Singapore Offshore Banking

Here is a good piece I found on mrxpat.com about law, regulation and banking in Singapore…

Singapore has double taxation treaties with more than 40 countries, including Belgium, the Netherlands and Luxembourg. . This makes it an interesting place to set up a holding company. . A European entrepreneur who brings his business in a Singapore holding company can enjoy a much more favorable tax regime.. The cost of setting up a company in Singapore soon amount to several thousands U.S. $.  Singapore is located in the heart of Asia, and is the largest banking center in the region. The infrastructure is among the best in the world with digital telecommunications, and a world class airport.  The banking laws are strict and Singapore is a huge success as a center for offshore funds. The regional property market relies more and more in Singapore. thanks to a good legal high skilled labor and tax benefits.  Trusts are less in use, but Singapore would change and offshore trusts are not taxed. In 2003, the tax reform, new tax incentives for investment funds, insurance companies and damage the futures market.  The business tax was reduced as both simplified and tax abolished. A real business transaction, however, settled by means of shares, is normally charged. Singapore also known wealth, customs duties, stamp tax and social contributions. The number of disks for personal income tax was reduced from 10 to 7, and the highest disc is dropped to 20%.  Company tax was 1% down to 32%. The government estimated the cost of these measures in more than 600 million singapore dollars. tax system operates on a territorial basis, meaning that income from offshore investments that are not returned to Singapore, are not taxed.

Companies in the financial sector also enjoy tax exemptions or lower rates for offshore. Banks and insurance companies pay scale 10% tax on offshore activities instead of 32%, except for life insurance. Also custom switching trust companies and trade in bonds enjoy the lower tax regime, and there are tax incentives for their data processors.  Interest on loans from foreign banks and companies can be deduced. In some years, the number of hedge funds in Singapore tripled. Eighty percent of the investment in a hedge fund should come from outside Singapore to qualify for tax exemption. . Managers of a hedge fund are taxed at 10% of their fee. Leaders in the sector, the government asked those rules ensuring a favorable climate for hedge funds to continue to insure. Since 2004, international investment funds no longer required to have an office in Singapore.  They can do business through a bank. Managers of more than S $ 5 million, for a period of five years exempt from tax on their fees. If the activities of the fund in Singapore to grow enough, this period for another five years. Tax on profits of the fund can be deducted from the 20% of dividends paid to shareholders are taxed. Gains made by financial firms for their clients are in many cases tax. Singapore’s competitors in the field of financial services in the region, Tokyo and Hong Kong, where rents the highest in the world. Singapore hopes some of their customers to attract a lower price. It was in this context that the government decided to make an exception to the territorial tax principle and the advantage as long as parties are foreigners, trusts completely exempt from tax.

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