Model how splitting your export or services margin between your Indian entity and a Singapore trading principal changes your blended tax rate - and see the annual and 5-year saving. Built for Indian exporters and founders.
Cross-border transactions between related entities must be priced at arm's length. The share of margin you can defensibly retain in Singapore depends on a genuine functional analysis - what each entity actually does, owns, and risks. A typical Indian manufacturing or delivery entity retains cost-plus 8-15%.
New Singapore companies pay an effective 4.25-8.5% on their first S$200,000 of profit (SUTE, first 3 years). The standard rate is 17%. Approved Global Trader Programme companies pay a concessionary 5-10% on qualifying trading income.
Any margin split must be supported by contemporaneous transfer pricing documentation and, in India, Form 3CEB where international transactions exceed INR 10 million. A defensible structure needs a transfer pricing study, not just a calculation.
This simulator is illustrative. It does not model surcharge and cess, FSIE eligibility, dividend repatriation tax, or your specific facts. Use it to understand the mechanics, then engage a qualified CA for a real structure.
It depends on a genuine functional analysis of what each entity does. If your Indian entity manufactures or delivers and your Singapore entity holds the customer relationship, IP, and commercial risk, more margin can sit in Singapore. But the split must reflect economic reality - a Singapore entity that is just a bank account and a registered address cannot defensibly retain 60% of the margin. A typical Indian manufacturing/delivery entity retains cost-plus 8-15%, with the balance in Singapore, but your defensible split is fact-specific.
Yes, when done correctly. Using a Singapore trading entity with genuine substance and arm's-length transfer pricing is legitimate tax planning used by thousands of Indian exporters. It becomes a problem only when the pricing does not reflect economic reality (artificial profit shifting) or the Singapore entity lacks substance. Both Indian transfer pricing rules and GAAR target artificial arrangements - which is why documentation and genuine substance are essential.
No. This tool models corporate-level tax in each entity. When Singapore profits are distributed as dividends to India-resident shareholders, those dividends are taxable in India at the shareholder's slab rate (with credit for taxes paid). The Singapore structure's advantage is largest when profits are retained and reinvested in Singapore, or when the founder has genuinely relocated to Singapore. Model your full repatriation picture with a CA.