Short answer: An Indonesian founder can own 100% of a Singapore private company, but the company needs at least one director who is ordinarily resident in Singapore, a local company secretary and a Singapore registered office. Many founders put a Singapore holding company over an Indonesian PT, and the Singapore-Indonesia tax treaty then caps Indonesian withholding tax on dividends, interest and royalties.
Setting up a Singapore company for Indonesian founders turns on three decisions made before filing with ACRA (the Accounting and Corporate Regulatory Authority): who will be the resident director, whether the Singapore company will hold the Indonesian business or trade itself, and whether the structure will qualify for treaty benefits. This guide covers each, plus the registered office rules in force since 20 October 2026 and banking.
Key facts at a glance
- Section 145(1) of the Companies Act 1967: every Singapore company needs at least one director ordinarily resident in Singapore.
- ACRA fees: S$15 for a name application (name held for up to 120 days) and S$300 to register. Minimum share capital is S$1.
- A company secretary must be appointed within six months of registration and cannot be the sole director.
- The Singapore-Indonesia tax treaty was concluded on 4 February 2020, entered into force on 23 July 2021 and has effect from 1 January 2022.
- Treaty caps on Indonesian tax: 10% on dividends to a company owning directly at least 25% of the payer (15% otherwise), 10% on interest, and 10% or 8% on royalties.
- Since 20 October 2026, a registered office no longer has to be open to the public for minimum hours each business day.
- Singapore corporate tax is a flat 17%, and one-tier dividends are not taxed again in the shareholder’s hands in Singapore.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
Can an Indonesian founder own 100% of a Singapore company?
Yes. An Indonesian individual or an Indonesian company can hold every share in a Singapore private company limited by shares.
What changes is the company type. ACRA describes an exempt private company as having up to 20 shareholders, all individuals. If an Indonesian PT (perseroan terbatas, the Indonesian limited company) will hold shares, the company is instead a private company limited by shares, which can have up to 50 individual or corporate shareholders. Decide this before reserving the name, because the entity type reserved must match the type registered.
The company must also disclose its registrable controllers (the individuals who ultimately own or control it) and the nominator behind any nominee director or shareholder. Our guide to registering a Singapore company as a foreigner covers remote incorporation in more detail.
Which holding structure suits an Indonesian founder with a PT?
Most founders choose between a Singapore holding company that owns an Indonesian PT and a Singapore operating company that trades in its own right. Some combine both roles in one entity.
| Structure | Typical use | Points to check |
|---|---|---|
| Singapore holding company over an Indonesian PT | Regional fundraising, holding intellectual property or several subsidiaries, one cap table for investors | Treaty access depends on Singapore tax residence; a passive, foreign-owned holding company may not obtain a certificate of residence |
| Singapore operating company | Regional sales, procurement, contracts with customers outside Indonesia | Profits taxed in Singapore at 17%; pricing of dealings with the Indonesian side; risk of a taxable presence in Indonesia if staff there conclude contracts for it |
Indonesian rules on foreign ownership of a PT and on reporting offshore holdings are outside this article; confirm them with an Indonesian notary or tax adviser before PT shares move. For the Singapore-side reasons to use a holding company, see our article on Singapore holding company structures.
Who can be the resident director of a Singapore company for Indonesian founders?
The resident director must be ordinarily resident in Singapore: a Singapore citizen, a permanent resident, or a foreigner who meets the local residency rules, such as a work pass holder living here. A founder living in Indonesia does not qualify.
- Relocate on a work pass. A founder who moves here on an Employment Pass or EntrePass, issued by the Ministry of Manpower (MOM), can usually act as resident director. ACRA tells pass holders to check with their pass issuer first. Our sister site singaporeemploymentagency.com explains the pass options.
- Appoint a trusted Singapore citizen or permanent resident, who carries the full legal duties of a director.
- Use a nominee director supplied by a corporate service provider (CSP). On incorporation, the nominee must tell the company they are a nominee and give the nominator’s details.
The requirement continues after incorporation. Under section 145(5), a director cannot resign if that would leave no resident director. Under section 145(10), if the company carries on business without one for more than six months, a shareholder who knows this can become liable for company debts contracted in that period. See our article on what a nominee director costs.
What does the Singapore-Indonesia tax treaty cap?
The Singapore-Indonesia double tax agreement (DTA) caps the tax the source country can charge on payments to a beneficial owner resident in the other country. It replaced the 1990 agreement from 1 January 2022.
| Payment from Indonesia to a Singapore resident | Treaty position | Article |
|---|---|---|
| Dividends, recipient company owns directly at least 25% of the payer’s capital | Capped at 10% of the gross dividend | 10(2)(a) |
| Dividends, all other cases | Capped at 15% | 10(2)(b) |
| Interest | Capped at 10% | 11(2) |
| Royalties for copyright, patents, trade marks, designs, secret formulae or processes | Capped at 10% | 12(2)(a) |
| Royalties for industrial, commercial or scientific equipment, or information on such experience | Capped at 8% | 12(2)(b) |
| Branch profits tax on a permanent establishment | Capped at 10% of after-tax profits | 10(6) |
| Gain on selling unlisted PT shares | Generally taxable only where the seller is resident, unless the shares derive over 50% of their value from Indonesian immovable property and the seller owns at least 50% | 13(4), 13(6) |
Article 28 adds a principal purpose test: a benefit is denied if obtaining it was one of the principal purposes of an arrangement, unless granting it fits the treaty’s object and purpose. Article 23(2) lets a Singapore company owning at least 10% of an Indonesian company claim credit for the underlying Indonesian tax, not just the withholding tax, where Singapore taxes the dividend.
To get treaty rates, Indonesia’s Directorate General of Taxes requires the recipient to complete the Form DGT, certified by its home tax authority, and give it to the Indonesian withholding agent. For a Singapore company, IRAS (the Inland Revenue Authority of Singapore) must therefore accept that it is Singapore tax resident. The treaty text is on the IRAS website.
Will the Singapore holding company get a certificate of residence?
Only if its control and management are exercised in Singapore. IRAS issues the certificate of residence (COR) that supports treaty claims.
IRAS states that foreign-owned investment holding companies with purely passive or only foreign-sourced income are generally not Singapore tax resident. A company is foreign-owned if 50% or more of its shares are held by foreign-incorporated companies or by individuals who are not Singapore citizens, tested at the ultimate holding company level. An Indonesian-owned holding company falls within this.
IRAS may still issue a COR if strategic decisions are made in Singapore, for example at board meetings held here, and the company also has one of the following:
- a Singapore-based director in an executive position who is not a nominee director;
- a key employee, such as a CEO, CFO or COO, based in Singapore; or
- management by a related company based in Singapore.
This is the main trap: a nominee director satisfies the Companies Act but does not count for this IRAS test. If the plan relies on the 10% rate on PT dividends, budget for real substance here. See the IRAS COR page and our article on the certificate of residence.
How are dividends from the Indonesian PT taxed in Singapore?
A PT dividend received in Singapore can be exempt under section 13(8) of the Income Tax Act 1947 if all three conditions in section 13(9) are met. Otherwise it is taxable at 17%, with credit for Indonesian tax.
- The income was subject to tax where it came from. IRAS accepts either the withholding tax on the dividend or the underlying tax paid by the PT, and audited accounts of the payer can serve as evidence.
- The highest corporate tax rate there is at least 15% when the income is received. Indonesia’s Directorate General of Taxes states a standard corporate rate of 22%.
- The Comptroller of Income Tax is satisfied that the exemption benefits the Singapore company.
When the Singapore company pays the founder a dividend, Singapore’s one-tier system applies and Singapore does not tax the shareholder. How Indonesia taxes an Indonesian-resident founder on it is a matter for Indonesian advice.
What changed for the registered office on 20 October 2026?
The second phase of the Corporate and Accounting Laws (Amendment) Act 2025 commenced on 20 October 2026 and removed the rule that a registered office must be open to the public for minimum hours each business day. The address must still be in Singapore.
A person wishing to inspect company records must now give reasonable notice, after which the company must make them available for at least two hours on each relevant business day. A change of address must still be filed within 14 days. For a founder with no Singapore premises, a CSP’s registered office remains the practical answer. See the ACRA announcement and our registered office transition checklist.
What should Indonesian founders expect when opening a corporate bank account?
Expect due diligence on every director, shareholder and controller, and questions on where funds from Indonesia come from. Prepare a short business plan, source-of-funds evidence for the initial capital with translations of Indonesian documents, and the full ownership chain down to individuals. Timelines vary by bank and profile; our guide to opening a corporate bank account in Singapore explains why applications stall.
How do you incorporate the company, and what does it cost?
ACRA requires foreigners to engage a CSP to register a business. Raffles Corporate Services incorporates within 1 business day of receiving complete documents, subject to compliance checks.
- Choose the structure and the shareholder (the founder or the PT).
- Arrange the resident director.
- Complete the CSP’s due diligence on every director, shareholder and controller.
- Reserve the name with ACRA (S$15).
- Register on Bizfile (S$300) with the constitution, registered office, financial year end, share capital and controller details.
- Appoint a company secretary within six months.
- Open the bank account and pay in the share capital.
- If treaty benefits matter, plan Singapore board meetings and executive substance before the first PT dividend.
| Item | Fee | Frequency |
|---|---|---|
| ACRA name application | S$15 | One time |
| ACRA company registration | S$300 | One time |
| RCS Incorporation of Company Package | S$450 | One time |
| RCS compliance check: non-resident individual / non-resident entity / work pass holder | S$400 / S$250 / S$80 | Where required |
| RCS Annual Corporate Package | S$600 | Annually |
| RCS Registered Office Package | S$200 | Annually |
| RCS nominee director service | From S$2,000, plus S$3,000 refundable deposit | Annually |
RCS fees are as published on our packages page on 24 October 2026; accounting, tax and audit are separate. Our free tools help estimate set-up costs and track deadlines.
Frequently asked questions
Can an Indonesian citizen be the only director of a Singapore company?
Only while ordinarily resident in Singapore, for example living here on a work pass. A founder living in Indonesia needs another director who meets the residency test.
Can my Indonesian PT be the shareholder?
Yes. The company is then a private company limited by shares, and the PT’s ultimate individual owners must be identified as registrable controllers.
Does Singapore tax me when the company pays me a dividend?
No. One-tier dividends are not taxed again in Singapore. Indonesia may tax you under its own rules.
Is a nominee director enough to claim the treaty rate on PT dividends?
Often not. IRAS does not count a nominee director when assessing a foreign-owned investment holding company for a certificate of residence.
Must my registered office still be open three hours a day?
No. That rule was removed on 20 October 2026, but records must be available for inspection for at least two hours on each relevant business day after reasonable notice.
Need help with this?
Raffles Corporate Services can handle the ACRA filings, compliance documentation and records for you, and where court proceedings or legal advice are needed, we work with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice.
Email: [email protected]
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Last reviewed: 24 October 2026. The Editorial Team, Raffles Corporate Services.