Provisions for the Family

The spouse of the investor and their children (below 21 years old) are eligible to apply for PR under the GIP application. Male dependents will be liable for National Service.

Parents and unmarried children of the investor who are 21 years old and above are not eligible to be included in the GIP application for PR status, but instead, they can apply for a five-year Long Term Visit Pass.

The validity of the Re-Entry Permit

Upon the formalisation of the PR status, the investor will be issued a Re-Entry Permit (REP). A valid REP is necessary whenever the PR wishes to travel in and out of Singapore. It enables a person to retain PR status while away from Singapore.

After the first five years, the REP would be renewed if the investor fulfils the following conditions:

For a three-year renewal:

The investor must have fulfilled the investment conditions under Option A or Option B of the GIP, and either has set up a business in Singapore with five or more Singaporean employees and have incurred at least SGD 1 million in total business spending a year; or the investor or at least one of his/her dependents, who is also a PR under the GIP, must have resided in Singapore for more than half of the time.

For a five-year renewal:

The investor must have fulfilled the investment conditions under Option A or Option B of the GIP and must have set up a business in Singapore with five or more Singaporean employees and have incurred at least SGD 1 million in total business spending a year. The investor and their dependents, who are also PR under the GIP, must have resided in Singapore for more than half of the time.

Taxation in Singapore

Singapore has a mild tax regime and has introduced tax regulations favouring foreign investors over recent years. The country has introduced various incentive schemes to attract investment, enabling the growth of businesses.

Singapore’s taxation system operates on a territorial basis. On an individual level, only local income derived from within the jurisdiction is taxable. Regardless of residence status, all foreign income is exempt, even if remitted to Singapore (unless remitted through a partnership in Singapore).

A Singaporean citizen is considered a tax resident if the individual resides typically in Singapore. A foreign resident is considered a tax resident if the individual is physically present or employed for 183 days or more per tax year.

The “Not Ordinarily Resident” (NOR) scheme aims to attract global skills and provides various tax concessions for five years for those who have not been residents for three consecutive years before the application.

Singapore has a very narrow tax base of taxable income. Personal income tax rates are low, and levies are at progressive rates of up to 20%.

Capital gains taxes are levied in minimal circumstances. There are no gift taxes, and estate duty was abolished in 2008.

The standard corporate tax rate for 2015 is 17%. Companies, both resident and non-resident, are taxed on income remitted to Singapore. Certain exemptions apply to resident companies regarding foreign remittances.

In 2008, a one-tier taxation system was introduced, providing for the exemption of income tax on dividends, regardless of the method of paying out.

Citizenship in Singapore

The Singapore passport is one of the most widely accepted in the world. It provides the holder with visa-free access to over 170 countries, including Europe (EU), the Schengen Area, the United States of America (US), Canada, China and others.

After two years of permanent residence in Singapore, it is possible to apply for Singaporean citizenship.

Singapore is a single citizenship country, and this is strictly enforced. For this reason, Singapore is not attractive if you are interested in holding more than one citizenship and passport.

Trust And Company Formations In Singapore

Singapore is gaining more attraction as a trust jurisdiction internationally. A range of factors have contributed to achieving a reputable offshore trust status, including but not limited to the following reasons:

1. Singapore is home to many local and foreign financial institutions. Many firms provide accounting, legal and tax advisory services.
2. Well-defined legal framework and a robust regulatory framework. Provides comprehensive legislation that ensures an attractive tax regime and a robust framework for trust arrangements.
3. The country has open, sound and stable economic policies, this is Singapore’s most significant competitive advantage compared to other countries.
4. The wealth management industry in Singapore continues to be an exciting growth phase, notwithstanding the current global climate.

What is a trust?

A trust is a legal arrangement whereby a donor or settlor transfers property to the trustees who hold and deal with it on behalf of the third parties (the beneficiaries).

The property owner who creates the trust arrangement (the settlor) would enter into the arrangement to allow the trustee to have control over the property, and any economic benefits from the property will accrue to the beneficiary. The settlor and beneficiary can be the same person.

Types of trust

There are various kinds of trusts available in Singapore which have different purposes associated with them.

• Private family trust: used by financially sound families for managing their assets.
• Statutory trust: meant for establishing statutory compliance.
• Charitable trust: an irrevocable trust established for charitable purposes.
• Collective investment trusts: examples of such trust are unit trust, business trust and real estate investment trusts.
• Foreign trusts: qualify for tax benefits, including tax exemption on a wide range of incomes as well as the exemption of tax on the distribution to beneficiaries of such trusts.

Singapore trust law

Settlors of trusts seek a solution for asset protection, confidentiality, estate planning and family circumstances. Their concerns will be addressed if they are guaranteed an effective legal and regulatory framework.

Singapore operates with a common law legal system based substantially upon English Trust principles. Trusts in Singapore are regulated predominantly by the Trustees Act, which is administered by the ministry of law.

In addition, the Trust Companies Act(TCA) governs trust businesses in Singapore. The Monetary Authority of Singapore(“MAS”) is the regulator of trust companies under the TCA. The conduct of trust businesses is subject to strict anti-money laundering requirements. MAS grants licenses only to those trust companies that meet their high standard in terms of qualifying, financial reporting, controls and the experience of the professionals that are employed to manage the business.

Singapore has a territorial tax system. There is no capital gains tax, and estate duty was abolished in 2008. There are no exchange controls and funds may be remitted to and from Singapore. Since 2006, foreigners setting up Qualifying Foreign Trust(“QFTs”) and Singapore residents setting up Qualifying Domestic Trust(“QDT”) enjoy tax exemptions.

Both QFT and QDTs must be administered by a Singaporean licensed trust company. Singapore also has an extensive double tax treaty network with over 50 countries across the world. This entails interesting tax planning opportunities.

Benefits that Singapore’s trust framework provides

Asset protection

Assets are protected from any risks such as any potential future liabilities of a settlor. Assets can also be safeguarded against being taken away or attacked by the state of the settlor’s country of residence, nationality or domicile.

Tax planning

As mentioned earlier if the settlors and beneficiaries are non-residents, the trust will be exempt from income tax. There will be no withholding tax, deduction of Singapore income tax, no inheritance, wealth, gift or capital gains taxes levied in Singapore.

Avoid the expense and delay of probate

The establishment of trust removes any assets present in the estate and avoids the need to obtain a grant of representation.

Confidentiality

There are strict confidentiality and banking secrecy laws. There is no public register of trusts in Singapore. The ownership of trust assets can remain entirely confidential in most circumstances.

Avoid forced heirship

Settlors are protected from forced heirship claims.

Estate planning

A trust is a convenient and flexible method of making complex arrangements for distribution of the assets.

Protecting the vulnerable

A trust enables people to manage their own affairs such as infant children, disabled relatives, the aged or persons suffering from certain illness.

Finally, Singapore offers economic and political stability, tax neutrality, access to a broad range of financial services and top quality financial institutions, a strong judicial system, sound regulation and overall integrity. The statutory and tax environment for trusts in Singapore continues to evolve and grow and simultaneously so does the trust jurisdiction’s magnetism for wealthy individuals and wealth-management professionals alike.

Singapore is gaining more attraction as a trust jurisdiction internationally. A range of factors have contributed to achieving a reputable offshore trust status, including but not limited to the following reasons:

1. Singapore is home to many local and foreign financial institutions. Many firms provide accounting, legal and tax advisory services.
2. Well-defined legal framework and a robust regulatory framework. Provides comprehensive legislation that ensures an attractive tax regime and a strong framework for trust arrangements.
3. The country has open, sound and stable economic policies this is Singapore’s greatest competitive advantage compared to other countries.
4. The wealth management industry in Singapore continues to be an exciting phase of growth, notwithstanding the current global climate.

Establishing a Holding Company in Singapore

The requirements for establishing a local business presence in Singapore are minimal and, according to the World Bank, setting up a business takes only two and a half days on average.

Holding companies in Singapore are typically registered as private limited companies (or “subsidiaries”), and this company structure is by far the preferred business arrangement for small and medium-sized foreign companies operating in the city-state. While navigating business establishment procedures in Singapore is relatively simple, investors should seek the advice of a professional services firm to consider the legal and tax implications that inevitably accompany the establishment of a local business presence.

Self-incorporation without the assistance of a professional services firm is only permitted if all directors, the company secretary, and initial shareholders are Singapore National Registration Identity Card (NRIC), Employment Pass, or Dependant Pass holders. Otherwise, a professional services firm must be engaged to register on the company’s behalf.

Requirements for Incorporation

Individuals and business entities seeking to establish a holding company as a private limited company must meet the following basic requirements:

At least one shareholder

• A Singaporean private limited company should have at least one shareholder, but no more than 50.
• The shareholder can be a person or another legal entity, and 100 per cent foreign shareholding is permitted.
• New shares can be issued or transferred at any time after the Singaporean company has completed the incorporation process.

At least one director that is a Singaporean resident

• A “resident” is defined as a Singaporean Citizen, Permanent Resident, or individual who has been issued an Entrepass, Employment Pass, or Dependent Pass.
• There is no limit on the number of additional foreign or local directors that can be appointed, but most companies will have at least two directors to fulfil requirements from banks and other financial institutions in the country.
• The shareholder and director are permitted to be the same person, and non-shareholders can also be appointed as directors.
• Directors must be at least 18 years old and have no criminal record.

A company secretary who is a Singaporean Resident

• Within six months of incorporation, a company secretary must be appointed.
• For companies with a single director/shareholder, the same person is not permitted to also act as the company secretary.

Paid-Up Capital

• The minimum paid-up capital (share capital) for the registration of a Singaporean company is S$1.
• Paid-up capital can be increased at any time after incorporation, and there is no concept of authorised share capital for Singaporean companies.

A Registered Address

A physical (residential or commercial) local address must be provided as the registered address of the company. The address may not be a Post Office Box and must be approved by the Urban Redevelopment Authority. Residential properties can only be used under the Home Office Scheme.

The Incorporation Process

As mentioned previously, the incorporation process for a private limited company can typically be completed in less than three days.

Once the decision has been made to move ahead with self-incorporation, the following steps should be taken to register a private limited company:

1. Name Registration

The first step in the registration process involves reserving the company’s name. The name must not conflict with an existing name or contain any sensitive or offensive words, and can typically be approved in less than an hour. Existing company names can be searched on the UEN website. The following guidelines should also be kept in mind to expedite the name registration process:

• The private limited company name should have the word “Private” (or “Pte.”) or Sendirian (or Sdn.”), its Malay translation, as part of the name, inserted immediately before the word “Limited” or “Berhad” (“Ltd.” or “Bhd.”).
• Names including certain words (such as a bank, finance, law, etc.) may require review by relevant government authority and prolong the approval process.

After a name has been approved, it will be reserved for 60 days from the date of application. This period can be extended by filing an extension request.

2. Company Registration

After a company’s name has been approved, a formal incorporation request can be filed on ACRA’s BizFile with the following:

• SingPass
• Name application number or approved company name
• Company type
• Particulars of additional directors/shareholders/members
• Registered place of business
• Share capital details
• PDF of Memorandum and Articles of Association

Companies can typically be incorporated within 15 minutes after the registration fee has been paid (between S$50 and S$600 for locals, and S$300 to S$1,200 for foreigners). For companies that require approval or review, the process can take between 14 days and 2 months.

Official Certificate of Incorporation and Company Business Profile

The Company Registrar will send an official email after successful incorporation that includes the company registration number and can be treated as the official Certificate of Incorporation. In order to receive a hard copy of the certificate, an online request can be made along with a fee of S$50. A business profile that contains the company’s particulars can also be obtained for a small application fee. This and the Certificate of Incorporation are often sufficient for all legal and contractual interactions, including opening a corporate bank account, signing an office lease, and subscribing to telephone/internet services.

The holding company (in the form of a private limited company) is permitted to begin operations after these documents have been successfully obtained, and a Unique Entity Number (UEN) has been issued.

Annual Compliance: General Meetings and Annual Returns

Annual compliance requirements for private limited companies are also relatively minimal and include holding an annual general meeting and filing of annual returns.

Within 18 months of incorporation, the first annual general meeting of the company must be held with no more than 15 months elapsing between subsequent annual general meetings without Registrar approval. If a resolution calling for the disposal of annual general meetings is passed by all members with voting rights, however, this requirement can be avoided. Within one month of the company’s annual general meeting, an annual return must be made containing the particulars of the company officers, registered address, and auditors. Typically, companies engage a professional services firm like Sterling Migration to file an annual return on their behalf.

Booking a Consultation

Complete our online enquiry form and one of our senior managers will arrange a confidential consultation to discuss your requirements and potential options, including our most popular emigration by investment option to Australia. For those who are looking to emigrate with their family rather than just hold offshore residency.