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For an Australian who owns an international or online business and is genuinely willing to relocate, Singapore offers a rare combination: a world-class place to live and work, a tax system that leaves capital gains and most foreign income alone, and a clear, well-trodden route in. Like the other relocation strategies we describe, this depends on actually moving to Singapore and making it your home. The way in, for a business owner, is to set up a Singapore company and have that company employ and sponsor you.
This guide sets out how the strategy works, who it works for, how an Australian sets up a Singapore company and obtains an Employment Pass through it, how they become a Singapore tax resident, and the issues that have to be managed to make it hold up.
The strategy in one paragraph
The relocation runs through a company. An Australian incorporates a private limited company in Singapore. That company employs the owner in a genuine role and sponsors their Employment Pass, the work visa that allows them to live and work in Singapore. With the pass granted, the owner genuinely moves to Singapore and in time becomes a Singapore tax resident. Once resident, Singapore taxes the salary the company pays at its own moderate rates, but it does not tax capital gains at all, and foreign income brought into Singapore by a resident individual is, with a narrow exception, exempt.
Who the strategy works for
The strategy works for businesses whose income is genuinely international or location-independent, rather than tied to an Australian premises or an Australian customer base. In practice that means technology and software businesses, content creators and influencers, online service, marketing and consulting businesses, intellectual property holding, and investment portfolios held through a company.
What these have in common is that the income can legitimately be earned and accumulated through a company outside Australia, and the owner can run that business from anywhere. A bricks-and-mortar Australian business does not fit, because its income remains Australian-sourced and Australian-taxed regardless of where the owner lives. An online or international business does fit, which is what makes the relocation worth doing.
Singapore is particularly well-suited to people whose wealth sits in investments and offshore holdings rather than in a local salary, because Singapore does not tax capital gains and largely does not tax foreign income received by a resident individual. It also suits those who value substance and reputation: a Singapore company and an Employment Pass are credible, mainstream and respected.
How Singapore taxes you
Singapore taxes residents on a territorial basis, and the result is favourable in three ways that matter to a relocating business owner.
First, there is no capital gains tax. Gains on shares, property and other investments are generally not taxed at all. The exception is where a person trades so frequently and systematically that the tax authority treats the activity as a business, in which case the gains are ordinary income.
Second, foreign-sourced income received in Singapore by a resident individual is exempt. Foreign dividends, interest and rent paid into a Singapore account are generally not taxed. The one carve-out is foreign income received through a partnership in Singapore.
Third, the income that is taxed, which is Singapore-sourced income including the salary the company pays the owner, is taxed at progressive resident rates that begin at zero and reach a top rate of 24 per cent, and that top rate applies only to income above one million dollars a year. For most relocating business owners the effective rate on a sensible salary is well below that.
Set against Australian marginal rates of up to 47 per cent on worldwide income, including capital gains, the Singapore position is materially better, and for someone whose return comes mainly from investments and offshore business it can be dramatically so.
The company is the visa
Singapore does not offer a general residence visa to foreign individuals. For a business owner, residence is obtained by being employed, and the cleanest way to be employed is by a company you own. This is why the strategy begins with incorporation.
An Australian can own 100 per cent of a Singapore private limited company. It is registered with the Accounting and Corporate Regulatory Authority, and incorporation itself is fast, often completed within a few days. Two requirements shape how a relocating founder sets it up. The company must have at least one director who is ordinarily resident in Singapore, and the founder will not yet hold a Singapore pass at incorporation; the standard solution is to appoint a nominee resident director through a corporate services provider, purely to satisfy the requirement, with the founder controlling the company as shareholder and being appointed a director once their own pass is granted. The company must also appoint a company secretary and hold a registered office in Singapore. The minimum paid-up capital is one dollar, although a higher figure is usually sensible where the company will sponsor the founder's pass.
The Employment Pass and the COMPASS test
The Employment Pass is the work visa for foreign professionals, managers and executives, and it is the pass a relocating business owner normally uses. The company sponsors it. A Singapore company can sponsor the Employment Pass of its own foreign founder, provided the company is a genuine operating business and the founder draws a real salary.
An Employment Pass application has to clear two hurdles. The first is a minimum salary: from 1 January 2025 the floor is S$5,600 a month for most sectors and S$6,200 for financial services, and the figure rises with the applicant's age and experience. These thresholds rise again from 1 January 2027. The second hurdle is COMPASS, a points-based test introduced in 2023, on which an applicant must score at least 40 points across criteria covering salary, qualifications, the diversity of the company's workforce and its support for local employment, with bonus points for shortage occupations and certain economic priorities.
COMPASS has a specific implication for a one-person company. A new company with a small team is given default points for workforce diversity and local employment, so the founder must earn the remaining points mainly through salary and qualifications. In practice that means setting a credible salary at or above the relevant benchmark and being able to point to strong academic credentials. A founder who cannot clear the threshold should consider the alternatives.
Two structuring points deserve attention. First, where the founder owns more than 30 per cent of the company, the immigration authority may treat them as an entrepreneur rather than an employee and steer the application toward the EntrePass; a common response is for the founder to hold a smaller stake at the time of the application and increase it afterwards, which is a matter to take Singapore immigration advice on. Second, there are alternative passes: the EntrePass, for founders of genuinely innovative or venture-backed companies, and the Overseas Networks and Expertise Pass, for individuals earning at least S$30,000 a month, which is not tied to a single employer. For most relocating Australians with a conventional services or investment business, the Employment Pass is the route.
Becoming a Singapore tax resident
Singapore's favourable treatment of residents follows from being a tax resident, so the relocation has to be real. An individual is a Singapore tax resident for a year if they are physically present or employed in Singapore for at least 183 days, and a foreigner who holds a work pass valid for at least a year is generally treated as a resident. For an Australian who moves to Singapore on an Employment Pass and genuinely lives there, residency will usually follow in the ordinary course. It is the step that unlocks the resident tax rates and the exemptions described above.
The corporate side
The company the founder sets up is itself a Singapore taxpayer. The headline corporate tax rate is 17 per cent, applied to chargeable income, but two features soften it. First, a start-up tax exemption frees a substantial part of the first S$200,000 of chargeable income from tax in each of the company's first three years, and a partial exemption applies to companies after that. Second, Singapore taxes companies on the same territorial basis as individuals: foreign-sourced income is generally taxed only when it is received in Singapore, and foreign dividends, foreign branch profits and foreign service income can be exempt even then, where the relevant conditions are met.
The company also carries ordinary compliance obligations: annual filings with the company registrar and the tax authority, proper accounts, and the corporate secretarial and accounting support that goes with running a Singapore company.
The issues that have to be managed
The strategy is sound, and it is mainstream, but it depends on four things being handled properly.
1. Ceasing Australian tax residency
The Singapore tax position only helps once the owner is no longer an Australian tax resident. While they remain an Australian resident, Australia taxes their worldwide income, including the Singapore salary and any capital gains, at rates up to 47 per cent. The departure from Australian residency must be deliberate and well evidenced, and it must account for CGT event I1, which deems a disposal of the departing resident's non-Australian-property assets at market value on the day they cease to be a resident. Australia and Singapore do have a comprehensive double tax treaty in force, which provides a tie-breaker if both countries claim a person as a resident in the transition year; that treaty is a genuine advantage over a no-treaty destination, but it reduces rather than removes the need to plan the exit carefully.
2. COMPASS, and the reality for a one-person company
The Employment Pass is not a formality. A new, founder-owned company has to clear the COMPASS points test largely on the strength of the founder's salary and qualifications, and a marginal salary or an application that does not present a genuine business is at real risk of refusal. The pass also has to be renewed, and renewal depends on the company genuinely operating and genuinely needing the founder. The business has to be real, and it has to be seen to be real.
3. Substance: the company must genuinely operate
The Singapore company should be genuinely managed and run from Singapore. If its real decision-making sits in Australia, Australia can treat the company itself as an Australian tax resident, which would pull its profits back into the Australian tax net. Genuine management substance in Singapore protects against that, supports the Employment Pass at renewal, and is consistent with the whole premise of the move: that the owner has actually relocated.
4. What is taxed, and what is not
The Singapore advantages are specific. Capital gains are untaxed and most foreign income received by a resident individual is exempt, but the salary the company pays is Singapore-sourced and is taxed at resident rates, and frequent, systematic trading can be recharacterised as a taxable business. The structure should be set up with a clear view of which income is which, so that the parts Singapore does not tax are not inadvertently brought into charge.
Is Singapore the right destination?
Singapore suits owners of international or online businesses who want a credible, well-regarded base, who value the certainty of an in-force tax treaty with Australia, and whose wealth comes substantially from investments and offshore income that Singapore will not tax. It is less suited to those who cannot meet the Employment Pass requirements, those who will not genuinely relocate, and those whose business income remains Australian-sourced.
For the right person the combination is hard to beat: a first-world city to live and work in, no tax on capital gains, foreign income largely left alone, moderate tax on local salary, and a clear route in built around a company the owner controls. The strategy rewards being deliberate. The relocation has to be real, the company has to genuinely operate, and the Australian exit has to be clean.
Cadena International advises Australians on international relocation and corporate structuring, including the Singapore strategy described here. If you are considering a move to Singapore, we can help you design and implement it. You may also be interested in our guides to relocating to Panama and the Cayman Islands.
This material is produced by Cadena International. It is intended to provide general information and opinions on legal topics, current at the time of first publication. The contents do not constitute legal advice and should not be relied upon as such.
