If a director asks for a fee to be paid through an overseas company, establish what the payment is for and who is entitled to it. Routing money to a different bank account does not, by itself, change the character of remuneration earned as a board director.
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.
IRAS’s non-resident director guidance distinguishes board remuneration from income earned in an executive capacity. The company needs the facts to assess the correct category.
Start with the appointment and approval
Identify the individual holding office, the resolution or agreement approving the payment and the period covered. Compare those records with the invoice from the overseas company. If the descriptions disagree, resolve the difference before treating the invoice as a routine service bill.
Clarify whether the payment is for board duties, executive employment, separate consulting services or a combination. One person can have more than one role, but the supporting arrangements should identify them accurately.
Example: board fees appear on a consulting invoice
A Singapore company approves an individual’s director fee and later receives an invoice from that person’s foreign consultancy for the same amount. The finance team should ask why the consultancy is invoicing and what legal basis supports the arrangement. It should not assume the heading “consultancy” settles the tax treatment.
Collect the entitlement and payment evidence
- The individual’s appointment and duties.
- The approval and remuneration terms.
- Any separate company-services agreement.
- The invoice and requested recipient account.
- The individual’s and entity’s relevant residence facts.
- Correspondence explaining any assignment or payment instruction.
Ask legal advisers to review an unclear assignment or payment arrangement. The company should understand whether payment to the nominated recipient properly discharges its obligation.
Do not substitute residence for role
The director’s location, the foreign company’s location and the Singapore company’s tax residence are different facts. Establish each where relevant. Do not assume that a meeting held overseas or payment made overseas automatically removes Singapore obligations.
If genuine separate services are supplied by a non-resident company, review them under the applicable company-payment rules. That is a distinct assessment from remuneration owed to the individual as a director.
Review the obligation before the money moves
Give the tax adviser the approval date, contractual entitlement and proposed payment timing. Determine the applicable filing and withholding treatment on the actual arrangement. A director’s request to receive the gross amount does not remove the payer’s obligations.
Keep the final assessment and reconciliation with the company’s corporate and finance records. If earlier payments used the same unclear arrangement, review those facts as well rather than assuming a current correction resolves the past.
Does a foreign-company invoice automatically make it a company service?
No. Examine the actual duties, entitlement and agreements.
Can the same director receive both board fees and employment salary?
The roles and payments require a proper distinction and assessment. Do not combine them solely for administrative convenience.
Further company tax and accounting resources
Explore our corporate tax filing guide, bookkeeping error checks and related-party transaction guidance.
Get help reviewing the tax file
For company accounting or tax advice, email Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Our accounting team and tax advisers can review your circumstances. Where contractual or other legal advice is needed, advisers from our associated law firms can assist.