Finance and Treasury Centre Incentive

The Finance and Treasury Centre (FTC) incentive provides a concessionary tax rate to Singapore FTCs. This incentive is provided to attract companies to set up their treasury centres in Singapore. This articles explains the FTC incentive scheme.

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The Singapore government introduces specific schemes and incentives periodically to ensure that the country positions itself as a preferred location for carrying out business activities in specific sectors that the country targets. Administered by the Economic Development Board (EDB), the FTC incentive is designed to attract treasury centre operations. It offers low tax rates and provides a withholding tax exemption on interest payments by FTCs on loans from overseas banks, non-banking financial institutions, etc. In the Budget 2016, the Singapore government further reduced the concessionary tax rate (from 10% to 8%) and made certain enhancements to the FTC scheme.

This article will explain the tax benefits that the EDB offers to treasury centres in Singapore and the activities and services that come under the scope of this scheme.


Introduced in 1991, the FTC incentive offers a concessionary tax rate to approved FTCs on qualifying activities and services that are extended to approved network companies situated out of Singapore. In 2005, the government enhanced the scheme to include associated companies as approved network companies. The FTC was valid until March 31, 2016. However, in the Budget 2016, the scheme was extended for a period of 5 years i.e. till March 2021.

What is a Finance and Treasury Centre?

Section 43G of the Income Tax Act defines a Finance and Treasury Centre as a division or department of a company which provides treasury, investment or financial services in Singapore for its approved offices or associated companies outside Singapore.

Eligibility Criteria

To qualify for the FTC incentive the centre must fulfill the following:

  1. Have annual business expenditure of S$750,000;
  2. Employ 3 professional staff in Singapore; and
  3. Provide 3 qualifying FTC services to 3 or more approved network companies.

Tax Benefits

The following tax benefits are extended to FTCs:

  1. A concessionary tax rate of 8%* on qualifying income (i.e. income from qualifying activities and services)
  2. Withholding tax exemptions on interest on loans from overseas banks, non-banking financial institutions etc. However, FTCs must use these funds for the qualifying activities and services.

*Prior to the Budget 2016, the concessionary tax rate was 10%.

The Economic Development Board outlined the changes and enhancements to the FTC incentive that were announced in the Budget 2016

Qualifying Activities and Services

The qualifying activities and services for which the FTC incentive is applicable is outlined in the Income Tax (Concessionary Rate of Tax for Approved Finance and Treasury Centre) Regulations. The following are the qualifying activities and services.

Qualifying Activities

Qualifying activities by the FTC for which the incentive is granted include the following:

  1. Investing in shares of companies that are not incorporated in Singapore;
  2. Investing in certificate of deposits, bonds, notes issued by bank or a merchant bank;
  3. Transacting in Asian Dollar Bonds;
  4. Foreign exchange transactions with banks situated outside the country;
  5. Extending credit facilities to approved offices and associate companies.

Qualifying Services

Qualifying services by the FTC for which the incentive is granted include the following:

  1. Providing corporate finance advisory services;
  2. Providing credit administration and control;
  3. Extending credit facilities where funds are obtained from financial institutions in Singapore;
  4. Performing economic or investment research and analysis.

The above qualifying activities and services are not exhaustive. The complete list of qualifying activities and services for which an FTC can claim the incentive is listed here.


Singapore introduced the FTC incentive to encourage foreign businesses to incorporate in Singapore as a base for their finance and treasury activities. Besides the eligibility criteria and the qualifying activities and services, the Economic Development Board looks into several other factors before granting the FTC incentive. If you are looking to establish a treasury centre for your business in Singapore, it is best to get in touch with a reputable corporate services provider who can guide you through the eligibility, qualifying, and assessment criteria of the incentive.


  1. Background
  2. What is a Finance and Treasury Centre?
  3. Eligibility Criteria
  4. Tax Benefits
  5. Qualifying Activities and Services
  6. Conclusion


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