Tax haven is not a new concept. Consequently, the idea that Singapore is the best tax haven in the world did not appear yesterday. Many of our readers are wondering – who in today’s situation might need such a business tool as a tax haven? Why focus on the midshore (there are taxes in Singapore, as well as the register of beneficial owner)? Why indeed? What’s so special about Singapore tax haven? The answer is fairly simple.
Singapore tax haven does not offer zero taxes, lack of government control, and the opportunity to open an account with a minimum package of documents. If you are interested in these features, choose clean offshore companies, of which there are many. Tax haven (tax haven) is different.
The flat corporation tax rate here is 17%, and it is usually the first thing that businessmen talk about in connection with this country. However, while this tax rate has certain benefits in simplicity and monetary value, there is so much more to Singapore’s tax system that can bring enormous benefits to investors. The opportunity to conduct efficient international business, pay low taxes, enjoy fiscal benefits and preferences, and to be protected from any claims of international financial regulators is what an entrepreneur can expect to get in Singapore. Therefore, if you are interested in tax haven as an alternative to pure offshore companies, Singapore will be a good choice. The best tax haven in the world is indeed in Singapore!
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Singapore Tax haven – zero taxes (*with some exceptions):
- Profit of a capital nature from the sale of assets;
- Income from banks / financial companies in Singapore;
- Income from foreign sources*;
- Profit from the sale of shares (until 2027);
- Withholding tax (when paying dividends).
Singapore tax haven – most important features for taxes and business:
- Personal income tax rate is 0-24%, rate for non-residents – 22%;
- GST rate is 7%;
- 17% corporate tax, plus tax haven offers many benefits and deductions;
- Property tax (residential buildings) is 0%-16% / 10%-20% (on one condition – that the property owner resides in Singapore);
- Tax haven Singapore does not use CFC rules;
- Territorial principle of taxation;
- 98 actively functioning DTCs.
What does all this information tell us? At the very least, that the tax haven in Singapore is a great place both for asset protection/diversification, and for conducting real business. Don’t let the very term “tax haven” confuse you. Singapore is nothing like classic offshore companies, so the status of “tax haven” does not come with any possible problems with international financial regulators.
We also need to note that Singapore once again confirmed its status after introducing the European Savings Tax Directive. Immediately after that, wealthy residents of the European Union began to massively transfer assets to Singapore, since the tax haven offered conditions similar to those given by the banks in Switzerland. Only in the case with Singapore, the tax haven status made it possible to “ignore” the tax requirements of the European Union. Also important is the fact that the tax haven in Singapore is not on any “gray” or “black” lists, so there are no financial / reputational risks for Singapore itself in attracting the capital this way.
Singapore Tax Haven, Corporate Tax Incentives
The status of Singapore as a tax haven was further strengthened in 2020, when the rules for obtaining tax credits or deductions were simplified. Fortunately, they did not turn the Singapore tax haven into a pure offshore, because classic tax-free tax havens in modern realities are more of an evil than an advantage.
Singapore tax haven – company registration incentives:
- 75% on the first SGD 100.000 of income, the term is the first 3 years of evaluation;
- 50% on corporate income for the next SGD 100.000.
Singapore tax haven – general benefits for all companies:
- 75 % exemption on the first SGD 10,000 of normal chargeable income, and;
- An additional 50 per cent exemption on the next SGD 190,000 of normal chargeable income
- on the next SGD 190.000 of income.
Singapore tax haven – conditions for participation of companies in SUTE (Start-up Tax Exemption Scheme):
- Being incorporated in Singapore;
- Being a tax resident in Singapore for that financial year;
- The company having no more than 20 shareholders, on condition that:
- All of the shareholders are individuals, or;
- At least one of the shareholders is an individual holding at least 10% of the issued ordinary shares.
- Having no property/investment holding status.
Singapore tax haven – income tax based on income over the first three years of business:
- Up to SGD 100,000 – 4.25%;
- From SGD 100,000 to SGD 200,000 – 8.5%;
- From SGD 200,000 SGD to SGD 2,000,000 – 17%.
Singapore tax haven – income tax based on income, starting from the 4th year of doing business:
- Up to SGD 10,000 – 4.25%;
- From SGD 10,000 to SGD 200,000 – 8.5%;
- From SGD 200,000 SGD to SGD 2,000,000 – 17%.
Permanent Residence in Singapore Tax Haven
Most immigrants to Singapore become proud holders of the permanent residence status through the Employment Pass / Global Investor Program. If you are interested in the tax haven of Singapore as a jurisdiction of permanent residence, please contact our experts and discuss all the options and procedures with them.
Singapore tax haven – getting permanent residence:
- Investments of SGD 2.5 million in a new / existing company in Singapore.
- Investments of SGD 2.5 million into a fund approved by the Global Investment Program.
Singapore tax haven – additional information about residence permit and getting permanent residence:
- Singapore has special procedures for providing permanent residence to skilled and educated foreigners;
- There is a procedure for obtaining permanent residence called “Entre Pass”. It allows a person to qualify for a special Employment Pass when registering a company in Singapore. The Employment Pass makes it possible to obtain a visa (on condition of at least SGD 50,000 of paid-in capital).
Real Estate in Singapore
The Singapore tax haven attracts very wealthy people, and the area of land in Singapore is extremely limited. Therefore, do not be surprised to find extremely high prices in the real estate market. For example, USD 800,000 for a one-room apartment, even if it is located in a prestigious area. In addition, in an effort to protect local citizens, Singapore authorities have introduced additional restrictions that make it extremely difficult for a foreigner to buy property in this tax haven.
Prices for luxury real estate are also enormous. A comfortable ticket to the tax haven with accommodation (a 5-bedroom apartment with a gorgeous view and a swimming pool) will cost USD 20 million, and this is not the limit. VIP real estate property (generally scarce in Singapore’s tax haven) will cost even more, and there are not so many offers on the market. We have to admit that Singapore tax haven is not designed for a tight budget.
If you are satisfied with renting real estate in Singapore, then the situation is much more encouraging. Cheaper rented accommodation in this tax haven is possible to find. For example, renting one room will cost from USD 2,000. If you don’t intend to have such a Spartan existence in your tax haven, you can certainly pay more, but you can still avoid overspending.
Conclusions and Expert Advice
Singapore tax haven is an excellent opportunity both to register offshore companies that are considered onshore all over the world and to lead an ordinary comfortable life. One of the few notable disadvantages of Singapore is high prices for real estate. However, if you choose to rent accommodation, you can fit in a relatively modest budget. Those who understand all the advantages of the concept of tax haven in the midshore format, will certainly not be regarding real estate prices are the main factor for their choice.
If you already have foreign income, you can enjoy all the benefits of Singapore and territorial taxation. Tax haven Singapore is a very attractive and safe space with high living standards. Your children will be able to learn Chinese and English as their native languages, and when they grow up, they will be in great demand as professionals. And while the children are growing, their smiles inspired by the warmth and sunshine of Singapore will warm your heart, too.