• High Net worth Individuals

“Affluent”

“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.

Fun Fact: What is the difference between High Net Worth and Ultra High Net Worth? While High Net Worth Individuals are known to have net worth of greater than 1 million USD, Ultra High Net Worth joins the elite and exclusive class of individuals possessing a net worth greater than 50 million USD.

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:

  • There is no tax on capital gains in Singapore hence if the HNW individual sold off his overseas investments and reported in his individual income tax, there will be no tax applicable against the income received.
  • There is no Estate Duty Tax imposed on inheritance assets on HNW individuals
  • Full Tax exemption of specific foreign income such as foreign-sourced dividends

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:

  • Visa free travelling to more than 100 countries
  • Remove worldwide tax liability
  • Avoid inheritance tax

Don’t these factors make Singapore highly attractive to you? Just imagine the situation below and see how it can relate to you:

Simple Calculation:

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

  • View Infographic

Company Set up
Singapore EP
Tax
Open Bank Acc
Can Foreigners Start A Business in Singapore
company incorporation in Singapore
Foreign Subsidiary Incorporation in Singapore
Foreigners Operate E-commerce Store in Singapore
View all

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:

  • Establish the tax residences to all their account holders.
  • Report to the Inland Revenue Authority of Singapore (IRAS) of the financial account information on relevant account holders.

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:

  • Selective Immigration Policy of Singapore
  • Growing anti-foreigner sentiments among Singaporeans
  • An Ageing population and overpopulation

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.

Corporate Tax checker

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

Table for High Net worth Individuals

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:

  • 100 year perpetuity
  • Anti-Forced Heirship
  • Tax Exemptions
  • Restriction of specific powers
Our thoughts: Google co-founder Sergey Brin and Shu Ping, the billionaire behind Chinese hotpot empire Haidilao International Holding Ltd have Chosen Singapore as the World’s Safest Haven as per Bloomberg Wealth

Do not procrastinate any further and seize this opportunity to relocate to Singapore now!

FAQs

What is the procedure of taxing a company(both foreign and local) in Singapore?2020-07-01T10:51:38+08:00

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
How to claim for tax exemption?2020-07-01T10:51:12+08:00

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.

What is an Avoidance of Double Tax Agreement?2020-07-01T10:39:59+08:00

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.

How income is assessed?2020-07-01T10:39:31+08:00

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.

Where to apply for some tax incentives?2020-07-01T10:38:30+08:00

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 legislationTypes of incentivesWhere to apply
ITA/S13FApproved International Shipping EnterpriseMPA
www.mpa.gov.sg
ITA/S13HApproved Venture CompanyEDB
www.edb.gov.sg
ITA/S14BFurther deduction of expenses relating to Approved Trade Fairs, Trade Exhibitions, Trade Missions or to maintain overseas Trade OfficeIE Singapore
www.iesingapore.gov.sg
ITA/S14EFurther deduction of expenses on Research and Development ProjectEDB
www.edb.gov.sg
ITA/S14OTax deduction of special reserves for catastrophic risks of approved general insurersMAS
www.mas.gov.sg
ITA/S19CWriting down allowance for cost sharing agreementEDB
www.edb.gov.sg
ITA/S43(9)Concessionary rate of tax for income of life insurance companies apportioned to policyholders
ITA/S43CConcessionary rate of tax for approved offshore general insurance companiesMAS
www.mas.gov.sg
ITA/S43CConcessionary rate of tax for approved offshore life insurance companiesMAS
www.mas.gov.sg
ITA/S43CConcessionary rate of tax for approved offshore composite insurance companiesMAS
www.mas.gov.sg
ITA/S43CExemption of tax for approved marine hull and liability insurer (onshore and offshore business)MAS
www.mas.gov.sg
ITA/S43CExemption of tax for approved offshore captive insurance companiesMAS
www.mas.gov.sg
ITA/S43CExemption of tax for approved insurer underwriting offshore qualifying specialised insurance riskMAS
www.mas.gov.sg
ITA/S43EConcessionary rate of tax for Approved Operational Headquarters (OHQs)EDB
www.edb.gov.sg
ITA/S43GConcessionary rate of tax for Approved Finance and Treasury CentreEDB
www.edb.gov.sg
ITA/S43QConcessionary rate of tax for Financial Sector Incentive CompaniesMAS
www.mas.gov.sg
ITA/S43PApproved Global Trading CompanyIE Singapore
www.iesingapore.gov.sg
EEIA/ Part IIPioneer IndustriesEDB
www.edb.gov.sg
EEIA/ Part IIIPioneer Service CompaniesEDB
www.edb.gov.sg
EEIA/Part IIIBApproved Shipping Logistics EnterpriseMPA
www.mpa.gov.sg
EEIA/ Part IIIBDevelopment & Expansion IncentiveEDB
www.edb.gov.sg
EEIA/Part XInvestment AllowancesEDB
www.edb.gov.sg
EEIA/Part XIIIBOverseas Enterprise IncentiveIE Singapore
www.iesingapore.gov.sg
EEIA/Part VIAExport Service CompanyEDB
www.edb.gov.sg

 

What are the solution & Service Fee provided by Paul Hype Page & CO.?2020-06-22T10:44:48+08:00

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.

 

For more information of other breakdown fees and packages, pls click to OUR FEES.

Share This Story, Choose Your Platform!

Just keep reading…

Join our PHP Community SG Forum - Expert Tips & Resources
Go to Top