Is my Singapore company tax resident in Australia?
Singapore is a highly attractive base for international businesses, particularly those trading across Southeast Asia. With over 600,000 registered companies, its modern infrastructure, legal system, and banking environment make it a top choice. However, Singapore law requires every company to have at least one ordinarily resident director—a citizen, permanent resident, or a foreigner with specific approval to act in that role.
When business owners relocate from Singapore to Australia, they must appoint a replacement resident director to maintain compliance. Larger companies often have the resources to hire a full-time local director. For smaller or less operationally intensive companies, an external party must be engaged to serve as the resident director.
From a tax perspective, the key reference point is the Double Tax Agreement (DTA) between Singapore and Australia. The central question is whether a Singapore-incorporated company becomes taxable in Australia.
Under Article 3.1(a)(ii) of the DTA:
An Australian company is one that is either incorporated in Australia or managed and controlled in Australia.
A Singapore company is one that is managed and controlled in Singapore and not an Australian company.
Therefore, a Singapore-incorporated company can be treated as an Australian tax resident if its central management and control (CM&C) is exercised in Australia. If the company uses a nominee director in Singapore who does not exercise genuine control, it may not be sufficient to establish overseas management.
In such cases, the company is:
Taxable in Singapore at 17% (due to its permanent establishment there); and
Taxable in Australia at 30% (or 25% for base rate entities), minus a foreign income tax offset (FITO) for the tax paid in Singapore.
This results in an effective tax exposure of:
17% in Singapore, and
13% (or 8%) in Australia,
for a combined rate of 30% (or 25%).
This exposure applies annually for each year the company is deemed to be centrally managed from Australia.
If you are an Australian tax resident with a Singapore-incorporated company, it is essential to review whether the entity is still managed and controlled offshore. Where changes are needed, ONUS Directors can assist in reviewing your structure and helping you mitigate unnecessary Australian tax exposure.