensive tax treaties, including with:

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• China, India, Indonesia, Australia, UK, and many European nations.
  
• Treaties typically cover dividends, interest, royalties, and business income, offering reduced withholding taxes and residency tie-breaker provisions.
  
  

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Strategic tax planning should consider treaty shopping risk, controlled foreign company (CFC) rules in home jurisdictions, and substance requirements for Singapore-based entities.

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