Singapore is well-known to be one of the most established and thriving financial centres on the globe. Naturally, it is also an ideal location to store one’s wealth in an offshore account.
Here, we will look at the reasons why many high-value investors are turning to Singapore as their first choice for offshore banking. We will also go over some possible obstacles and drawbacks (yes, there are a few), as well as provide a few added details that one should know before opening an offshore bank account in Singapore.
Advantages of Offshore Banking in Singapore
Generally, with financial markets, one can never give absolute guarantees, but opening an offshore bank account in Singapore is possibly as close as you’ll come to 100% safety for your wealth. There are a number of factors which contribute to Singapore being a jurisdiction of utmost safety and stability:
- International banks in Singapore are among the safest and most respected in the world.
- The Singaporean economy is extremely stable and continues to thrive.
- There is strong regulatory oversight by a very capable government which has aided in the financial sector remaining unaffected even during worldwide crises.
Offshore Banking in Singapore Offers Attractive Tax Benefits
Generally, there would be no capital gains tax or other taxes on the income generated from deposits you hold with approved financial institutions in Singapore.
Singapore also has Double Taxation Agreements (DTAs) with over 60 countries (this includes the US, although the agreement is not as comprehensive as with some), so you will most likely be safe from double taxation.
For the savvy investor, it is possible to structure an offshore company in Singapore in such a way as to pay very low to no start-up taxes (for the first three years) and also benefit from significant tax deductions.
We won’t go into the finer details of this here, and it may be worthwhile speaking to a tax expert in Singapore for the best ways to structure your corporate profile.
It is important to note though that you will be unlikely to structure things in such a way as to pay absolutely zero taxes however an offshore account properly structured with a Singaporean offshore company will significantly reduce your tax burden.
Investment Banking and Asset Diversification Opportunities
There is an array of top-quality banking products and services available in Singapore to suit your specific needs and situation, as well as a number of quality banks to choose from.
Singapore offers attractive currency diversification opportunities. You can hold multiple currencies in your Singapore offshore account. (DBS allows up to 12 currencies in a single account!)
This enables you to hedge your currency risk and also offers the advantage of having access to different currencies if and when it is needed.
Singapore has become an established international banking hub which means you can expect great efficiency and high-quality service.
Accessing your wealth from your Singapore offshore account is easy with much more efficient online transfers and transactions compared to other jurisdictions.
For high-net-worth individuals, Singapore offers an array of accounts and financial services from offshore investment accounts to mutual funds.
Singapore banking services are amongst the best in the world, after Switzerland and Luxembourg, however, after the change in global tax laws, both Switzerland and Luxembourg has greatly restricted their accounts to foreigners.
Singapore has consistently ranked as one of the most stable banking jurisdiction to open an offshore bank account and together with its renowned service and expertise it's not hard to understand why.
Disadvantages of Opening an Offshore Account in Singapore
Whilst Singapore is probably one of most ideal jurisdictions to hold your offshore account if you have the means, it may not necessarily be the easiest place.
First off, you need a lot of capital to open an account. Singapore banks are only interested in high net worth clients. Singapore citizens are among the richest, so banks are not really interested in your few thousand dollars, and frankly it’s not worth the trouble for them. So yes, if you are willing and able to invest a hefty amount for a personal account (some say minimum 200 000 USD will do, others will tell you that a million would be better), then Singapore is great. But if not, you may have to turn elsewhere.
Recently, it is becoming more difficult for foreigners to open offshore accounts in Singapore. This is especially the case for US citizens as Singapore banks don’t like having to share all the required information with the IRS and all the additional hassle that it involves. There is a lot of paperwork and background checks, and many banks may refuse your request to open an account. One sure way to be accepted though is to have a lot of money.
Opening an account remotely in Singapore can be complicated and you are likely to be rejected, so really the best way is to go in person. Even then, banks may reject you if you don’t have a lot of money.
How to Open an Offshore Bank Account in Singapore
There are a few additional points to take note of with respect to opening your offshore account.
- Before you go, make sure you are up to speed with all the documents you will require to open an account. Depending on the bank, these will probably include: Passport, identity documents, copy of your bank statements, proof of address, and ideally a letter of recommendation from your home bank.
- It is definitely best to visit in person. You will need to find the right bank to suit your needs, and you will also need to prove to them that you are a trustworthy customer who will invest large amounts.
- Generally, it is easier to form a Singapore company and open an account in their name as opposed to opening a personal account as an individual. The initial deposit requirements are lower, and you would be more likely to be accepted by the host bank. If you would like to go this route, ensure that you understand all the ins and outs of incorporating in Singapore and hire an expert to help you take care of things.
Is it Worth Opening an Offshore Account in Singapore?
The bottom line is that Singapore is undoubtedly one of the most ideal places on earth to store your wealth in an offshore account. There are really very few downsides once you are successful in setting up your account.
However, it may not be so accessible to the masses. To open an offshore account in Singapore, you need to have a lot of money, plain and simple. So if you know that you are a very high-value customer and are looking for premier offshore banking service to match, then Singapore is definitely the place. If, however, you are not a 6 or 7 figure investor and are looking for more simple and easily accessible options, then you may need to turn elsewhere. Don’t worry, there are plenty of other good options to choose from.