Many business owners who have registered their companies in Singapore may not be aware that getting a Certificate of Incorporation does not mean that your company is a“tax resident“of Singapore.
The two are two different things. Tax residency requires a separateapplicationto the Inland Revenue Authority of Singapore (IRAS) for adocumentcalled COR(Certificate of Tax Residence).
Fortech companies with physical operations in Indonesia,like our client,L,this certificate is not an optionality, but a key tool for compliant tax planning and cost reduction.
[Client Background
CompanyLis a Singapore-incorporated technology company whose main business is to provide technology solutions for the Indonesian market. They initially thought that completing the company registration would automatically entitle them to Singapore’s tax treaty network.
It was not until they approached us that they realized that without aCOR, their Indonesian subsidiary would not be able to apply the tax treaty benefits when paying dividends, interest or royalties to their Singapore headquarters and could face up to10-20%withholding income taxon the Indonesian side.
This means real profit loss.
WhyLmust apply for aCOR?
Weclearly explainedtoCompanyLthe core value ofapplying for aCOR, which was directly related to their profits:
1、Directly reduce the tax burden of Indonesia, saving money is visible
Singaporehas signed Double Taxation Agreements (DTAs)with over90countriesworldwide, including Indonesia. Possession of aCORis theonly official proofto the Indonesian Revenue Authority thatthe Singaporean entity ofLis a“Singapore Tax Resident“.
By virtue of it,L’s withholding tax rate on dividends, interest and other income from Indonesia can be significantly reduced from the higher level of Indonesian domestic law to the preferential rate of the agreement (usually5-10%or less). The impact on profits is immediate.
2. Satisfyingthe “substantial operation“requirement and responding to global scrutiny
With the current global tax environment becoming more transparent, tax administrations in all countries are focusing on checking“shell companies“that are only registered but have no substance.TheInland Revenue Authority of Singapore (IRAS) issuesCORsbased on the sole criterion ofwhetherthe “control and management“of the companyis genuinely exercised in Singapore.
This refers to the location where the company’s high-level strategy and policy decisions are made, such as where the board of directors meets. Ourprocess ofhelpingCompanyLto apply for aCORis essentially assisting them in structuring the substance of their compliance and obtaining official recognition in Singapore, which can significantly reduce the risk of future tax audits in Indonesia or Singapore.
3. Paving the way for business expansion and financing
A company with Singapore tax resident status will be seen as a more compliant and trustworthy business entity for international cooperation, bank account opening and cross-border financing. Thislays a solid foundationforCompanyLto further expand into the Southeast Asian market in the future with Singapore as its base.
Schematic/Singapore
Second, our professional services: three steps to helpthe Lcompany to strengthen the foundation, rapid approval
CompanyL‘s situation is typical of tech companies: the initial focus was on business expansion, and theylacked experience in building thelocal“management substance“in Singapore. Our job was to provide them with a clear path and hands-on assistance.
Stage 1: Precise planning and substantive construction (1-2months before application)
We know thatthe core ofIRASaudit is theevidence of“control and management“.Therefore, we did not rush to submit the application, but helpedCompanyLtobuild a solid foundationfirst:
1. Reshaping the decision-making mechanism of the Board of Directors
We guidedCompanyLtoadjust the rules of procedure of the board of directors to ensure thatboard meetingsinvolvingkey strategic decisionssuch as the direction of business in Indonesia, budgetary approvals and important contractswere held in Singapore, and that detailed and professional minutes were produced. This wasone of the strongest pieces of evidenceofwhere the“control“was located.
2. Implementation of local management functions
We assistedCompanyLin leasing a physical office in Singapore and made it clear that it would be the management center for the Asia-Pacific region. At the same time, we advised and assisted them in recruiting a finance manager based in Singapore, who is responsible for the overall management of regional funds, so that the financial management function can actually take root.
3. Preparation of a complete chain of evidence
Weset out a list of evidenceforCompanyLand assisted them to systematically prepare it, including: Singapore office lease, local directors’ appointment documents and performance records, Singapore bank account flows, and key business documents reflecting decisions made by the Singapore head office.
Phase 2: Efficient and professionalsubmission of COR application (January2026)
After the pre-substantive work was in place, our tax expertsformally submitted theCORapplicationonJanuary7,2026, throughIRAS‘ official online system myTax Portal . In the application document, we clearly articulated:
L’s business model and organizational structure as a technology company.
How the Singapore head office“controls and manages“the Indonesian business.
The company’s physical office, personnel and decision-making mechanisms have been established in Singapore.
Thanks to the solid preparatory work and our team‘s precise graspofthe key points of theIRASreview, the application materials were logical and well-documented. This directly led to amazing efficiency:
Withinonly24hoursof the submission of the application, i.e.,on January8,2026,CompanyLwas successful in obtainingaCORapproval letter fromIRAS.
The letter clearly states,“Pursuant to yourapplication dated7January2026, it is hereby confirmed that your companyis a resident company for Singapore income tax purposes for the calendar year2026.“
Picture/Client successfully applied for Singapore COR, stolen picture will be punished!
Phase 3: Ongoing Guidance and Value Realization After Approval
The approval ofthe CORwas not the end of the road. We immediately assistedCompanyLinrealizing the value of this certification:
1. Initiation of agreement preferences
GuideL‘s Indonesia team on how tostart saving tax costs immediatelybyfiling a record with the Indonesian Tax Authoritywith thisCORapproval letter to formally apply a lower tax treaty rate on payments to Singapore.
2. Planning for long-term compliance
A CORis usually valid for one calendar year. Wecreated a simple compliance timelineforLcorporations to remind them to maintain continuity in decision-making and management to ensure a smooth renewal for the next year and continued tax benefits.
III. Results and outlook
Through our professional services,CompanyLnot only obtained a certificate but also completed a major tax structural upgrade in a very short period of time. They have made their Singapore company a veritable regional management hub in a compliant and cost-effective manner.
Lcannowmore efficiently manage the earnings of its business in Indonesia and use the tax cost savings to reinvest in technology development and marketing.
For the manytech companies, likeL, that are looking to use Singapore as a springboard to expand into Southeast Asia, this story shows:
The key toa successfulCORapplication is professional planning and pragmatic execution. It is not just filling out a form, but also an optimization of the way a company manages across borders.
*Source of reference:IRASSingapore,ACRA, synthesized from client’s oral presentation, reproduced with attribution.
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