“High Net Worth Individuals”
“Ultra-High Net Worth Individuals”
If you fall under those categories above, this article is for you! Steps to find out what exactly Singapore offers you.
Currently, there is an existing of 270 thousand “High Net Worth Individuals” in Singapore. “High Net Worth Individuals” are known to possess net worth greater than US$1 Million. That is an astonishing 4.5% of Millionaires living in Singapore. The figure is expected to grow to over 437 thousand by the end of 2025, marking a 65% increase in the number.
An article by the Business Times reads “The super-rich are choosing Singapore as the world’s safest haven”. To sum up this article, an exponential number of individuals have been moving and staying in Singapore, despite the pandemic.
Why is there a surge of number of Millionaires choosing to move to Singapore? Well, it is due to several reasons, which we will be discussing below.
Relocating to Singapore for Tax and Passport reasons
Exemption on Foreign Source Income
Singapore tax system is favourable for foreigner who become Singapore tax resident. Below are some of the tax incentives:
These exemptions have been in place since June 1, 2003. The scope of tax exemptions related to foreign-sourced income has been increasing over the recent years.
Singapore Passport Advantages
According to the Global Passport Power Rank for 2021, which is a set of rankings issued by The Passport Index intended to measure the amount of mobility granted by a particular country’s passport, a Singapore passport ranks 2nd place, with access to 192 destinations without a prior visa. This makes a Singapore passport second only to Japan of 193 destinations, making it more powerful than the likes of Economic powerhouses like Germany, South Korea and even USA.
Advantages of owning a Singapore Passport includes:
Don’t these factors make Singapore highly attractive to you? Just imagine the situation below and see how it can relate to you:
Let’s take John, a High-Net-Worth individual from Malaysia. John owns several properties in Southeast Asia, most notably in Malaysia, Indonesia and in Vietnam. His individual income tax rate is 30% which is the highest.
Let’s say he moves to Singapore and become a Singapore Tax resident as he stays more than 183 days, and his highest tax rate is 22%. This saves John 8% (30% – 22%) in terms of individual income tax, not to mention that Singapore does not tax capital gains.
Using simple calculations, let us take his income to be SGD 5,000,000. 8% tallies SGD 400,000 (TAX SAVING). If the HNW has made
$5,000,000 Income * 8% = $400,000
$10,000,000 Capital Gain * 8% = $800,000
Total Tax Saving = $1,200,000
Just imagine that. What you can be doing with $1,200,000
Difficulties Facing overseas High-Net-Worth Individual in migrating to Singapore
Surely, not all that glitters is gold. Below constitutes several difficulties a High-Net-Worth Individual may still face while living in Singapore
Bank Account Opening
It has been increasingly difficult around the world to open a Bank Account. Since 1 January 2017, Singapore based Financial Institutions such as banks are required to:
Overseas HNW individual does not have a residency visa for them to identify or prove their local tax residency hence most of the times even though they have a lot of money, they cannot successfully open a Singapore Bank Account.
Attaining Permanent Residency
An average of 147 people migrate to Singapore every day. Permanent Residency status is required as a “First Step” to eventually get Singapore Citizenship.
However, the Singapore government has been clamping down on the number of Permanent Residents they allow these recent years. This can be attributed to a few factors, but are not limited to:
With that said, the government is not closing off the country to foreigners. Instead, they are more selective in approving their citizenship application with more factors to consider besides their personal wealth and investment. Under the former GIP program, a PR visa is easily granted if you invest $2 million.
Now comes the interesting part. Do look out for what we can do for you below.
Solutions We Can Provide
Open a Bank Account
Our Shared Services Solution will enable your business to employ local physical staff for multiple roles as below. Having physical presence in Singapore will contribute to your business tax substance and meet the current requirement for opening a company’s bank account
Let us break down the process for you.
Overseas Company A is to set up a Singapore company. They do not have any employees or lease agreement for their Singapore company. Overseas Company B is to set up a Singapore company whilst engaged to our Shared Services program which offers employing local staffs as well as has a signed tenancy agreement for the physical office.
Which company then, do you think will stand a higher possibility getting approved for a bank account? Company B will 100% be able to open a bank account.
Obtaining a working visa for the High Net worth Individual
After the company’s bank account is opened, we can help you to obtain an Employment Pass to live and work in Singapore. This implies that control and management is in Singapore which directly contributes to local tax residency
An employment pass is valid for 1-2 years, which is renewable. This allows you to work and live in Singapore and being able to travel without having to pay for entry visas. The biggest upside is, possessing an Employment Pass makes it much easier to apply for Permanent Residency in Singapore.
An alternative will also be the Entrepass . Being an Entrepass holder means that you have demonstrated the plan to set up an investment holding company for investment in different industries purpose.
With the above it demonstrates that you have the potential to contribute to the Singapore economy, hence increasing your chances of becoming a Singapore Permanent Resident.
Setting up of a Foreign Trust for You
An alternative besides operating a business is setting up a Foreign Trust in Singapore.
By setting up a Trust in Singapore entails the following benefits:
Do not procrastinate any further and seize this opportunity to relocate to Singapore now!
A company, regardless of whether it is a local or a foreign company, will be taxed on its:
- income accruing in or derived from Singapore; or
- income received in Singapore from outside Singapore
You are required to make a declaration in your income tax returns by giving the nature and amount of the foreign-sourced income that was remitted to Singapore. You are also required to complete the Declaration Form for Foreign-Sourced Income Received in Singapore From 22 Jan 2009 to 21 Jan 2010 (60KB) for submission to IRAS. Although you have to state the use of the foreign income in the declaration form, the usage of such foreign income will not affect the claim for tax exemption.
An Avoidance of Double Taxation Agreement (DTA) is an agreement signed between Singapore and another country (a treaty country) which serves to relieve double taxation of income that is earned in one country by a resident of the other country.
It makes clear the taxing rights between Singapore and her treaty partner on the different types of income arising from cross-border economic activities between the two countries.
The DTA also provides for reduction or exemption of tax on certain types of income.
Only Singapore tax residents and tax residents of the treaty country can enjoy the benefits of a DTA. To find out who are our treaty partners, please refer to the List of Avoidance of Double Tax Agreements.
Income is assessed on a preceding year basis. This means that the basis period for any Year of Assessment (YA) generally refers to the financial year ending in the year preceding the YA.
There are various types of tax incentives available to companies and these are provided in the Singapore Income Tax Act (ITA) and Economic Expansion Incentives Act (EEIA). Some of the tax incentives available are listed in the table below.
|Governing legislation||Types of incentives||Where to apply|
|ITA/S13F||Approved International Shipping Enterprise||MPA
|ITA/S13H||Approved Venture Company||EDB
|ITA/S14B||Further deduction of expenses relating to Approved Trade Fairs, Trade Exhibitions, Trade Missions or to maintain overseas Trade Office||IE Singapore
|ITA/S14E||Further deduction of expenses on Research and Development Project||EDB
|ITA/S14O||Tax deduction of special reserves for catastrophic risks of approved general insurers||MAS
|ITA/S19C||Writing down allowance for cost sharing agreement||EDB
|ITA/S43(9)||Concessionary rate of tax for income of life insurance companies apportioned to policyholders||–|
|ITA/S43C||Concessionary rate of tax for approved offshore general insurance companies||MAS
|ITA/S43C||Concessionary rate of tax for approved offshore life insurance companies||MAS
|ITA/S43C||Concessionary rate of tax for approved offshore composite insurance companies||MAS
|ITA/S43C||Exemption of tax for approved marine hull and liability insurer (onshore and offshore business)||MAS
|ITA/S43C||Exemption of tax for approved offshore captive insurance companies||MAS
|ITA/S43C||Exemption of tax for approved insurer underwriting offshore qualifying specialised insurance risk||MAS
|ITA/S43E||Concessionary rate of tax for Approved Operational Headquarters (OHQs)||EDB
|ITA/S43G||Concessionary rate of tax for Approved Finance and Treasury Centre||EDB
|ITA/S43Q||Concessionary rate of tax for Financial Sector Incentive Companies||MAS
|ITA/S43P||Approved Global Trading Company||IE Singapore
|EEIA/ Part II||Pioneer Industries||EDB
|EEIA/ Part III||Pioneer Service Companies||EDB
|EEIA/Part IIIB||Approved Shipping Logistics Enterprise||MPA
|EEIA/ Part IIIB||Development & Expansion Incentive||EDB
|EEIA/Part X||Investment Allowances||EDB
|EEIA/Part XIIIB||Overseas Enterprise Incentive||IE Singapore
|EEIA/Part VIA||Export Service Company||EDB
In Singapore Taxation system, a Singapore PR on an individual tax capacity any foreign sourced income or investment gain will be tax free even if it is remitted to Singapore. Further, if you cannot relocate to Singapore to obtain PR status, Paul Hype Page & Co’s property investment program allows you to become tax resident and obtain relevant work visa for obtaining your PR status within 1 to 2 years
If you wish to enjoy lower tax rate and assets protection via a corporation or trust structure, Paul Hype Page & Co , Public Accountant able to set up a suitable trust or company tax structure to achieve your commercial goals.
- Our Fees is charge based on consultation hour at $250 per hour.
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