Singapore is world-renowned as a tax-efficient hub for international founders. For a foreigner starting a business in Singapore, the government provides aggressive incentives to help you reinvest in your growth. While the headline corporate tax rate is 17%, the effective rate for most startups is significantly lower.
In this guide, we break down the 2026 tax landscape, including how to save up to S$125,000 in tax and the specific tax obligations required to maintain your eligibility.
Before claiming startup-specific exemptions, you must understand tax residency. Simply having a Singapore company registration is not enough to access the best incentives. IRAS defines a tax-resident company as one where the “management and control” of the business is exercised within Singapore.
This means your key strategic decisions—such as board meetings and policy approvals—should be documented as happening locally. At Counto, we help international founders manage this by ensuring their corporate secretarial records and board resolutions reflect proper local management, protecting their eligibility for the SUTE scheme.
The SUTE scheme is the most powerful incentive for any foreigner open company in Singapore setup. For the first three consecutive Years of Assessment (YAs), qualifying companies enjoy significant relief.
The 2026 SUTE breakdown:
Total maximum benefit: S$125,000 in total tax savings over your first 3 years.
To qualify for these savings when you foreigner incorporate company in Singapore, your business must:
Note: Investment holding companies and property development businesses are generally excluded from SUTE but qualify for the partial exemption below.
If your business is an investment holding company or has already passed its third year of operation, you still automatically receive the Partial Tax Exemption (PTE):
In addition to the baseline exemptions, the Singapore government frequently issues CIT rebates to support businesses. For the 2026 Year of Assessment, companies are eligible for a rebate (typically 50% of tax payable, capped at S$40,000) to help manage operational costs. This provides an immediate cash-flow boost for anyone starting a small business in Singapore for foreigners.
Singapore operates a single-tier corporate tax system. This is a major advantage for the international entity: once your company pays the corporate tax on its profits, all dividends distributed to you as a shareholder are 100% tax-free. Furthermore, Singapore does not impose withholding tax on dividends sent to foreign shareholders.
To protect your tax-exempt status, you must meet strict ACRA and IRAS deadlines. When you register company in Singapore for foreigner operations with Counto, we handle these critical tax obligations for you:
1. Dormant years count: The three-year SUTE clock starts from the date of incorporation, not the date you start making a profit.
2. Shareholding changes: If you change your shareholding structure (for example, if a corporate entity buys out an individual founder), you may lose your SUTE eligibility. Always consult your experts before issuing new shares.
Registering your Singapore company is the first step toward building a global, tax-efficient business. By leveraging startup-specific exemptions, CIT rebates, and a network of over 90 double tax treaties, you can significantly lower your effective tax rate and reinvest those savings into your international growth.
Navigating a new tax system is easier with a partner you can truly rely on. Work with a trusted team that brings deep knowledge of Singapore’s tax landscape to your registration, ensuring you capture every exemption you deserve from the very beginning. To start your company formation, contact us here, or Book a Meeting with our Experts →
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