To qualify for a start-up tax incentive, a company must adhere to the following conditions:
- Its shareholders must be 20 or less;
- At least one individual shareholder must own 10% of the total shares of the company;
- It must be incorporated in Singapore; and
- It must be a Singapore tax-resident.
Once a company meets all the criteria, it will enjoy the follow tax incentives:
- In its first three years of operation, the first S$100,000 taxable income in each of the year is not taxed. The next S$200,000 will have a partial exemption tax rate of 8.5 percent. Earnings beyond S$300,000 are subject to the normal 17% corporate tax rate.
- Beyond three years, the company will enjoy a 9% corporate tax rate for any taxable income not exceeding S$300,000; in excess of the said amount, the 17% corporate tax rate applies.