Singapore vs Delaware for US Founders: Which Entity Fits Fundraising, Tax and an Asia Team

Short answer: For Singapore vs Delaware, the deciding factor is usually where your investors and your team are. A Singapore Pte Ltd suits founders who sell, hire and raise money mainly in Asia. A Delaware C corp suits founders raising from US venture funds. Founders who need both often use a Delaware parent that owns a Singapore subsidiary.

Singapore vs Delaware is one of the first structural questions a US founder faces once part of the business moves to Asia. The choice decides which tax system taxes your profit first, which filings you owe every year, and how easily investors can put money in. This guide works through three scenarios: operating only in Asia, raising from US investors, and a Delaware parent with a Singapore subsidiary. US points are kept general, so check them with a US tax adviser before you act.

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.

Singapore vs Delaware: what is the real difference for a US founder?

The real difference is which country taxes your operating profit and which investors find the company familiar.

A Delaware C corporation (a US company taxed separately from its owners) is a US taxpayer on its income, at the 21% federal rate plus any state taxes. A Singapore private company limited by shares (Pte Ltd) is taxed in Singapore at the 17% corporate income tax rate on its chargeable income.

A US citizen or green-card holder stays a US taxpayer personally whichever company they choose. So the useful question is which structure matches where the money and the people are.

How do a Singapore Pte Ltd and a Delaware C corp compare side by side?

The two entities differ most on tax rate, local officer rules and annual filings. The table sets out the founding-stage points.

Which entity fits if your customers and team are only in Asia?

If you sell and hire mainly in Asia and are not raising from US funds, a standalone Singapore Pte Ltd is usually the simpler choice. You get one tax system for the operating business, a 17% headline rate and Singapore’s exemption schemes.

A new company that meets IRAS’s conditions can claim the start-up tax exemption (SUTE) for its first three Years of Assessment (YAs, the year in which income is assessed). The exemption is 75% on the first S$100,000 of normal chargeable income and 50% on the next S$100,000, a maximum of S$125,000 exempt each YA. To qualify, the company must be incorporated in Singapore, be tax resident in Singapore for that YA, and have its shares held directly by no more than 20 shareholders, where all are individuals or at least one individual holds at least 10% of the ordinary shares. Companies whose principal activity is investment holding, and property developers, are excluded. Our guide to the start-up tax exemption covers the conditions in more detail.

Two points catch US founders out. First, Singapore tax residence depends on where control and management is exercised, which IRAS says is usually where the board meets to make strategic decisions. A board that decides everything from California may cost the company its Singapore residence and SUTE. Second, you still have personal US reporting for a Singapore company you own; see our article on Form 5471 for a Singapore company.

Do US investors need a Delaware C corp?

Often, yes. US venture funds commonly ask for a Delaware C corp because their documents, legal advisers and fund terms are built around it. In that case Delaware is usually the parent company, even if most of the work happens in Asia.

A Delaware parent pays US federal tax at 21% on its own taxable income, plus any state taxes, and files its Delaware franchise tax report for the prior year on or before 1 March. SAFEs and convertible notes are then usually issued by the Delaware company. For the Singapore-law equivalents, see our guide to convertible notes and SAFEs in Singapore.

A Delaware-only structure with staff in Singapore is risky. It may create a taxable presence (a permanent establishment) here and leaves you without a local employer, so most founders add a Singapore subsidiary.

How does a Delaware parent with a Singapore subsidiary work?

The dual structure gives US investors a Delaware company and the Asia team a Singapore employer. It is the common answer for founders who need both, but it brings two sets of filings and intercompany paperwork.

The Singapore subsidiary is a separate Pte Ltd owned by the Delaware parent. It pays 17% Singapore tax on its own chargeable income. Because its only shareholder is a company, it will not normally meet the SUTE shareholder condition, so it usually relies on the partial tax exemption instead: 75% on the first S$10,000 and 50% on the next S$190,000 of normal chargeable income, a maximum exemption of S$102,500 each YA.

When the subsidiary pays dividends to the Delaware parent, Singapore deducts no withholding tax. How the US then treats that income is a question for your US tax adviser. Other payments to the parent, such as royalties, interest or technical service fees, can attract Singapore withholding tax, so plan intercompany charges early. Our step-by-step guide to setting up a foreign subsidiary in Singapore walks through incorporation.

The subsidiary still needs its own Singapore officers. ACRA requires at least one ordinarily resident director, meaning a Singapore citizen, permanent resident or an eligible pass holder such as an Employment Pass holder, and a company secretary appointed within six months of registration. If no one on the team qualifies yet, a nominee director can fill the role; see our article on the resident director requirement under section 145. If you plan to relocate staff, our associated agency at singaporeemploymentagency.com handles work pass applications.

Is there a Singapore-US tax treaty that prevents double tax?

No. Singapore and the United States do not have a comprehensive double tax agreement (DTA). The IRAS list of DTAs shows only two arrangements with the United States, both in force: a limited DTA and an exchange of information arrangement.

The limited DTA was concluded and entered into force on 28 July 1988, and covers only income from the international operation of ships and aircraft. Relief from double tax between the two countries therefore depends on each country’s domestic rules, such as foreign tax credits, rather than a treaty. This is one of the main reasons to take US tax advice before you settle on a structure.

What is a Delaware flip, and what does it involve on the Singapore side?

A Delaware flip is a restructuring in which the founders swap their shares in an existing Singapore company for shares in a new Delaware company, so the Delaware company becomes the parent. It usually happens shortly before a US fundraise.

The US tax treatment of the swap is the part that most needs specialist advice, so check it with a US tax adviser first. On the Singapore side, the steps typically look like this:

1. Agree the new group structure and share exchange terms with your US counsel and investors.
2. Prepare share transfer forms and board and shareholder approvals for the Singapore company.
3. Pay Singapore stamp duty on the share transfer, which IRAS charges at 0.2% of the higher of the purchase price or the value of the shares transferred.
4. Update the company’s statutory registers, including the register of registrable controllers, and make the ACRA filings for the change in shareholders.
5. Review the Singapore tax effects. After the flip the company’s shareholder is a corporation, so SUTE usually falls away. A change in shareholders can also affect the carry-forward of unutilised losses under the shareholding test.
6. Put intercompany agreements in place between the Delaware parent and the Singapore subsidiary.

Where the flip involves investor rights or contested terms, speak to a lawyer before signing.

What does each structure cost to run each year?

Running costs come from statutory filings, local officer rules and tax returns in each country. A dual structure roughly doubles the compliance load.

Since 20 October 2026, under the second phase of the Corporate and Accounting Laws (Amendment) Act 2025, a company filing its annual return must confirm that the officer particulars ACRA holds are accurate and say whether anyone acts as chief executive officer.

Raffles Corporate Services publishes its Singapore fees on its packages page: incorporation from S$450, the Annual Corporate Package at S$600 a year (including a named company secretary and annual return filing), a registered office at S$200 a year, and nominee director services from S$2,000 a year with a S$3,000 refundable deposit. A S$250 compliance check fee applies to non-resident entities, such as a Delaware parent. Our free tools help estimate deadlines and costs.

Frequently asked questions

Can a US founder set up a Singapore Pte Ltd from overseas?

Yes. ACRA requires foreigners to engage a corporate service provider to register the company. The company still needs at least one ordinarily resident director and a company secretary, which a provider can arrange if no one on your team qualifies.

Does a Singapore subsidiary of a Delaware company qualify for the start-up tax exemption?

Usually not. SUTE requires the shares to be held by individuals, or by at least one individual holding 10% or more. A subsidiary wholly owned by a company normally relies on the partial tax exemption instead.

Does Singapore tax dividends paid to a US parent?

No Singapore withholding tax applies to dividends, and one-tier dividends from a Singapore resident company are not taxed again in Singapore. US tax on the dividend is a separate question for a US tax adviser.

Should I set up Delaware first or Singapore first?

If a US fundraise is near, many founders set up Delaware first and add a Singapore subsidiary, avoiding a later flip. If US funding is uncertain, starting in Singapore costs less, though a flip may follow.

Last reviewed: 23 October 2026. The Editorial Team, Raffles Corporate Services.