The popular term for people who were very rich used to be “millionaires”. However, what is commonly used at the moment is the term high net worth individual. In Singapore, a high net worth individual can be said to be someone who has a minimum amount of assets. Based on the “Guidelines on Exemption for Specialised Units Serving High Net Worth Individuals Under Section 100 (2) of the Financial Advisers Act”, the definition of high net worth individual can be said to be someone who has a minimum of SGD1 million of assets or equivalent in foreign currencies. The assets can include bank deposits, capital markets products, life policies or any other investment products prescribed by the Authority.
Open Bank Accounts
Of course, there are many foreigners and locals who are termed as high net worth individuals. One advantage high net worth individuals have over others is the fact that they can take part in financial instruments which is an option that might not be offered to the general public. One popular option for high net worth individuals would be to open bank accounts in Singapore. For starters, it is due to the fact that Singapore has a well regulated and stringent financial system. People who open bank accounts in Singapore understand that the government and local authorities will ensure the safety of their funds and the secrecy of banking details.
Additionally, the service in Singapore is good enough to ensure that high net worth individuals enjoy banking in financial institutions there. Banks in Singapore are not only concerned about making money. They want to ensure that the individuals who open bank accounts there are given the highest level of service. High net worth individuals can definitely afford to be choosy about the financial institutions that they opt for. As such, financial institutions have to ensure that they are able to keep their assets safe and secure at all times. This is a huge factor that the high net worth individual looks at before choosing his bank of choice. Luckily, Singapore has been able to deliver on all fronts when it comes to safety and security of assets. This is the reason why it is still able to attract high net worth individuals to pour in deposits.
One of the main reasons why the level of service in Singapore banks is so high is due to the fact that competition is rife because there are many financial institutions plying the same trade. As such, banks can ill afford to lose any one customer due to bad service. In terms of the number of features and services that banks offer to customers, Singapore banks provide a high level which should fit the needs of any one of these high net worth individuals. Whether it is the number of branches available all over the country or the fact that Internet banking is highly secure, these individuals know that they will be given the best options.
Stable Singapore Economy
Additionally, one can say that the main drawing point of Singapore banks is the fact that it is built on a very stable Singapore economy. The truth is glaringly obvious – when other economies falter or face uncertainties, Singapore’s economy has been able to grow from strength to strength. Singapore can definitely be said to be the banking capital of South East Asia, if not throughout the region. This makes it well placed to house assets worth billions of dollars and help high net worth individuals expand and grow their wealth. It also helps that Singapore has regulations in place that are stringent yet at the same time allow a certain amount of flexibility among the banking fraternity.
All in all, Singapore is an excellent choice for high net worth individuals. It certainly helps that the medium of instruction in most banks in the country are in English. Whether you are utilising Internet banking or visiting one of the branches to talk to the tellers, you will be greeted with English. This definitely helps foreigners because they know they will have no problems with communicating their needs. Furthermore, Singapore has its own banking laws which do not fall under the jurisdiction of either American or European regulations. This is a large draw for anyone who is interested in such options.
As such, it is not a surprise then that Singapore continues to draw many high net worth individuals in. After all, banking laws are well regulated and account holders know that their privacy and rights will always be upheld. Furthermore, the service accorded to account holders in Singapore is of a high standard which will always be seen as an advantage by high net worth individuals. At the end of the day, they want to know that their assets are secure and kept private. This is definitely the case if they open a Singapore bank account.
Summary steps for Asset protection and tax optimization (Estimated Time: 1-2 days)
Understand Client’s Business protection and Succession Planning Goals
Propose a few suitable structure that suit client’s goals
Agree on the scope of services we will perform and execute within the deadline
Meet up with the client to take up new instructions or update any new changes and perform yearly compliance engagement.
How can you become Singapore Tax resident and enjoy the tax exemption for your Foreign Sourced Income?
At Paul hype page, we will go through your portfolio of business and investments to build a tax efficient structure to achieve your goal.
Singapore Tax Guide to Foreign Sourced Income
According to Income Tax Act, the tax is imposed on the income if the source is in Singapore and income having a source outside Singapore only if it is accrued in, derived from or received in Singapore, unless specifically exempt from tax.
Thus, exemption from taxation for foreign-sourced income becomes an important factor for companies which receive such income.
In addition, IRAS mentions the following clarifications concerning foreign-sourced income:
Foreign-sourced income is only taxable if it is of a company based in Singapore. In other words, foreign-based companies with no Singapore office are able to use Singapore-based banks and fund management institutions without fear of being taxed.
You can use your foreign-sourced income to invest in additional assets outside from Singapore but your company cannot use those investments or expenses as a basis to claim for tax deductions in Singapore.
Non-income funds will be exempt from taxation if you are able to provide proof that the money has no relationship with business-related income. To do this, you should specify income and non-income and provide dates from when the non-income money was remitted to Singapore. You must show proof that the income amounts were not touched.
You can show that the money sent to Singapore is not more than the capital minus any losses incurred. IRAS will also allow you to set off any overseas losses against foreign sourced income received in Singapore.
How to Become a Singapore PR?
You have lived and worked in Singapore for several years, and would like to establish Permanent Residence for you and your family.
Perhaps you have done some research regarding the benefits and responsibilities of such status. Aside from the application requirements, there are several factors that will strengthen or weaken your application.
Additionally, there are important tax implications. Paul Hype Page & Co. offers application preparation, consulting, and tax planning to assist you in the process.
Should your application be rejected, we promise to make the first appeal. We can help you apply for a preferred work visa, devise a plan to move assets to Singapore that minimizes tax, and advise you on how best to present your application as a valuable contributor to Singapore.