Singapore: Low-Tax Business Sectors

Singapore Trade, Marketing and Distribution

With its key import and export links in Asia, and tax incentives for international and regional headquarters, Singapore is attracting global consumer companies.

For example, Tate & Lyle has moved all of its sucralose production to Singapore, using fourth generation production technology. Operations for Unilever’s business in Asia, Africa and central and eastern Europe – the regions from which the company achieved over one-third of its revenues in 2008 – are based in Singapore, including the co-location of Unilever’s key regional decision-makers from its marketing, supply chain, finance and customer development divisions. Rémy Cointreau has established regional headquarters for its Asia-Pacific markets and worldwide headquarters for its Global Travel Retail and Duty Free division there, while Burger King has opened an independently run “concept” outlet to test-bed new products.

Singapore Investment Holding Companies

Singapore has an extensive network of double tax treaties that reduce the rate of withholding tax levied on dividends remitted by foreign subsidiaries to Singaporean investment holding companies. For further details on how withholding taxes affect incoming and outgoing dividend payments in relation to Singaporean holding companies, see Singapore Information: Low-tax and Incentive Regimes: Singaporean Holding Companies.

Singapore Banks

Singapore is one of the world’s fastest growing private banking centres, as demonstrated by the many global banks that have set up offices there. The jurisdiction has strict banking secrecy laws, yet it aims for a transparent economy and complies with the requirements of the OECD “white list”. All banks operating in Singapore must be licensed by the Monetary Authority of Singapore, which is the jurisdiction’s central bank.

Singapore Investment Funds

Unit trusts and investment-linked life insurance products have seen a significant increase in recent years, with many well-recognised global fund managers establishing in Singapore. A report by the Investment Management Association of Singapore for the fourth quarter of 2009 shows net positive flows into Singapore funds over three consecutive quarters to the year-end. Equity funds accounted for two-fifths of Q4 2009 net inflows, while bonds bucked recent trends and accounted for 70% of total net inflows.

Singapore Ship Management and Maritime Operations

The Singapore Shipping Register ranks among the world’s top 10, with over 3,000 registered vessels totalling 43.7 million gross tons.

The Maritime and Port Authority of Singapore has in place a range of incentives:

Singapore Licensing and Franchising: Royalty Collection

The Franchising and Licensing Association (Singapore) (FLA) was established in 1993 as the island state’s national franchise body, and has since extended its scope to include companies engaged in branding and technology licensing. The FLA was one of the founding members of the World Franchise Council.

Franchisees can make royalty payments to franchisors without approval from any authority, and royalties can be freely converted to foreign currency for payment to a foreign franchisor. Withholding tax of 10% is generally payable by local franchisees on royalties paid to non-resident franchisors, although this may vary where there is a double tax treaty with the franchisor’s home country.

Singapore Insurance

Approved offshore insurance companies in Singapore benefit from a 10% concessionary tax rate on qualifying income derived from business conducted in Singapore. However, the 2010 Budget has introduced a sunset clause of five years on the incentive, effective from April 1, 2010. Under the clause, the incentive will be awarded for a 10-year period, and a headcount requirement will be imposed.

 

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- Lowtax Update 17th May 2012
- Lowtax Update 10th May 2012
- Lowtax Update 3rd May 2012
- Lowtax Update 26th April 2012
- Lowtax Update 19th April 2012
- Lowtax Update 12th April 2012

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