Singapore IHQ Award 2026: Tax Rates, Headcount and Spending Thresholds

The International Headquarters Award (IHQ) is a tax incentive administered by the Singapore Economic Development Board (EDB). A company that runs group management, coordination and control functions from Singapore, and commits to adding skilled staff and local spending, can apply to have that income taxed at a concessionary rate of 5%, 10% or 15%. Singapore’s standard corporate income tax rate is 17%.

The IHQ suits groups that already operate in several markets and plan to centralise regional or global management in Singapore. This guide is based on EDB’s current IHQ factsheet (Version 3.0). It covers the three rate tiers, the income the concession applies to, who cannot apply, and what an awarded company must do over the five-year period.

Key takeaways

• The IHQ taxes qualifying headquarters income at 5%, 10% or 15%, against the 17% standard rate.
• The 15% tier, the most accessible, requires 8 additional skilled employees and S$3m more in annual Singapore spending by Year 3, rising to 13 employees and S$5m by Year 5.
• Only qualifying income above a base, set by the previous 36 months of profit, gets the lower rate.
• Awarded companies report progress to EDB every year. A breach can lead to termination and recovery of benefits.
• Groups with revenue of €750 million or more are topped up to a 15% effective rate under Singapore’s Domestic Top-up Tax.

1. What the IHQ Award is

• Approving body: EDB receives and approves applications. Awarded companies still file annual tax returns with the Inland Revenue Authority of Singapore (IRAS).
• Framework: The IHQ is a headquarters award under the Development and Expansion Incentive (DEI), granted under the Economic Expansion Incentives (Relief from Income Tax) Act 1967.
• Who applies: An entity registered and operating in Singapore.
• How it works: A concessionary rate applies to qualifying income above a base amount, for a five-year qualifying period.
• Other names: The market often calls this the regional headquarters (RHQ) incentive. EDB’s current factsheet uses the IHQ name, and this guide follows it.

2. The three tiers and their thresholds

All three tiers require the company to carry out at least one qualifying headquarters activity in Singapore (see Section 4). The tiers differ in how many additional skilled employees and how much additional business spending the company commits to.

Rate	Additional skilled employees by Year 3	Additional annual TBE by Year 3	Additional skilled employees by Year 5	Additional annual TBE by Year 5
5%	18	S$8.0m	30	S$13m
10%	15	S$5.5m	25	S$9m
15%	8	S$3m	13	S$5m

Source: EDB, International Headquarters Award factsheet, Version 3.0. TBE means Total Business Expenditure.

Notes:

• “Additional” is measured against the last financial year. The employment base is the headcount reported in the EDB Sub Form. The TBE base is the expenditure reported in the EDB Core Form.
• Both milestones count. The company must meet the Year 3 and Year 5 conditions.
• Numbers alone don’t decide the award. EDB also assesses qualitative factors, including spin-offs to the Singapore economy and the commitment to grow capabilities such as technology, skills and know-how locally.

Each step down in rate requires a noticeably larger team and budget in Singapore.

3. Which income the concession covers

The concessionary rate applies only to specific income. Everything else is taxed at 17%.

Qualifying income

Income derived from the qualifying headquarters activities.

Only income above the base gets the lower rate

• The base is the annual average net profit before tax from qualifying activities over the 36 months before the incentive starts.
• Base income and non-qualifying income are taxed at the normal corporate rate.
• Losses from qualifying activities (unabsorbed allowances, losses or donations) are treated as concessionary rate losses under Section 37A of the Income Tax Act.

Cost centre headquarters

A cost centre headquarters provides services to related companies and is reimbursed at cost plus a mark-up.

• Qualifying income is limited to the management and service fees computed on that cost-plus basis.
• The base income rule doesn’t apply.
• The award covers the mark-up only. To bring in other income streams, the company must file a fresh IHQ application, which applies prospectively once approved and uses the DEI base income rule.

Simplified example

This example shows the calculation logic only. It ignores partial tax exemption and other rules.

A headquarters holds a 10% award. Its base is S$2m, and its qualifying income for the year is S$5m.

Portion	Amount	Rate	Tax
Within base	S$2m	17%	S$340,000
Above base	S$3m	10%	S$300,000
Total	S$5m		S$640,000

At 17% on the full S$5m, tax would be S$850,000. The award saves S$210,000 that year. Profit the headquarters was already earning stays at the normal rate, and the concession applies to the growth above it.

4. The eight qualifying headquarters activities

The factsheet lists eight activities. Carrying out any one of them in Singapore for the group meets the activity requirement.

1. Management, coordination and control of business activities for the group
2. Sourcing and procurement
3. Supply chain management
4. Marketing control and planning
5. Human resource management
6. Legal services
7. Finance services
8. Brand management services

5. How skilled employees and TBE are defined

Skilled employees

• Defined under the Singapore Standard Occupational Classification (SSOC) as Managers, Professionals, Associate Professionals and Technicians, or Skilled Production Craftsmen.
• Each must be based in Singapore, which the factsheet defines as being a Singapore tax resident. There is no nationality requirement.

Total Business Expenditure (TBE)

• Included: remuneration for employees working in Singapore, and other expenses paid to contracting parties in Singapore.
• Excluded: expenses outside Singapore, capital investment, depreciation, and raw materials, components and packaging.

6. Who cannot apply

The following entities are not eligible:

• Entities on sanctions lists maintained by the Singapore Government, or controlled or owned by listed individuals, entities or countries
• Entities engaged in activities that are illegal under Singapore law
• Entities that make, distribute, sell, import or export goods or technology regulated under Part 1 of the Schedule of the Strategic Goods (Control) Order (commonly known as military goods and technology) or under the Arms and Explosives Act
• Entities that make, distribute, sell, import or export tobacco products, and related activities
• Entities under investigation or prosecution for, or with a history of, corruption, fraud, anti-competitive conduct or other regulatory breaches
• Financial institutions licensed by the Monetary Authority of Singapore (MAS), including banks, fund managers and capital market players, and licensed insurers, unless MAS refers them
• Ship owners, operators and shipping-related service providers regulated by the Maritime and Port Authority of Singapore (MPA), excluding ports and shipyards, unless MPA refers them

EDB may rely on external service providers to check eligibility. It can revoke or terminate the award if the entity falls into any of these categories during the incentive period.

7. Obligations over the five years

After approval, EDB issues a Letter of Award (LOA) setting out the conditions. The awarded company must:

• Keep separate accounts for any non-qualifying activity during the incentive period.
• Report every year by submitting an Annual Progress Update (APU) in EDB’s format and/or an external auditor’s report on progress against the conditions.
• Support information exchange by completing a form, if required, that lets IRAS carry out Spontaneous Exchange of Information (SEOI) with other tax authorities. A template comes with the LOA.
• Seek approval to exit. A request to terminate the award needs EDB’s approval, and the award stays in effect until EDB notifies the outcome.

If the company breaches any LOA condition, EDB can terminate the award and recover the benefits already received.

8. Groups with revenue of €750 million or more

Singapore has implemented a Domestic Top-up Tax (DTT). It applies to multinational groups with annual group revenue of €750 million or more in at least two of the four preceding financial years. Where such a group’s Singapore entities have an effective tax rate below 15%, the shortfall is topped up.

The IHQ factsheet states that companies receiving EDB incentives are not excluded, and applicants should assess the impact themselves.

The 15% tier has applied since 17 February 2024, when it was added in Singapore’s Budget 2024. In EY’s November 2024 analysis, the lowest concessionary rate may no longer be as attractive for in-scope groups, and companies may combine tax incentives with cash grants and Refundable Investment Credits (RIC).

For an in-scope group, a 5% or 10% award still ends at a 15% effective rate after top-up, so the larger commitments those tiers require may bring no extra tax saving. Groups below the threshold aren’t subject to the DTT.

9. How to apply

Formal application

• Core Form: projected additional employment, fixed asset investment and TBE.
• Supplementary Form: details of skilled employment and headquarters activities.

Assessment

EDB weighs the quantitative conditions in Section 2 against the qualitative merits of the project. Approval comes as an LOA. The company then claims the concessionary rate on qualifying income in its annual tax filing.

Our practical checklist

Before submitting, have these ready:

1. A group structure chart showing the Singapore entity and its related companies in each country
2. The qualifying activities the Singapore headquarters will perform, and which related companies it will serve
3. A five-year hiring plan mapped to the Year 3 and Year 5 milestones of the target tier
4. A five-year TBE budget, counting Singapore spending only
5. The sources of qualifying income and how they’re priced, including the mark-up method for a cost centre headquarters
6. A base income calculation covering the 36 months before the incentive starts

10. Frequently asked questions

Does the concessionary rate apply automatically once a company is incorporated in Singapore?

No. The company must apply to EDB. The rate applies only after approval and acceptance of the LOA.

Do employees need to be Singapore citizens or permanent residents?

The factsheet requires employees to be Singapore tax residents. It sets no nationality requirement, so work pass holders who qualify as tax residents can count.

What happens after five years?

The IHQ runs in five-year qualifying periods. EDB’s DEI brochure indicates that an extension may be considered if the company commits to further expansion. Any extension is subject to EDB’s approval.

What if the company misses its headcount or spending targets?

A breach of LOA conditions allows EDB to terminate the award and recover benefits already received. Commitments should reflect what the company can realistically deliver.

Can a fund management company apply?

Fund managers licensed by MAS are in an excluded category unless MAS specifically refers them.

Our view

The IHQ fits groups that already operate in two or more markets and intend to move management functions to Singapore in substance. The application is the starting point. The five years of hiring, accounting and annual reporting decide whether the award is kept.

In practice, that work spans several areas. Hiring involves work passes and tax residency. Separate accounts and cost-plus pricing involve accounting and tax. The annual progress update draws on both. The related companies the headquarters manages also sit in other countries, and those entities need to be set up and maintained on the ground.

Jenga Anderson handles these areas within one in-house team, covering IHQ application preparation, Singapore entity setup, work pass applications, payroll, accounting and tax, and ongoing compliance. Through Anderson Global’s 15 offices worldwide, we also help groups set up and maintain related entities in other markets.

If you’re assessing a Singapore headquarters, or want to know which tier fits your group, our team can carry out an eligibility review.

---

About Jenga Anderson Global

Jenga Anderson Global is an institutional-grade corporate services platform based in Singapore and the Asia-Pacific strategic execution hub of Anderson Global. We hold ACRA Corporate Service Provider (CSP), MOM Employment Agency (EA), CPA and Accredited Tax Advisor credentials. Our in-house team covers cross-border structuring, corporate secretarial, accounting and tax, HR, family office (13O/13U) setup, fund formation and fund administration.

Contact: Jenga Anderson Tax & Structuring Team

This article is general information and does not constitute legal, tax or investment advice. Tax treatment depends on each company’s circumstances. Refer to current EDB and IRAS publications for the latest position.