Running a Malaysian Team from Singapore: What the Singapore Company Must Get Right (2026)

Published: 8 October 2026 · Last reviewed: 14 October 2026 · Reviewed by Ray Tay, Co-Founder & Managing Director, VIVOS PTE. LTD. (ACRA Filing Agent FA20240323 · MOM EA Licence 24S2425)

A Singapore company running a team through a Malaysian subsidiary must get three things right: how it receives Malaysian dividends, how it invoices the subsidiary, and who holds which work pass.

Dividends: 0% Malaysian withholding; exempt in Singapore under section 13(8) when taxed in Malaysia, whose 24% headline rate clears the 15% test (IRAS).
Fees charged to the subsidiary: 10% Malaysian withholding, 5% under the treaty, on the part performed in Malaysia (PwC, reviewed 16 June 2026).
Transfer pricing documentation: required above S$10 million gross revenue; from YA 2026 related-party services up to S$2 million per category are exempt (IRAS).
Singapore EP: S$5,600 a month, S$6,000 for new applications from 1 January 2027. Malaysian EP: from RM5,000 since 1 June 2026.

This is the Singapore-side companion to our Episode 2 guide, Singapore HQ, Malaysia Team: How the Structure Works (2026), in VIVOS Group’s Two Jurisdictions, One Team series. Watch the explainer on YouTube.

Are dividends from a Malaysian subsidiary taxed in Singapore?

Usually not. Section 13(8) of the Income Tax Act exempts foreign-sourced dividends received by a Singapore resident company if the income was subject to tax in the source country, that country’s headline corporate rate is at least 15%, and IRAS is satisfied the exemption is beneficial. Malaysia does not withhold tax on dividends, but the subsidiary’s own corporate tax counts as underlying tax, and Malaysia’s headline rate is 24%. There is no minimum shareholding. Declare the exemption in the tax return and keep dividend vouchers and Malaysian notices of assessment in case IRAS asks (IRAS e-Tax Guide, Tax Exemption for Foreign-Sourced Income). More in our guide to foreign-sourced income in Singapore.

How should the Singapore company invoice the Malaysian subsidiary?

Under a written intercompany agreement, at an arm’s-length price. On management or technical fees, the subsidiary withholds 5% under the treaty (10% without it) on the part performed in Malaysia and pays LHDN within one month. Give the subsidiary your IRAS certificate of residence so the treaty rate applies. Singapore relieves double taxation on treaty-country income through a foreign tax credit, subject to conditions (PwC Worldwide Tax Summaries, Singapore).

IRAS requires transfer pricing documentation where gross revenue exceeds S$10 million, or where it was required the previous year. From YA 2026, related-party service transactions up to S$2 million per category (S$1 million before) are exempt, as are routine support services charged at cost plus 5% (IRAS Transfer Pricing Guidelines, 7th edition, 14 June 2024). Malaysia applies its own rules under section 140A, so both companies should tell the same pricing story.

Who should hold a Singapore EP and who a Malaysian EP?

Each pass follows the local employer, so decide where each person works. A Singapore Employment Pass needs at least S$5,600 a month (more for older candidates), rising to S$6,000 for new applications from 1 January 2027 and renewals expiring from 1 January 2028, plus the COMPASS points test (MOM). A Malaysian Employment Pass needs a contract with the Malaysian company and a basic salary of at least RM5,000 a month (RM20,000 for Category I); salary paid outside Malaysia does not count. See our video on the 2027 EP change.

What changes when the RTS Link opens?

Commuting, mostly. LTA targets passenger service at the end of 2026 on the 4 km link from Woodlands North to Bukit Chagar in Johor Bahru: about five minutes, with immigration cleared once at departure (LTA factsheet, 11 January 2024). Treat the date as a target; tax and work-pass rules do not change with the train.

Frequently asked questions

Do I pay Singapore tax on dividends from my Malaysian Sdn. Bhd.?

Usually not. They can be exempt under section 13(8) because the profits were taxed in Malaysia and Malaysia’s 24% headline rate is above 15%.

Does the Singapore company need transfer pricing documentation?

Only if its gross revenue exceeds S$10 million (or documentation was required the year before), and not for service transactions within the S$2 million per category exemption from YA 2026.

What is the Singapore Employment Pass salary from 1 January 2027?

S$6,000 a month for new applications in most sectors (S$6,600 in financial services), with higher amounts for older candidates.

When does the Johor Bahru–Singapore RTS Link open?

LTA’s target is the end of 2026. Check LTA for the confirmed date.

Related: Malaysia-side checklist · two-jurisdiction structures hub. Book a free consultation at vivos.com.sg/contact-us or WhatsApp +65 8827 7870.

Facts checked 5 October 2026; reviewed by Ray Tay, VIVOS. General information, not tax advice. VIVOS PTE. LTD. · UEN 202416468C · ACRA Registered Filing Agent FA20240323 · MOM EA Licence 24S2425 · 14B Stanley Street, Singapore 068733.