How to qualify for a Certificate of Residence (COR) in Singapore

INTRODUCTION

A Certificate of Residence (COR) issued by the Inland Revenue Authority of Singapore (IRAS) is an essential document for companies looking to claim tax treaty benefits under Singapore’s Double Tax Agreements (DTAs). To qualify for a COR, a company must be considered a Singapore tax resident, which IRAS determines based on the location of control and management of the company and other key factors.

This article outlines the key factors that IRAS considers when assessing whether a company qualifies as a Singapore tax resident.

1. Location of Control & Management

The primary test for tax residency is whether the company’s control and management is exercised in Singapore. IRAS assesses the following:

✅ Board of Directors’ Meetings in Singapore – The company should hold its board meetings in Singapore, where key business decisions are made.

✅ Strategic Business Matters – Meeting minutes should reflect discussions on corporate policies, business strategy, financial management, and overall decision-making processes.

✅ Decision-Making Authority – If major business decisions are consistently made outside Singapore, IRAS may not consider the company a Singapore tax resident.

2. Board Composition

The composition of the board of directors is another important factor:

✅ Singapore-based Directors – A company with a majority of Singapore-resident directors strengthens its tax residency claim.

✅ Foreign Directors – If most of the directors reside overseas and control decisions remotely, IRAS may question whether the company is genuinely managed from Singapore.

And one should plan the above when setting up a company in Singapore.

Learn more about best practices for directors to ensure effective corporate governance here.

3. Key Employees in Singapore

✅ Having senior executives and key decision-makers (e.g., CEO, CFO, Managing Directors) based in Singapore supports tax residency of the Singapore company.

✅ The presence of local employees handling core operations further reinforces that the business is actively managed from Singapore. Companies can apply work permit or work pass for their foreign employees so that they can increase such local presence.

4. Business Operations in Singapore

IRAS also considers whether the company has an active business presence in Singapore:

✅ Physical Office – Having a registered office or business premises in Singapore supports tax residency claims.

✅ Active Business Activities – If the company engages in trading, consulting, service-related operations or other active business operations from Singapore, it strengthens its position.

✅ Shell Companies Risk – Companies that exist only for tax treaty benefits without real operations may be denied tax residency status.

5. Investment Holding Companies

Investment holding companies, especially those that only hold passive investments (e.g., shares in subsidiaries, real estate, or financial instruments) and with a non-Singapore parent entity, may find it harder to qualify for tax residency.

✅ Active Management – If the company actively manages its investments, conducts fund management, or operates a family office, it has a better chance of qualifying.

✅ Pure Holding Structures – A company that simply holds assets without an operational presence in Singapore may not meet IRAS’s tax residency criteria.

Why is COR Important?

To benefit from the reduced withholding tax rates under the tax treaties on certain foreign sourced income (e.g. interest, dividend, royalties etc) received by a Singapore company. The Singapore company must prove that it is a Singapore tax resident by providing a Singapore Certificate of Residence to the foreign payer company. Without a COR, the foreign sourced income received by the Singapore company may be subject to higher withholding tax rates, increasing its tax burden.

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