Our suggestion 1
While the use of non-tax countries is still viable, in international tax planning, it is recommended one chooses a treaty country rather than a non-treaty, non-tax country for the following reasons:
Non-tax countries are scrutinized more closely by tax authorities. In this respect, there is a strong possibility that tax authorities worldwide will use the international Standard of Exchange of Information clause to further scrutinize holding companies establishes in non-tax jurisdictions. Locating a company in a treaty country provides additional treaty protection, which will generally be based on the OECD Commentary. This is particularly useful in the case of a Singapore outbound investment. In general, OECD member countries are obligated to abide by the OECD Model Convention unless a member country has made a reservation against it.
Our suggestion 2
In cases of multi-layer structures, where one or several of the intermediate holding companies is located in a non-tax country, it may be advisable to loop in at least one or two treaty countries so that in case the tax authorities use general anti-tax avoidance rules, a defence line can still be maintained along these treaty countries.
In the above example, the treaty country is sandwiched between the two non-treaty, non-tax jurisdictions. If the IRAS uses general anti-tax avoidance rules to pierce through the first intermediate holding company, the treaty country will act as another defence line in case of a tax assessment.