India–ASEAN Tax and Economic Ties 2025: NRIs, Students, and Businesses

(SINGAPORE) India is stepping up efforts to protect workers, students, and entrepreneurs across the ASEAN bloc in 2025, leaning on long-standing Double Taxation Avoidance Agreements (DTAAs) while pushing talks for the region’s first social-security deals with Singapore and Malaysia. The moves affect more than 2 million Indians living across Southeast Asia and aim to prevent double taxation, safeguard startup activity, and bring clarity for digital workers who split time between countries.

According to analysis by VisaVerge.com, ASEAN has become one of India’s busiest people-to-people corridors, and India–ASEAN tax and mobility links now sit at the heart of the diaspora’s day-to-day financial planning.

Immediate relief from existing treaties

The immediate relief for most Indians in ASEAN comes from the tax treaties already in force. India has DTAAs with all 10 ASEAN countries, and core pacts in Singapore, Malaysia, Thailand, Indonesia, and Vietnam shape tax treatment for:

• Salaries
• Business profits
• Capital gains
• Professional services

These DTAAs limit or remove duplicate taxes by deciding where income is taxed and how much withholding applies on cross-border payments like royalties, interest, and dividends, often capped at 10–15%.

For students and academic visitors, the treaties provide time-bound tax exemptions that protect stipends and research grants, helping young professionals get established in new markets.

Singapore: the central node

Singapore remains the most important link in the India–ASEAN tax web.

• The India–Singapore DTAA, first signed in 1994 and updated in 2017, created a special regime for capital gains and added a Limitation of Benefits (LOB) clause to prevent treaty shopping by shell companies.
• Shares acquired before April 1, 2017 still enjoy a full capital-gains exemption if other conditions are met.
• Royalties, interest, and dividends typically face a 10% cap under the treaty.

Because Singapore hosts a large Indian community in finance, technology, and trading, these terms matter for both payroll and investment planning. Many founders also cite stronger investor comfort built under the India–Singapore CECA, which complements the treaty architecture and helps keep cross-border dealmaking steady.

Malaysia: career hub with treaty clarity

Malaysia’s DTAA with India was updated in 2012 (originally 2001) and is popular among Indians working in Kuala Lumpur, Penang, and Johor.

• The treaty prevents double taxation on employment and business income.
• Many NRIs treat their Malaysian salary as taxable only in Malaysia when they are non-residents in India.
• Cross-border payments from India—such as dividends or royalties—generally fall within a 10–15% withholding band.

These features have helped Indian consultants, engineers, and designers work with Indian clients without tax spirals. Local startup incentives add attraction for Indian founders who want a Southeast Asia base while selling into both ASEAN and India.

Thailand: longstanding, straightforward rules

Thailand’s 1985 DTAA with India is often used by shipping, airlines, and technical service providers.

• The treaty exempts shipping and air transport income under Article 8.
• It caps technical fee withholding at 15%, keeping cross-border service work predictable.

Many NRIs in Thailand find their Thai-sourced income taxed in Thailand while remaining outside India’s tax net if they meet the 182-day non-resident test. That timing rule drives travel and residency planning for workers shifting between Bangkok, Chennai, and Mumbai during projects.

Indonesia: clarity for energy and infrastructure work

Indonesia’s 1987 DTAA, supported by clearer administrative procedures, is important for Indian oil, gas, and energy professionals.

• The treaty places a 10% cap on royalties and interest.
• It clarifies business profits under Article 7, which matters for determining when a permanent establishment exists and how profits are split.

While local filings can be complex, the treaty’s ceilings are a planning anchor for Indian service companies supporting Indonesia’s energy, mining, and infrastructure projects.

Vietnam: growing relevance for tech and manufacturing

Vietnam’s 1994 treaty with India is gaining attention as Indian IT and manufacturing roles expand in Ho Chi Minh City, Hanoi, and emerging hubs.

• The DTAA covers capital gains, independent personal services, and students.
• It complements rising trade in electronics, textiles, and software.

For Indian tech teams that win contracts in Vietnam but keep development talent in India, treaty limits on withholding tax can affect project margins. For students in joint programs or short research fellowships, treaty exemptions on stipends help control costs.

How the treaties work in practice

A common feature across ASEAN: most countries tax personal income where it is earned, while India taxes global income for residents. The treaties bridge that difference by offering relief either through exemption or a credit method.

• Many NRIs who qualify as non-residents in India can avoid double taxation on income earned in Singapore, Malaysia, Thailand, Indonesia, or Vietnam.
• For those who become tax residents in India due to time spent at home, treaties and India’s credit framework help ensure taxes paid abroad reduce what is due in India.

The difference between exemption and credit is technical but crucial: it influences how professionals, freelancers, and founders structure contracts and decide where to spend their time each year.

Social security gap and ongoing talks

A key gap remains on pensions and social protection: as of 2025, no Social Security Agreements (SSAs) are in force between India and any ASEAN member.

• Indian workers in Singapore or Malaysia must contribute to local schemes (such as CPF or EPF) with no formal portability back to India’s EPFO system.
• Officials say talks are active with Singapore and Malaysia, aiming for alignment in 2026–27, but until a deal is signed, returning workers face a patchwork: withdrawals may be possible under local law, yet recognition on the Indian side is not automatic.

For families, this uncertainty affects decisions about assignment lengths and the timing of moves home, especially for retirement planning.

Important: Until SSAs are signed, keep formal records of CPF or EPF contributions abroad and be prepared to show proof during any future reconciliation.

Documentation and compliance

Documentation has become more important as countries tighten compliance.

• Indians seeking treaty relief in ASEAN markets are often asked for a local Tax Residency Certificate (TRC).
• India’s tax authorities may request proof of taxes paid abroad when granting foreign tax credit.

Singapore has set out digital processes for tax residency certificates through the Inland Revenue Authority of Singapore (IRAS), and similar procedures exist across the region through local revenue bodies.

Experts advise keeping the following on hand, especially for project-based work or remote arrangements:
– Salary slips
– Local assessment notices
– Copies of employment or contractor contracts

Special considerations: students, digital workers, and substance tests

Treaty articles on students and teachers typically provide time-bound exemptions for scholarships, stipends, and visiting appointments—often up to two years—if the stay fits treaty terms.

Digital freelancers and long-stay remote workers should note:
– Spending more than 182 days in India in a year can tip one into Indian tax residency, making global income taxable at home (subject to treaty relief).
– Many Indian freelancers incorporate in Singapore to access startup rules and stable treaty withholding (often 10%) for India-facing contracts.
– Advisers caution that substance tests (like the LOB clause) require real business activity in the treaty country, not just a paper office.

Residency day counts and practical rules

Residency definitions across ASEAN are similar but not identical. Singapore, Malaysia, Indonesia, Thailand, and Vietnam generally use approximately 180–183 days as the bright line, with some also recognizing permanent homes or fixed bases.

• Travel logs and day counts matter: multiple short trips into India can trigger Indian tax residence even if most work is abroad.
• Tax planners recommend: count days carefully, obtain certificates early, and file on time in both jurisdictions when required.

Impact on businesses and multinationals

Businesses that operate between India and ASEAN credit the treaty network with keeping projects moving amid surges in digital trade and supply-chain shifts.

• Service exporters in software, design, and consulting benefit from withholding caps of 10–15%, which keep cross-border billing manageable.
• Manufacturers and energy contractors rely on clear profit attribution rules to avoid disputes when equipment, staff, and management time move between sites.

Paperwork is essential, but the policy architecture has matured sufficiently for many mid-sized firms to plan multi-country projects with predictable tax costs.

Policy direction: Act East and the SSA template

Government officials in New Delhi describe the Act East push as a way to bind trade, education, and mobility into a single road map.

• While SSAs remain the missing piece, early deals with Singapore and Malaysia are expected to set a template for other ASEAN members.
• A template SSA would let Indian workers carry pension credits across borders and reduce double deductions for companies seconding staff.

Until SSAs are signed, professionals should maintain records of foreign pension scheme contributions and be ready to present proof in future reconciliations.

Takeaways

• DTAAs across ASEAN define where income is taxed, cap rates on cross-border payments, and provide relief for students and researchers.
• These agreements are the quiet foundation under the India–ASEAN story—steady, tested, and evolving to fit a digital economy that rarely sits in one place for long.
• Important immediate actions for Indians in ASEAN:
  1. Keep accurate travel logs and count days carefully.
  2. Obtain and retain Tax Residency Certificates (TRCs) and evidence of taxes paid abroad.
  3. Maintain salary slips, assessment notices, and contract copies.
  4. Track CPF/EPF contributions and documentation while awaiting SSAs.

These steps will help workers, students, entrepreneurs, and businesses navigate treaty relief, compliance, and the evolving social-security landscape across ASEAN.