Singapore: Executive Summary

Singapore Executive Summary

Singapore’s aim is to become a major financial hub in the Asia-Pacific region, and judging by its recent performance in the wake of the global recession it appears to be achieving this goal. The city state is striving to encourage international finance and other businesses to locate there, and offers generous tax incentives to companies that locate their global or Asia-Pacific regional headquarters there. Indeed, while many countries are struggling out of recession, Singapore achieved economic growth of 14.5% for 2010, according to the Monetary Authority of Singapore (MAS). The MAS says that the immediate economic outlook is clouded by uncertainty arising from the spike in oil prices and the natural disasters in Japan, and Singapore's economy is expected to grow by a more modest 6% in 2011.

The island has excellent telecommunications and good transport links. The Port of Singapore is the world’s largest in terms of total shipping tonnage, transhipment and containers. It is also the world’s third largest petrochemical refiner, and operates South-East Asia’s most technically advanced and efficient shipbuilding and ship-repair facilities. The Singapore Registry of Ships has over 3,000 registered vessels totalling more than 29 million gross tonnes, and offers tax advantages and financial incentives to Singapore-registered vessels under various schemes and funds.

Having reformed its trust laws in 2004, Singapore has stolen a march in the region on rival Hong Kong, which is currently playing catch-up with its own proposed trust law reforms.

Despite meeting the OECD’s tax information exchange agreement requirements, and therefore being removed from the OECD’s grey list, banking secrecy remains enshrined in Singapore law, with heavy penalties for wrongful disclosure of bank clients’ financial details or accounts. Singapore is one of the world’s fastest growing banking centres, with many global banks setting up offices there.

Both individuals and companies can benefit from the various tax incentives on offer, from a 50% tax deduction on investments made by “angel investors” who invest at least SGD100,000 in qualifying start-up businesses, to tax exemption for qualifying non-resident investment funds managed by Singapore-based fund managers.

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