“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:
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