Singapore: Singapore as International Headquarters

Companies that set up or expand their global or regional headquarters activities of managing, coordinating and controlling business activities for a group of companies in Singapore, can apply for the International Headquarters Award “IHQ”.

An IHQ is eligible for concessionary tax rates of 5%, 10%, or 15% on qualifying income arising from qualifying activities for a qualifying period of five years. The details of the concessionary tax rate are as follows:

1. Concessionary tax rate of 5%

• Carry out any of the headquarters’ activities in Singapore
• Employ at least 18 additional skilled employees, all of whom shall be based in Singapore by Year 3
• Incur additional annual Total Business Expenditure (TBE) of at least S$8 million by Year 3
• Employ at least 30 additional skilled employees, all of whom shall be based in Singapore by Year 5
• Incur additional annual TBE of at least S$13 million by Year 5

2. Concessionary tax rate of 10%

• Carry out any of the headquarters’ activities in Singapore
• Employ at least 15 additional skilled employees, all of whom shall be based in Singapore by Year 3
• Incur additional annual TBE of at least S$5.5 million by Year 3
• Employ at least 25 additional skilled employees, all of whom shall be based in Singapore by Year 5
• Incur additional annual TBE of at least S$9 million by Year 5

3. Concessionary tax rate of 15%

• Carry out any of the headquarters’ activities in Singapore
• Employ at least 8 additional skilled employees, all of whom shall be based in Singapore by Year 3
• Incur additional annual TBE of at least S$3 million by Year 3
• Employ at least 13 additional skilled employees, all of whom shall be based in Singapore by Year 5
• Incur additional annual TBE of at least S$5 million by Year 5

Qualifying headquarters activities only include the following: 

• Management, coordination and control functions of business activities for the group 
• Sourcing and procurement 
• Supply chain management 
• Marketing control and planning 
• Human resource management 
• Provision of legal services 
• Provision of finance services 
• Provision of brand management services

TBE comprises remuneration for employees working in Singapore and other expenses incurred in Singapore (i.e. paid to contracting parties in Singapore). It excludes expenses outside Singapore, capital investments, depreciation, and expenditure on raw materials, components and packaging.

Skilled employees mean “Managers”, “Professionals”, “Associate Professionals and Technicians” or “Skilled Production Craftsmen” as defined by the Singapore Standard Occupational Classification.

Singapore has implemented a Domestic Top-up Tax on profits of group entities operating in Singapore if their effective tax rate is less than 15%. This will apply to multinational enterprise groups with annual group revenue of €750 million or more in at least two of the four preceding financial years. For avoidance of doubt, IHQ companies are not precluded, and applicants should assess the implications accordingly.

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Reference/Citation

International Headquarters Award IHQ | Singapore Economic Development Board | https://www.edb.gov.sg/content/dam/edb-en/how-we-help/incentive-and-schemes/factsheets/IHQ%20Factsheet.pdf 

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