The Inland Revenue Authority of Singapore (IRAS) has released revised guidance on the Applying for a Certificate of Residence and Tax Reclaim Form.

The Certificate of Residence (COR) is a letter issued by IRAS to certify that the company is a tax resident of Singapore (i.e. the control and management of its business is exercised in Singapore) for the purpose of claiming tax benefits under the DTAs or Limited Treaties.

To obtain a Certificate of Residence (COR), a company must be a tax resident of Singapore. Generally, foreign-owned investment holding companies, nominee companies and non-Singapore incorporated companies are not eligible for a COR.

Foreign-owned investment holding companies with purely passive sources of income and receiving only foreign-sourced income are not eligible for a COR. A foreign-owned company is a company where 50% or more of its shares are held by:

  •   Foreign companies that are incorporated outside Singapore; or
  •   Individual shareholders who are not citizens of Singapore.

The ownership is applied at the ultimate holding company level.

However, IRAS may still issue a COR if these companies can show that:

  • The control and management of the company’s business is exercised in Singapore; and
  • The company has valid reasons for setting up 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 one director based in Singapore who holds an executive position and is not a nominee director; or
  •   Have at least one key employee (e.g. CEO, CFO, COO) based in Singapore.

For COR applications in respect of calendar year 2025 and after, apart from demonstrating that decisions on strategic matters are made in Singapore, the company must also:

  •     Have at least one director based in Singapore who holds an executive position and is not a nominee director;
  •     Have at least one key employee (e.g. CEO, CFO, COO) based in Singapore; or
  •     Be managed by a related company based in Singapore (e.g. the related company makes the decisions relating to the operations of the foreign-owned investment holding company or reviews the performance of the investments of the company).

The above change is to allow these companies to better substantiate that they have valid reasons for setting up operations in Singapore.