TRW & Co · Private client and succession
Setting Up a Charity or Foundation in Singapore: IPC Status and Tax Deductions
Setting up a charity in Singapore means choosing a legal vehicle, registering with the Commissioner of Charities and, if donors need tax deductions, obtaining Institution of a Public Character status. This guide compares companies limited by guarantee, charitable trusts and donor-advised funds, and explains how IPC status and the enhanced deductions work for families and family offices.
Key pointCharity registration brings tax exemptions for the charity, but only IPC status lets donors claim deductions, and IPCs must serve the Singapore community as a whole rather than sectional groups.
At a glance
Registration is mandatory
Organisations set up for exclusively charitable purposes and carrying out charitable activities must apply to register with the Commissioner of Charities.
Charity is not IPC
Registered charities get income and property tax exemptions, but only Institutions of a Public Character can issue receipts that give donors tax deductions.
Enhanced donor deductions
IRAS allows deductions of 2.5 times qualifying cash donations to approved IPCs for local causes; this enhanced rate is time-limited and reviewed periodically.
Three common vehicles
Families usually choose a company limited by guarantee, a charitable trust or a donor-advised fund, trading control against administration and cost.
Overseas giving schemes
Separate schemes allow 100% deductions for some overseas giving, including a MAS-administered incentive for approved family office donors using local intermediaries.
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The short answer: three decisions, in order
Setting up a charity in Singapore involves three separate decisions. First, choose the legal vehicle: usually a company limited by guarantee, a charitable trust or a society. Second, register it as a charity with the Commissioner of Charities, which brings income tax and property tax exemptions. Third, decide whether to seek Institution of a Public Character (IPC) status, which is what allows donors to claim tax deductions.
The distinction between a charity and an IPC is the one families most often miss. According to the Ministry of Culture, Community and Youth, every organisation set up for exclusively charitable purposes and carrying out activities to achieve them must apply to register with the Commissioner of Charities. But only IPCs can issue tax deduction receipts, and IPC status is reserved for charities that serve the Singapore community as a whole.
For some families, a fully fledged charity is not the best first step. A donor-advised fund held with an established IPC intermediary can deliver deductible giving with far less administration. This guide compares the routes.
The legal framework: the Charities Act, the Commissioner and IRAS
Charities are regulated under the Charities Act 1994 and supervised by the Commissioner of Charities, with many charities also overseen by a Sector Administrator from the government agency responsible for their field, such as health, education or social services. The Charity Portal hosts the public register of charities and IPCs, registration applications and annual submissions.
Registered charities receive income tax exemption and property tax exemption on premises used exclusively for charitable purposes. In return, they accept regulation: governing documents, annual reporting, accounts and, depending on size and status, compliance with the Code of Governance for Charities and IPCs.
The donor side sits with the Inland Revenue Authority of Singapore. IRAS explains that cash donations to an approved IPC for causes benefiting the local community attract a tax deduction of 2.5 times the qualifying amount, and that donations to a charity without IPC status are not tax deductible.
The 250% deduction is a time-limited enhanced rate that the Government reviews periodically at Budget. When modelling the tax value of a long-term giving programme, check the current rate and its end date with IRAS rather than assuming it will continue unchanged.
Choosing a vehicle for setting up a charity in Singapore
Singapore has no separate statute for civil-law style foundations. In practice, a family "foundation" here is usually a company limited by guarantee or a charitable trust, each registered as a charity. The choice affects governance, liability and flexibility.
| Feature | Company limited by guarantee (CLG) | Charitable trust | Donor-advised fund (DAF) |
|---|---|---|---|
| How it is created | Incorporated with ACRA under the Companies Act, then registered as a charity | Trust deed, then registered as a charity | Agreement with an existing IPC intermediary that holds the fund |
| Legal personality | Separate legal entity; members' liability limited | No separate personality; trustees hold assets | None for the donor; the intermediary owns the fund |
| Governance | Board of directors; constitution | Trustees; trust deed | Donor recommends grants; intermediary decides |
| Administration | Highest: accounts, filings, board processes | Moderate to high | Lowest; handled by the intermediary |
| Route to donor deductions | Apply for IPC status | Apply for IPC status | Deduction available where the intermediary is an IPC and the gift qualifies |
| Best suited to | Operating charities, staff, programmes and fundraising | Endowments and grant-making with a settled purpose | Families starting structured giving or wanting low overhead |
A society registered with the Registry of Societies is another option, usually for membership-based groups rather than family philanthropy. Whichever vehicle is used, the governing document must confine its objects to exclusively charitable purposes for it to be registrable as a charity.
Donor-advised funds
A donor-advised fund lets a family give to an established IPC, which holds the money in a named fund and makes grants on the family's recommendation. The family gets an immediate deductible gift where the rules are met, a public or private name for the fund, and professional administration, without running a charity. The trade-off is control: the intermediary, not the family, makes the final decision on grants. Many family offices use a DAF to test their giving strategy before setting up a standalone charity. Our family offices practice advises on both.
The registration and IPC process, step by step
- Define the charitable purpose. Set out exactly what the charity will do and for whom. Purposes must be exclusively charitable; mixed private and charitable purposes cause delay or refusal.
- Choose and establish the vehicle. Incorporate the CLG with ACRA or execute the trust deed, using governing documents that meet the Commissioner's requirements for charities.
- Appoint a suitable board or trustees. Select people with relevant skills and independence. Family-only boards can work for small grant-makers but attract scrutiny for larger or IPC organisations.
- Apply to register as a charity. Apply to the Commissioner of Charities through the Charity Portal; the licence is also listed on GoBusiness. Expect questions on activities, funding, governance and conflicts of interest.
- Build a track record. Run activities, keep proper accounts and adopt the Code of Governance. IPC applications are assessed on what the charity actually does and how it is run.
- Apply for IPC status if appropriate. Show that the charity serves the Singapore community as a whole and is not confined to sectional interests based on race, belief or religion.
- Set up donation processes. Collect donors' identification numbers and submit donation records to IRAS, which grants deductions automatically from the IPC's submissions.
- Maintain compliance. File annual reports and accounts on time, manage conflicts, observe fund-raising codes and renew IPC status when it falls due.
IPC status and tax deductions: how they work
IPC status is a privilege, not an entitlement. MCCY explains that to qualify, the charity must be dedicated to serving the needs of the community in Singapore as a whole. Charities focused on a particular religious, ethnic or belief group can still be registered charities with tax exemptions, but generally cannot obtain IPC status for those activities.
On the donor side, IRAS grants deductions automatically based on the IPC's records rather than on receipts. Donors must give their NRIC, FIN or UEN when donating if they want a deduction. Deductions are allowed in the year of assessment following the donation. Where a donor receives a benefit in return, only the difference between the donation and the benefit's value is generally deductible, subject to concessions for benefits with no commercial value.
Individuals can also obtain deductions for donating SGX-listed shares or units in Singapore-traded unit trusts to approved IPCs, which can be attractive for families holding appreciated securities.
Overseas giving and family offices
The 250% deduction is for local causes. For overseas giving, IRAS describes the Philanthropy Tax Incentive Scheme for Family Offices, administered by MAS, under which approved qualifying donors can claim a 100% deduction for overseas donations made through qualifying local intermediaries, capped at a percentage of statutory income. A separate pilot scheme gives a 100% deduction for qualifying donations to approved overseas humanitarian causes through designated charities holding a Fund-Raising for Foreign Charitable Purposes permit. Our article comparing the 13O and 13U family office schemes explains how these incentives fit with family office structuring.
After setting up a charity in Singapore: governance and ongoing duties
Registration is the beginning of a continuing relationship with the regulator, not the end of the process. The obligations below apply in some form to most charities, and more intensively to IPCs and larger organisations.
Governance
The Code of Governance for Charities and IPCs sets out expected practices on board composition, conflicts of interest, financial controls, reserves, fund-raising and disclosure. Larger charities and IPCs are expected to apply more of the Code and to report how they comply. Boards should meet regularly, minute their decisions, review financial statements and set clear policies on conflicts, related-party transactions and reserves.
For family charities, the most sensitive issues are usually conflicts. Grants to organisations connected with family members, contracts with family businesses, and payments to family directors all need to be declared, assessed and recorded, and in some cases avoided altogether.
Reporting, records and fund-raising
Charities file annual reports and financial statements through the Charity Portal, and IPCs submit donation records to IRAS so that donors receive their deductions. Donor information collected for that purpose must be handled in line with Singapore's personal data protection rules.
Public fund-raising, especially online appeals and campaigns run with commercial fund-raisers, is subject to codes of practice. A charity should agree internal approval steps for appeals, keep records of funds raised and how they were applied, and be ready to explain both to the regulator and to donors.
Legacy gifts and long-term funding
Many families want their charity to continue after the founding generation. Legacy gifts by will, gifts of listed shares and long-term endowments can all support that goal. Anyone setting up a charity in Singapore as part of a succession plan should coordinate the charity's constitution with the family's wills and trusts, so that future gifts are clearly directed and the charity's purposes remain workable. Our guide to assets that pass outside a will explains why nominations and joint holdings should be reviewed at the same time.
An illustrative scenario: a family office begins structured giving
This scenario is illustrative and does not describe any real client or case.
A second-generation family with a single family office in Singapore wants to fund scholarships for local students and, separately, to support education projects in South Asia. They are weighing up setting up a charity in Singapore against simpler alternatives, and want to understand the governance commitment involved.
For the first year, they open a donor-advised fund with an established IPC intermediary to support local scholarships, obtaining deductible gifts while they refine their criteria. For the overseas programme, they explore the Philanthropy Tax Incentive Scheme through the family office. In year two, with a clear programme and track record, they incorporate a CLG with an independent chair and two non-family directors, register it as a charity, and prepare an IPC application once the scholarships are running.
The family also updates their wills to leave a legacy gift to the new charity, coordinated through our wills and estate planning team.
Risks and common mistakes when setting up a charity in Singapore
Assuming charity registration means tax-deductible gifts
Registration brings tax exemptions for the charity, not deductions for donors. Only IPCs can issue tax deduction receipts, and IPC status depends on serving the Singapore community as a whole. Families who promise donors deductions before IPC status is granted risk embarrassment and unhappy supporters.
Drafting objects that are not exclusively charitable
Objects that mix charitable aims with private benefit, such as supporting family members or promoting a family business, can prevent registration. Even after registration, using charitable funds for private purposes is a serious governance failure. Draft the objects carefully and keep family and charitable interests separate.
Underestimating governance and conflicts
Charities must manage conflicts of interest, keep proper records and report annually. Family-controlled boards face particular scrutiny on related-party transactions, remuneration and grant decisions. Adopting the Code of Governance early, appointing independent directors and documenting decisions protects both the charity and the family's reputation.
Setting up a charity when a DAF would do
A standalone charity requires a board, accounts, filings and continuing compliance. For many families, especially those starting out, a donor-advised fund achieves the same giving goals with far less overhead. Consider the long-term plan before committing to setting up a charity in Singapore.
Fund-raising without the right permits or codes
Public fund-raising, online appeals and fund-raising for foreign charitable purposes are regulated, and codes of practice apply. A charity planning to raise funds from the public, or to support overseas causes, should check permit requirements and codes on the Charity Portal before launching an appeal.
Cross-border philanthropy
When setting up a charity in Singapore, families with roots in Bangladesh, the United Kingdom, the UAE or China often want to give both in Singapore and abroad. A Singapore charity can support overseas work, but the local tax deductions are designed for local causes, and fund-raising for foreign charitable purposes requires a permit.
Structures in other countries may also be needed. A UK charity, for example, has its own registration and tax rules, and some countries restrict foreign funding of local non-profits. Coordinating the Singapore charity with any overseas vehicles avoids duplication and compliance gaps.
Our charities and philanthropy practice works with advisers in other jurisdictions so that a family's giving is structured coherently, and our trusts and succession planning team integrates philanthropy into the wider family plan.
Checklist for setting up a charity in Singapore
- Write down the charitable purpose, beneficiaries and the activities you will fund or run.
- Decide whether a donor-advised fund would meet your goals before establishing a new entity.
- Choose between a CLG, a charitable trust or a society, considering governance and liability.
- Draft objects that are exclusively charitable and governing documents that meet regulatory expectations.
- Appoint a board with relevant skills and some independence.
- Register with the Commissioner of Charities before holding yourself out as a charity.
- Build a track record and governance processes before applying for IPC status.
- Coordinate with your family office, wills and family office regulatory position.
To discuss setting up a charity in Singapore or a donor-advised fund, contact TRW & Co.
Frequently asked questions
01What is the difference between a charity and an IPC in Singapore?
A registered charity is an organisation with exclusively charitable purposes registered with the Commissioner of Charities. It enjoys income tax exemption and property tax exemption on premises used exclusively for charitable purposes. An Institution of a Public Character is a charity that has also been approved to issue tax deduction receipts to donors. To qualify, it must serve the needs of the Singapore community as a whole rather than sectional interests based on race, belief or religion.
02How much tax deduction do donors get for giving to an IPC?
IRAS allows a deduction of 2.5 times the qualifying amount for cash donations to approved IPCs for causes that benefit the local community. The deduction is applied automatically in the following year of assessment, based on the IPC's records, provided the donor gave their NRIC, FIN or UEN. Donations to charities without IPC status are not deductible. The enhanced rate is time-limited, so check the current position with IRAS when planning.
03Should we set up a charity or use a donor-advised fund?
It depends on your goals. A standalone charity, usually a company limited by guarantee, gives full control and suits families planning to run programmes, employ staff or fundraise publicly, but it brings continuing governance and reporting duties. A donor-advised fund with an established IPC intermediary offers deductible giving and professional administration with little overhead, but the intermediary makes final grant decisions. Many families start with a donor-advised fund and set up their own charity later.
04Can a family foundation in Singapore be controlled by the family?
Families can play a leading role, but a charity's assets must be used only for its charitable purposes, and conflicts of interest must be managed. Family-dominated boards attract closer scrutiny, particularly where IPC status is sought or public funds are raised. Appointing independent directors or trustees, adopting the Code of Governance for Charities and IPCs and keeping family and charitable interests separate all help protect the charity and the family.
05Can a Singapore charity support causes overseas?
Yes, a charity's purposes can extend overseas, but the enhanced local deduction applies to donations for causes benefiting the local community, and fund-raising from the public for foreign charitable purposes requires a permit from the Commissioner of Charities. For family offices, the Philanthropy Tax Incentive Scheme administered by MAS offers deductions for qualifying overseas donations made through approved local intermediaries, subject to a cap.
06How long does it take to obtain IPC status?
There is no fixed timetable that applies to every applicant. IPC applications are assessed on the charity's activities, governance and public benefit, so a new charity typically needs to show a track record of activities and sound administration before applying. Planning for a period of operation as a registered charity first, with good records and governance, gives an IPC application the best foundation.
Sources and official materials
- Charities and Institutions of a Public Character (MCCY) — Registration requirement, tax exemptions and IPC qualifying criterion
- Donations and tax deductions (IRAS) — 2.5 times deduction, IPC receipts, PTIS and overseas humanitarian scheme
- Charity Portal (Commissioner of Charities) — Register of charities and IPCs, applications and codes
- Charities Act 1994 — Statutory framework for charities in Singapore
- Registering a new charity or IPC status (GoBusiness) — Government licensing listing for charity and IPC applications
General information only, current as at 20 October 2026. It is not legal advice and does not create a lawyer–client relationship. Singapore law and regulatory practice change; check current official sources and take advice on the facts of your matter.
