The Republic of Singapore is situated at the end of the Malay Peninsula and is the smallest nation in Southeast Asia. Singapore has a population of about 4.80 million people. Singapore is very stable politically and has a favorable environment which encourages business investments. Singapore offers offshore services to clients around the globe. These offshore services include incorporation of companies, offshore banking, and the formation of offshore trusts among other efficient services.
Singapore is regarded as one of the low tax havens of the world. A tax haven is a country or territory which encouraged foreign investments and investors by implementing no taxes or very low tax rates. Many of the world’s tax havens are also offshore jurisdictions. Singapore is known as a low tax haven since it has a very low tax scheme in place for both residents and non residents. This also applies to foreign and local corporations.
For years the government of Singapore have reviewed the tax systems of Singapore and put certain measures in place to go the point it is at today. Companies incorporated in the low tax haven of Singapore are taxed based on a territorial system. Singapore corporations are allowed to do business in and out of the jurisdiction. Companies doing business outside of the jurisdiction are not taxed on their annual income which includes profits, dividends, interests earned. Income earned in tax haven Singapore is taxed at a very low rate of 18% of the annual profits realized by a Singapore corporation. All Singapore companies must pay to the government at the end of its financial year a license fee.
Offshore banking is a service which is highly regarded in tax haven Singapore. The country has a well established offshore banking system with some of the world’s leading financial institutions setting up branches in the jurisdiction. Singapore is one of the more respected jurisdictions offering offshore banking. The country’s banking system is very modern and sophisticated. Offshore bank accounts in the tax haven of Singapore are not taxed. Interest earned in an offshore bank accounting Singapore is tax free. This makes the tax haven of Singapore a perfect jurisdiction for investing capital since growth is guaranteed.
Aside from low or no taxation another characteristic of tax havens (one which have made them very popular) is their ability to provide privacy and confidentiality for clients. For offshore banking for example tax haven Singapore has very firm laws in place when it comes to the privacy of offshore bank account holders in the jurisdiction. Banking secrecy forms part of Singapore’s modern and much progressive legislation. According to banking legislation of tax haven Singapore information which relates to offshore account holders and offshore bank accounts is not to be released by Singapore banks, banks employees, officers, directors and secretary among other persons who may qualify as bank officers. Disclosure of bank information in tax haven Singapore is punishable by a fine of $125, 000 or prison term of no more than three (3) years for an individual. Corporations who disregard this law can pay up to $250,000 in fines.
Tax haven Singapore also provides high level of privacy and confidentiality for corporations owners. There is no need to disclose the beneficial owners of Singapore corporations to the authorities in Singapore. Only one shareholder and one director is needed to incorporate a company in tax haven Singapore. Furthermore Singapore corporations can be incorporated using nominee directors and shareholders. There is no limitation on the nationality of persons who can incorporate companies in Singapore.
This prevents the names of the true owners of Singapore companies from being filed as public record thus becoming information which can be accessed by the public. Some Companies in tax haven Singapore can qualify for audit exemptions which mean that the financial status of the company remains private. The companies include those companies which are incorporated with just twenty members (20), companies whose annual turnover does not exceed $5 million Singapore Dollars and companies who members are individuals and not corporations.
While there is no exchange control laws in place the tax haven has signed double tax treaties with certain countries. The absence of exchange controls laws means that it is easy to move cash in and out of tax haven Singapore. Singapore companies can pay dividends to foreigners and will not be taxed. Tax haven Singapore has tax treaties with China, United Kingdom, New Zealand, Australia, India, France, Sweden, Korea, Vietnam and a few others. This means that person form the above mentioned territories risk being double taxed if they have interests in Singapore.
The tax haven of Singapore presents persons with legal means of projecting assets, reducing tax liabilities and investing capital. As a tax haven Singapore is not normally referred to as a tax haven but as a low tax haven due to its low tax rates.