The International Headquarters (IHQ) Programme aims to encourage companies to establish or expand their global or regional headquarters in Singapore to manage, coordinate, and oversee the operations of group companies. Administered by the Singapore Economic Development Board (EDB), the IHQ Programme’s tax incentives are exclusively available to Singapore-registered companies. Typically, applicants are required to meet eligibility criteria, including being a high-quality enterprise within their respective industries and meeting standards in equity, assets, employees, and business share.

 

 

What Tax Incentives Can You Enjoy?

This tax incentive scheme benefits companies operating in Singapore to perform headquarters activities. A preferential tax rate of 5%, 10%, or 15% applies to qualifying income exceeding the entity’s baseline income. Qualifying income is derived from eligible activities, and the incentive period spans five years.

Tips: Baseline income and non-qualifying income are taxed at the standard corporate tax rate. To comply with Section 37A of the Income Tax Act, any losses incurred from qualifying activities (e.g., allowances and prescribed losses) will be considered as preferential rate losses.

 

IHQ Programme Application Criteria

5% Concessional Tax Rate Requirement

    • Carry out at least one headquarters (HQ) activity in Singapore.
    • Employ at least 18 additional skilled employees (based in Singapore) by Year 3.
    • Incur additional annual Total Business Expenditure (TBE) of at least S$8.0 million by Year 3.
    • Employ at least 30 additional skilled employees (based in Singapore) by Year 5.
    • Incur additional annual TBE of at least S$13 million by Year 5.

 

10% Concessional Tax Rate Requirement

    • Carry out at least one HQ activity in Singapore.
    • Employ at least 15 additional skilled employees (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 (based in Singapore) by Year 5.
    • Incur additional annual TBE of at least S$9 million by Year 5.

 

15% Concessional Tax Rate Requirement

    • Carry out at least one HQ activity in Singapore.
    • Employ at least 8 additional skilled employees (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 (based in Singapore) by Year 5.
    • Incur additional annual TBE of at least S$5 million by Year 5.

 

Application Process for the IHQ Programme

  1. Preparation for government discussions: Confirm the company meets the eligibility requirements, complete the IHQ application basic information form, and prepare a five-year business plan.
  2. Business plan sharing: Share the business plan with relevant government agencies. If supported, the government will invite the company to complete the relevant application forms.
  3. Submission of the application: Submit the completed forms and supporting documents.
  4. Negotiation of the incentives: The government evaluates the project quantitatively and qualitatively, while the company reviews the terms and discusses them with the government.
  5. Final approval: The government issues an offer letter with final incentive conditions and milestones. The applicant must provide documentation and data to demonstrate the feasibility of the business plan, including industry analysis, forecasts, and detailed functions.

*The approval process typically takes 2-3 months.

 

Conclusion

In summary, Singapore stands out as an ideal destination for businesses worldwide, thanks to its unique advantages. Through the International Headquarters (IHQ) Programme, the Singapore government offers substantial tax incentives and a top-tier business environment. The stringent application criteria and efficient process ensure the programme’s high-quality implementation. If you are looking for a stable, efficient, and forward-looking environment to expand your business, Singapore is undoubtedly a worthwhile choice.

 

Contact Us

If you encounter any challenges or need professional assistance with your IHQ application, feel free to contact us. Our team is dedicated to providing you with comprehensive and attentive support.