Global Offshore Business Environment in Singapore
Why Choose Singapore as an Offshore Tax Haven
Singapore is one of the most advanced and fastest growing modern economies in Asia, consistently ranked as one of the best places to do business. The country has attracted international capital due to its liberalized economy, investment friendly environment and attractive tax policies capturing 16% of all offshore investments.
The last twenty years has seen a dramatic rise in the city state as a regional trading center for finance and commerce, becoming the gateway to Asia's banking and investment markets. Singapore as many Free Trade Agreements (FTAs), Double Taxation Treaties (DTTs) and has been ranked one of the worlds most competitive and open markets.
Singapore is home to many regional banking headquarters due to its favorable corporate taxations laws and governmental incentives which has attracted many funds and investment companies to serve the nearly 150,000 SMEs registered in the country. The government has been able to attract foreign investors not only by offering massive tax breaks and business environment, but by creating favorable immigration policies.
Singapore has one of the strongest banking systems in the world, with many of its banks ranked among the safest. Offshore bank accounts in Singapore are open to non-residents, though it is becoming harder to open accounts without a Singapore offshore company together with a bank letter and proof of funds. It is possible to open up a personal offshore account though it may be difficult without a sizable deposit up more than 100,000 USD.
Singapore has increasingly become wary of opening up bank accounts to non-residents if they can not show the purpose or business plan for opening the bank. Increase scrutiny from the OECD and FATF has made many banks wary especially if you are an American as many bank just don't want to put up with all the hassle that is required.
Whether you are looking to incorporate or invest offshore through a non-resident program or are looking within the local market Singapore offers a stable political environment and rule of law giving non-residents a sense of peace and security. As as one of the worlds safest places to live and conduct business, Singapore has a prudent judicial system and police force that have instituted effective anti-corruption measures together with efficient international arbitration regulations.
Benefits of Singapore for Setting up an Offshore Company
- Highly advanced human capital and skilled labor force
- Social and physical infrastructure is world class
- Financial centre of Asia
- Political Stability
- Liberalized and diverse economy
- Regional headquarters for Asia
- Access to many DTTs
- Signatory of many FTA's
- Strong intellectual copyright protection laws
- Low and competitive personal and corporate tax rate
- Tax incentives for SME and certain economic sectors
- Tax breaks for foreign capital invested in the country
- Tax free on all foreign capital held
- Favorable immigration policies
- One of the best jurisdictions for doing Business (Business Environment Rankings)
- One of the most innovative countries in the world (Global Innovation index)
- Rates as the second most open and free economy (Economic Freedom Index)
- Easiest place for doing businesses (Global Competitiveness Report)
- Strategic location
- Strong rule of law
- Favorable arbitration regulations
- Westernized banking and finance sectors
- Regional Headquarters of many banks and finance companies
- Low corporate (0-17%) and personal income tax (0-20%)
- Tax relief for establishing companies establishing regional or international headquarters (0-10%)
- One of the most technology driven countries in the world
- Communication and Information systems are some of the best in the world
- Premier Finance and banking services
- Ranked as one of the most investor friendly countries
- Huge investment possibilities
- Highly competitive markets
- Low corruption
- Strong intellectual copyright protection policies
- AAA Sovereign rating
- One of the most innovate countries in the world
- 3rd highest GDP per capita
- Singapore banks OCBC, DBS and UOB some of the strongest banks in the world (1st, 5th, 6th according to Bloomberg)
Background Information about Singapore
Singapore is an islands city-state in South East Asia. It lies one degree north of the equator on the southern tip of the Malay peninsula. Singapore compromises of one main islands and 62 other small islets. Since independence it has undergone extensive land reclamation of over 130 square kilometers.
Singapore is a parliamentary Republic with a Westminster system of unicameral parliamentary government. The country is governed though a representative style of democracy with its executive power resting with the Cabinet led by a Prime Minister. The President is elected through a popular vote and has some veto powers over certain matters, though largely holds a ceremonial role. The Parliament acts as a legislative branch of government with MPs being either elected or appointed. The judicial system is has separate powers and is widely regarded as being one of the most reliable in all of Asia. However, there are some measures of authoritarian influences and strong judicial powers giving judges an absolute control due to the absence of juries.
Singapore has a unique combination of an almost authoritarian like government together with a strong emphasis on meritocracy and good governance that is commonly know as the "Singapore model" which ranks amongst the top in the world in many political arenas including security, rule of law, absence of corruption, regulatory enforcement and civil and criminal justice.
Economy and Infrastructure
Singapore has a developed economy and modern varied market and is one of the four Asian Tigers. The Singaporean economy is continually rated as one of the worlds most innovative, competitive, dynamic and business-friendly country's.
There is an extremely high standard of living with average per capita income reaching nearly 100,000 USD. Singapore has the highest percentage of millionaires in the world with one out of every 6 households having disposable income of over USD 1 million.
Telecommunications and infrastructure is a big reason as to why the country has seen so much success in the last two decades. For every 100 people there are 148 phone connections. Similarly, the country has one of the regions most efficient infrastructure and transportation sectors. With 8 Airports 100 Airlines serving 70 countries around the world with service to over 300 cities, that is access to over 2 billion of the worlds population within a few hours away. Singapore is also home too the worlds busiest port and has for the last number of years been awarded the best airport and airlines (Changi Airport and Singapore Airlines).
There is a well developed modern banking and financial services industry that has operations of many regional and international institutions as well as foreign merchant banks, securities firms, and investment banks.
Population, Language and Culture
Singapore has a multi-racial population consisting of Chinese (77%), Malays (14%), Indians (8%) and others (1%). The country has approximately 5.3 million people with four official languages including Malay, Chinese (Mandarin), Tamil and English. While English is the language of administration and business Malay is the national language. Singapore is well situated and connected to other Asia Pacific countries including China and India and maintains good foreign relations with its neighbors. It is situated within a few hours plane ride to nearly 25% of the worlds consumers.
Despite its relatively small size and population, the Singapore is widely diverse in its religions, languages and cultures. The majority (33%) of people are Buddhists, followed by Christian, Islam and Taoism. Singapore though is considered a widely diverse society it is generally regarded as conservative. Singapore is heavily influenced by Western attitudes while have many Chinese, Malay and Singaporean culture ideals most notably coming from Confucianism and Islam. The country has a mixed identity without an overarching national ethnicity or identity, which has been a distinctive element of the country's original formation.
There are no exchange controls in Singapore.
Type of Law
Singapore's legal system is based on English Common Law with local distinctions.
Principal Corporate Legislation
The Companies Act Chapter 50.
Singapore's tax system is territorial based. Only income derived from within Singapore is subject to tax. The country has a very supportive and attractive tax system to capture foreign investors with many tax breaks for certain industries. Corporate tax rates vary depending upon sector and size of company from 0%-17% and personal tax rates vary from 0%-20%.