It appears that it is great timing for the promotion of Singapore as an international centre not only for wealth management but inter-generational wealth succession. According to the March 2017 report by the Global Financial Centres Index (GFCI), Singapore ranked third globally, behind London (1st) and New York (2nd). GFCI rates and ranks each major financial centre in the world in terms of competitiveness based on fourteen factors of competitiveness, which are grouped into five key areas – human capital, the business environment, market access, infrastructure and general competitiveness etc.
Anti-Money Laundering and Global Trends in Tax Disclosure and Transparency
At the same time, Singapore has to continue to maintain world class standards in being a good world citizen and ensure regulatory enforcement against money launderers. Changes were made to designate tax evasion and other serious tax crimes as Money Laundering predicate offences from 1 July 2013. Singapore has also subscribed to the US FATCA regime and the OECD tax transparency exchange implementation. In this connection, Singapore has made an international commitment to commence the AEoI under the CRS in 2018 with the objective of enhancing tax transparency to detect and deter tax evasion through the use of offshore bank accounts.
Territorial Tax System
Singapore has a territorial system of taxation, no capital gains tax and foreign sourced income is not taxed. Non-residents and residents are not taxed on interest earned on their banks deposits. Singapore has a number of Double Tax Treaties (DTAs), some eighty- two DTAs with several countries worldwide. As a result, international tax advisers will find it attractive to consider using Singapore companies and trusts for investments and holdings.
Corporate tax has been brought down gradually over the years to 17%. With regard to the on-going competition between Singapore and Hong Kong, with the latter’s corporate tax rate at 16.5%, Singapore still remains attractive as there are schemes for tax exemption for start-up companies for the first $300,000 of income.
Another significant development was Singapore’s move to do away with the Estate Duty altogether. Since 15 February 2008, estate duty will not be payable upon the death of any person (whether domiciled or resident) who deceases on or after such date on any of the deceased’s assets left behind in Singapore, whether movables o immovable.
The timing is great for Singapore to become an international centre. With its world-class standard in enforcing regulations against money laundering and a territorial tax system results in an attractive trust and investment holdings for many companies foreign or local.