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This is How Singapore is Attracting Global Investors By Offering Them Residency Header
  • NEWSLETTER,SINGAPORE

This is How Singapore is Attracting Global Investors by Offering them Residency

Singapore, the focal point of business in Asia, has been at the forefront of economic innovation. The country continues to be one of the most preferred places for doing business and attracts international investors through its structured pathways. One of the strategic approaches taken by the country to draw global investors is to offer them residency facilities.

Now, founders who establish a business in the city-state and contribute to the economy of Singapore can enjoy residency rights in the country. The stable economy, transparent legal system, and strategic access to global markets are some of the factors appealing to international investors.

The Singapore Global Investor Program allows foreign nationals to apply for permanent residence status. This initiative targets entrepreneurs and investors keen on making significant financial contributions to Singapore. Its primary goal is to attract affluent individuals looking to establish their homes in Singapore.

The EntrePass & Global Investor Program

Entrepreneurs looking to establish their presence in Singapore can choose any one of the two options designed by the government.
  1. The EntrePass
  2. The Global Investor Program

The EntrePass

The Singaporean government has designed the EntrePass for startup founders with innovative business ideas. Here’s how entrepreneurs can qualify for the EntrePass if meet both conditions:
  1. Applicants must register with ACRA as a Private Limited Company in Singapore (Pass holder must hold at least 30% of the registered company)
  2. Venture-backed or owns innovative technologies

    A company qualifies as venture-backed or possessing innovative technologies if it meets the following criteria:

    • Secured investment from entities such as government funding sources, venture capitalists, corporations, family offices, or angel investors.
    • Created, produced, or brought to market technology-based products, services, or platforms.
    • Obtained patents through an accredited national intellectual property authority.
    • Engages in active research collaborations with a research institution.

Typically, this process takes 8-12 weeks and involves multiple levels of evaluation.

The Global Investor Program

On the other hand, the government has designed the Global Investor Program(GIP) for seasoned investors and business leaders. For qualification, applicants need to demonstrate a strong track record of entrepreneurship and robust finances.

The Favorable Business Environment in Singapore

Singapore is currently placed in the top five countries in terms of ease of doing business. The low corporate tax rate of 17%, minimal restrictions, and streamlined regulations make it the perfect place for setting up an organisation.

In Singapore, startups benefit from generous tax exemptions during their first three years. Moreover, Under the Economic Expansion Incentives (Relief from Income Tax) Act (“EEIA”), the Minister for Trade and Industry has the authority to designate qualifying companies as pioneer enterprises or pioneer service companies. Once approved, these companies can benefit from a tax relief period that lasts up to 15 years, during which any income generated from the pioneer trade will be exempt from taxation.

Singapore invests significantly in R&D, with expenditure accounting for approximately 1.9% of its GDP as of 2021.

This encourages innovation in high-growth sectors like clean energy, biotech, and fintech. This environment also creates a favorable environment for startups.

Strategic Access to Different Markets

Singapore has established an extensive network of 27 implemented FTAs, encompassing both bilateral and regional agreements. These FTAs include partnerships with major economies like China, India, Japan, and the European Union, providing businesses with preferential market access and reduced tariffs.

Innovation for Business

Establishing a business in Singapore is a streamlined process, particularly for global organisations.

Choosing the Right Business Structure: Many foreign companies prefer to establish a Private Limited Company in Singapore. This organisational model provides limited liability protection and enables the subsidiary to function as a distinct legal entity, separate from its parent company.

Next, the organisation needs to register with the Accounting and Corporate Regulatory Authority (ACRA). This process includes:

  • Approving the company name
  • Submitting the documents
  • Licensing specific to sectors like finance or healthcare

The third step involves opening a corporate bank account, which involves formal paperwork. Organisations need to obtain the incorporation certificate, provide the details of the shareholders, and present the business plan.

Professional Support for Setting up a Business in Singapore

Singapore stands out as a compelling destination for global investors and professionals, thanks to its vibrant business landscape and strategic geographic location. As of June 2024, the nation’s population has grown to 6.04 million, with non-residents—including expatriates, foreign workers, and international students—making up about 30.8% of this figure.

The country’s strong residency programs enable easy travel across Asia, creating numerous opportunities for regional projects and collaborations. This ease of access significantly bolsters Singapore’s status as a prime hub for multinational enterprises.

Naturally, global investors are looking to establish their presence in Singapore. Professional consultancy experts like the IMC Group provide comprehensive support during company formation in Singapore, streamlining the process for entrepreneurs and foreign organisations. For startups and established businesses, this professional assistance is crucial to gain legal clarity and ensure compliance while setting up a business in Singapore.

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Key Tax Changes in Singapore’s Budget 2025 to Drive Growth Header
  • NEWSLETTER,SINGAPORE

Key Tax Changes in Singapore’s Budget 2025 to Drive Growth

Singapore announced its budget for 2025 at a time that coincides with the 60th year of independence of the nation. The authorities introduced a suite of tax incentives to strengthen businesses and enhance competitiveness.

 International firms continue to establish their presence in Singapore, fuelling innovation and growth. The new changes in tax policies provide crucial financial relief while they also encourage strategic investments. Thus, Singapore streamlines its position as a global business hub.

In this edition, let’s check out the tax changes in Singapore and how these measures are likely to drive growth.

1. Corporate Income Tax Rebate

Eligible businesses in Singapore can benefit from a corporate income tax rebate of 50%, which has been capped at S$40,000 per company. This rebate significantly eases financial pressure on businesses.

Moreover, firms that employ at least one local worker in 2024 will receive a grant of S$2,000. This initiative primarily supports SMEs, helping them understand economic challenges while planning for long-term expansion.

2. Incentives for Companies

A new Listing Corporate Income Tax Rebate incentivizes companies to go public in Singapore. Businesses that secure a primary listing on SGX can qualify for a tax rebate of 20%.

On the other hand, secondary listings with share issuance receive a 10% rebate. This rebate is capped at S$6 million annually and will be attracting more IPOs. This further reinforces the reputation of Singapore as a global financial centre.

Naturally, businesses trying to establish their presence in the country will be looking for Singapore Company Incorporation advisor solutions from experts.

3. Equity-Based Compensation to Retain Talent

Companies in Singapore have faced difficulties in talent retention in the past. To address this issue, the authorities have introduced tax deductions for Employee Equity-Based Remuneration (EEBR) schemes.

Businesses will be eligible to claim tax deductions for payments made to a holding company or special purpose vehicle for new shares issued under EEBR schemes from Assessment Year 2026.

This decision is set to benefit startups and high-growth enterprises looking to offer stock-based incentives to employees.

4. Expanding Support for Innovation & R&D

The economic strategy of Singapore is largely based on innovation. Businesses engaged in R&D and innovation-oriented projects are likely to benefit from new tax deductions.

Companies will be eligible to claim a 100% tax deduction on qualifying payments made under approved cost-sharing agreements for innovation activities.

5. Double Tax Deduction for International Expansion

Singapore continues to position itself as an ideal base for global businesses. It has extended its Double Tax Deduction for Internationalization (DTDi) Scheme till 31st December 2030. This allows companies to claim a deduction of 200% on qualifying expenses related to overseas expansion. This includes market research, international trade fairs, digital advertising, and business development activities.

6. Strengthening Incentives for M&A

Singapore has extended the M&A scheme till 31st December 2030 to encourage strategic M&A activities. Businesses operating in the country that make qualifying acquisitions can claim an M&A allowance of up to S$10 million per year. This will be written down over five years, and they will enjoy a deduction of 200% on transaction costs, capped at S$100,000 annually.

7. Removal of The Sunset Clause for Share Disposal Tax Exemptions

Singapore has also done away with the sunset clause for share disposal tax exemptions, which were previously set to expire in December 2027. Companies that meet the 20% shareholding mark for at least 24 months will continue to enjoy tax-free gains from share disposals.

Currently, the exemption applies to preference shares, which provides greater flexibility to businesses in structuring investments.

Seek Expert Taxation Services in Singapore

The Singapore Budget 2025 introduces a dynamic range of tax measures. Organizations of all sizes, ranging from MNCs to local enterprises must assess the new clauses and incentives carefully.

 While these measures are likely to foster international expansion and drive innovation, businesses must consult reputed professionals like the IMC Group for taxation services in Singapore. With global competition intensifying, these tax reforms solidify Singapore as a premier destination for investors.

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Family Offices Shaping the Future of Wealth Management in Singapore Header Img
  • NEWSLETTER,SINGAPORE

Family Offices Shaping the Future of Wealth Management in Singapore

Over the last decade, Singapore has firmly established itself as a premier destination for the world’s wealthiest individuals to safeguard their assets. As a result of this trend, the country has witnessed a surge in the number of family offices.

In 2024, Singapore witnessed a net rise of approximately 3,500 high-net-worth individuals. This figure stood at 3,200 in 2023. Some of the prominent figures who set up single family offices in Singapore include Sergey Brin, the co-founder of Google, Chinese billionaire Liang Xinjun, Indian billionaire Mukesh Ambani, and American hedge fund investor Ray Dalio. The influx of wealthy individuals further positions Singapore as a stable and investor-friendly destination.

What makes Singapore the Ideal Hub for Family Offices?

The rise of Singapore as a preferred hub for setting up family offices is the result of meticulous policymaking and governance over the decades. The country attracts wealthy individuals with its favourable business environment, political stability, and robust legal framework.

Some of the key factors that position Singapore as the ideal hub for family offices are presented below.

  • The country is ranked as the third least corrupt country globally and the most transparent nation in Asia.
  • For 15 consecutive years, Singapore has been recognized as the best place to conduct business.
  • Singapore is regulatory environments for financial institutions in Asia and the world.
  • The strategic location of the country makes it a gateway to booming markets in Asia.
  • With a stable currency and legal framework, Singapore has evolved into an attractive hub for secure investments and long-term wealth preservation.

Residency Perks for Family Offices

The residency policies in Singapore, formed through the Singapore Global Investor Program (GIP), are highly favourable for family offices. Under Plan C, qualifying family office leaders can apply for permanent residency. This empowers them to live and work in the country, while they benefit from its lucrative investment environment.

Let’s take a look at these numbers that demonstrate the growth of family offices in Singapore.

  • Singapore is projected to be the millionaire capital in the Asia-Pacific region by 2030. 13% of the Singaporean population are likely to be classified as millionaires by 2030.
  • Currently, more than 2,000 family offices operate in Singapore, marking a 43% Y-o-Y increment.
  • Singapore headquarters 59% of all family offices in Asia.
  • Currently, Singapore has 244,800 millionaires and 47 billionaires.
  • Singapore has surpassed London and is currently positioned as the 4th wealthiest city in the world.

Much of this new wealth comes from Hong Kong, Mainland China, Southeast Asia, and India. Also, American UHNWIs are increasingly expressing their interest in investing in Singapore.

How Do Family Offices in Singapore Invest?

Family offices in Singapore have come up with diversified investment strategies. These wealth management firms tactically balance private and public market exposure. Some of the key investment areas include:
  • Private capital markets: Direct investments, a preference shared throughout Asia.
  • Technology and AI: AI and health tech will be emerging as dominant investment avenues, particularly in the next few years.
  • ESG and philanthropy: According to new tax laws, family offices need to allocate a minimum of at least 10% or up to S$10 million of their assets to local investments.
  • The role of single-family offices in Singapore is crucial, as wealthy individuals continue to shift towards professional management of their finances.

The Shift Toward Professional Wealth Management

A report reveals that 43% of family offices in the Asia-Pacific region are shifting towards professional, non-family leadership. This figure surpasses the global average of 29%. Many SFOs are now hiring from financial services, consulting, and accounting backgrounds, and outsourcing specialized functions to external experts.

As the challenge and complexity of wealth management in Singapore continue to rise, many family offices in Singapore are turning to third-party service providers. Particularly, functions like bookkeeping, compliance, IT integration, and back-office operations are professionally managed by outsourced service providers. Interestingly, 85% of respondents in a survey believe that family offices should outsource middle and back-office functions to curtail costs and improve efficiency.

Professional Consultation for Family Offices in Singapore

The family office sector in Singapore is poised for consistent growth. It is largely driven by the country’s stable economy, world-class infrastructure, and favourable environment for investors. An increasing number of single family offices in Singapore are turning to established consultants like the IMC Group for professional advisory solutions. As global wealth continues to flow into Singapore, the country is consolidating its position as the premier destination for family offices in Asia.

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Family Offices in Singapore record 43% growth in 2024 with 2,000+ new Establishments Head
  • NEWSLETTER,SINGAPORE

Family Offices in Singapore record 43% growth in 2024 with 2,000+ new Establishments

Singapore has cemented its position as one of the leading wealth management hubs in Asia. As evident from statistics, the number of single family offices in Singapore soared by 2,000 in 2024 itself. In 2023, the country had only 1,400 SFOs, which marks a significant growth of 42.9% last year.

Around 600 new single family offices were launched in Singapore in 2024, which is more than double of the 300 that were added in 2023.

While speaking at the UBS Asia Wealth Forum, Second Finance Minister and Monetary Authority of Singapore (MAS) Deputy Chairman Chee Hong Tat explained the popularity of the country as a premier financial hub. He added that the financial stability in Singapore, along with its pro-business policies and incentives from the government make it an attractive destination for ultra-high-net-worth families.

Government Support for Single Family Offices in Singapore

The government of Singapore has been proactive in shaping the investment ecosystem in the country. In September 2024, MAS reported that it granted incentives to approximately 1,650 SFOs by the end of August. This suggests that more than half of the new SFOs were established in the last four months of the year.

One of the key reasons for the spike in the number of single family offices in Singapore is a key policy shift in November 2024. An amendment was made during this time, which allowed non-family employees to hold shares in these offices.

The Strong Economy and Financial Resilience of Singapore

Single family offices are expanding in Singapore at a time when the country’s economy is on a growth trajectory. Singapore recorded a 4% growth in its GDP in 2024, outperforming the 1.1% growth recorded in 2023.

Interestingly, the wealth management sector and financial services form a significant part of the services-producing industries. It contributed to 4.1% growth, surpassing the 3.6% from goods-producing sectors.

Geopolitical Uncertainties That May Impact the Market

 With Donald Trump returning as the US President, experts are wary of certain challenges due to probable trade restrictions. Amidst tariff hikes and the economic slowdown in China, certain risk factors linger in 2025. If Trump decides to follow the 60% tariff rate, the GDP of China may slow down to 3%, further disrupting global markets.

Also, the prospect of higher-for-longer U.S. interest rates could strengthen the US dollar, leading to further depreciation for Asian currencies. An expert suggested that the Chinese yuan may fall to 7.5 against the dollar, while in the latter half of 2025, the Japanese. Amidst the uncertain market conditions, the Singapore dollar could fall by another 2%.

Why Singapore is Advantageous for Setting up a Single Family Office

Now, let’s understand why Singapore is advantageous for setting up a single family office even amidst global turbulence. The country is in a position to weather economic fluctuations. The country has strong fiscal reserves, which provide a buffer to absorb economic shocks. With the upcoming general elections expected in 2025, the new budget statement on February 18 may present a fiscal bonanza.

Also, Singapore’s stature as a global financial hub is expected to draw investors. Currently, the city-state is the top deep-tech startup ecosystem in Asia, and occupies the fourth spot globally. Its reputation for regulatory stability continues to attract investors looking for a strategic base for wealth management.

Advisory Services for Setting up Single Family Offices in Singapore

The government of Singapore is adopting a wait-and-see approach as the country steps into 2025. Finance Minister Chee expressed the commitment of the country to stay adaptable in at a time when the financial environment is evolving.

Top advisory experts like the IMC Group can guide single family offices in Singapore operate with confidence, establishing their presence in the country. The financial stability and favourable policies in the country continues to position Singapore as a premier destination for ultra-wealthy families.

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Private Equity - The Future of Family Office Investments in Singapore
  • NEWSLETTER,SINGAPORE

Private Equity – The Future of Family Office Investments in Singapore

Singapore has rapidly emerged as a global hub for family offices, thanks to its favorable regulatory frameworks and attractive tax incentives from the government. As per the MAS (Monetary Authority of Singapore), the number of single family offices in Singapore has surged from 400 in 2020 to 1,650 by August 2024. This exponential growth demonstrates how the country appeals as a destination for wealth management for affluent families.

Since 2023, wealth management AUM (assets under management) have recorded more than 8% growth. Interestingly, the wealth management sector in Singapore has achieved a CAGR of approximately 10% in the last five years. This impressive performance speaks for the increasing diversification of family office portfolios, with PE (private equity) emerging as a prime asset class.

Private Equity Takes Center Stage Amidst Global Shift

Globally, private equity has overtaken public equities as the leading investment choice for family offices. In 2023, PE investments accounted for 30% of the average family office portfolio, compared to 22% in 2021. Interestingly, public equities, that were once the dominant asset class, witnessed a decline in share from 34% in 2021 to 25% in 2023.

Some notable reallocations took place in 2024 from cash to fixed income and from public equity to PE. Currently, 43% of family offices have exposure to PE, rising marginally from 38% last year.

This trend is particularly evident in the APAC (Asia-Pacific) region. Here, nearly half the family offices are planning to increase their PE allocations over the next five years. Besides aiming to capitalize on high-growth opportunities in this region, these offices are also diversifying into developed markets with fixed income, equities, and alternative investments like hedge funds.

What makes Private Equity Ideal for Family Offices?

Private equity offers a unique combination of high return potential and long-term wealth preservation while allowing investors to diversify their portfolios. We have presented seven reasons why a single family office in Singapore would turn to PE investments.

1. Long-Term Wealth Preservation

Family offices specialize in managing wealth across generations. Their prime goal is to establish long-term investment strategies for wealthy families. The extended investment cycles of private equity seamlessly complement these goals. Family offices can directly participate in growth as they invest in private equities, benefitting from the value appreciation of these businesses.

Private equity also allows families to leave a lasting legacy. They tailor investments based on the values of wealthy families, like supporting sustainability or innovation, or investing in industries that share the same vision as theirs. This approach helps in building wealth while reinforcing the principles of such families.

2. Potential for Higher Returns

Over the last 25 years, private equity has consistently outperformed public markets. These investments offer superior results, thanks to strategic interventions and active management. PE firms focus on enhancing the value of their portfolio companies through mergers, acquisitions, improvements in operations, and innovative governance strategies.

These high-growth opportunities, particularly at early stages, help family offices create significant value. This access to lucrative private markets often surpasses the returns public equity investments deliver.

3. Better Portfolio Diversification

Diversification is the key to effectively manage wealth. Private equity offers investors an avenue to create value in addition to traditional asset classes like equities and bonds. PE investments tend to have lower correlations with public markets, which help them stabilize portfolios during periods of volatility or uncertainty in the market.

Many family offices leverage their entrepreneurial backgrounds to identify and invest in niche sectors or industries where they have deep expertise. With this targeted approach, they mitigate risk and open up the doors for significant returns.

4. Active Involvement and Control

The level of control and influence private equity investments offer is rarely available in public markets. Family offices can directly invest in their portfolio companies and participate in their strategic decisions. This involvement often includes representation in boards or close collaborations with their management teams.

While investments in public markets are standardized, private equity brings in tailored investment structures. PE deals can also be customized to align with the specific needs and goals of a family office.

5. Access to Exclusive Opportunities

Family offices often benefit from access to exclusive investment opportunities unavailable to the broader market. Take the instance of co-investment deals, where family offices invest along with institutional players. These arrangements come with lower management fees, which enhance the overall returns.

Family offices frequently tap into proprietary deal flows through their extensive networks. These off-market opportunities provide a competitive edge, which allows them to invest in high-potential ventures before they become widely accessible.

6. Preserving Wealth Amid Inflation

With inflation rates rising globally, private equity provides an effective hedge through investments in real assets and businesses that have the pricing power. Many PE strategies focus on tangible assets or companies with intrinsic value. This keeps wealth resilient against inflationary pressures. This exposure to real assets enhances the overall stability of the portfolio for family offices.

Professional Consultation for Family Offices in Singapore

While private equity appeals to investors, family offices in Singapore encounter several challenges including the illiquidity of investments and high risk profiles. Along with this active portfolio management has its own set of operational demands.

Working in close coordination with established advisory service providers like the IMC Group, family offices can combat these challenges. These experts provide comprehensive guidance on how to setup single family offices in Singapore, and have a proven track record of providing tailored investment solutions. With a professional edge from these advisors, family offices can align investments to the goals of investors as they stride ahead to their long-term financial goals.

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Singapore Tax Update Key Legislative Developments in October 2024
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Singapore Tax Update: Key Legislative Developments in October 2024

In a major development in the tax regime in Singapore, the Singapore Parliament approved two major bills on October 15, 2024. These are the Multinational Enterprise (Minimum Tax) Bill and the Income Tax (Amendment) Bill, which introduce significant changes in tax to ensure compliance with global frameworks while supporting local economic activities.

For businesses operating in Singapore, it’s imperative to remain abreast of these tax updates to ensure compliance. Consulting established companies providing professional taxation services in Singapore, enterprises can adhere to the latest regulations.

In this edition, check out what these new updates are, and how they can impact your business.

1. Multinational Enterprise (Minimum Tax) Bill

The legislation in Singapore introduced two new top-up taxes under the Base Erosion and Profit Shifting (BEPS) initiative of OECD. The goal of this initiative is to make sure Singapore complies with international tax frameworks. These measures are likely to be implemented from January 1, 2025. This legislation introduces two new top-up taxes under the OECD’s Base Erosion and Profit Shifting (BEPS) initiative to align Singapore with international tax frameworks.

Key Features:

a. Domestic Top-up Tax (DTT)

  • Targets entities in Singapore within large MNE groups.
  • Imposed if the effective tax rate of the group in Singapore is below 15%.

b. Multinational Enterprise Top-up Tax (MTT)

  • Applicable to MNE groups with their headquarters in Singapore.
  • Imposed if the entities of the company in foreign jurisdictions have an effective tax rate below 15%.
  • The MTT ensures that the global effective tax rate for the group is increased to a minimum threshold of 15%.
It applies only to large MNE groups with at least €750 million as the annual group revenue in two or more of the four preceding financial years.

Compliance and Enforcement

The Comptroller of Income Tax is authorized to administer, collect, and enforce the MTT and DTT.

Offences under the new norms include:

  • Failure to maintain proper records
    Tax evasion
  • Obstruction to the duties of the Comptroller
These powers are already in place under the Income Tax Act 1947 to ensure that the IRAS (Inland Revenue Authority of Singapore) can effectively enforce compliance.

2. Income Tax (Amendment) Bill

This bill introduces tax measures announced in the 2024 Budget Statement last February, along with some periodic updates to the income tax regime in Singapore. The provisions under this bill are presented below.

a. Refundable Investment Credit (RIC)

The RIC has been designed to encourage high-value economic activities in Singapore. It provides tax credits for local expenditures, like:
  • Capital investments
  • Research and development (R&D)
  • Manpower training
  • Freight and logistics

Eligible Activities

  • Establishing or expanding manufacturing facilities
  • Setting up headquarters and services operations
  • Conducting R&D and innovation projects
  • Commodity trading
  • Decarbonization initiatives

How It Works

  • Tax credits offset corporate income tax payable
  • Unused credits are refunded within four years of the qualifying claim for expenditures

b. Renovation and Refurbishment (R&R) Scheme Enhancements

The scheme allows businesses to deduct R&R expenses, which are typically not deductible as capital expenses. From Year of Assessment (YA) 2025, qualifying expenses will include designer and professional fees.

Standardized Expenditure Cap Period

Previously, the cap period used to vary, based on the time when a business made its first claim. Currently, the standardized rate involves a three-year cap of SGD 300,000, starting from YA 2025 to YA 2027. Businesses can now opt to claim the entire R&R deduction in one YA instead of spreading it over three YAs. This significantly improves their cash flows.

Why These Changes Matter for Businesses

Now, let’s understand how these changes in the tax regime in Singapore are likely to affect businesses.

1. Global compliance

The DTT and MTT ensure Singapore remains compliant with the global tax framework of BEPS (Base Erosion and Profit Shifting) of the OECD. This will safeguard its reputation as a leading financial hub.

2. Encouraging investments

The RIC provides incentives to businesses to channel their investments into activities driving innovation and economic growth in Singapore while maintaining sustainability.

3. Greater flexibility

New updates to the R&R Scheme now provide businesses with greater flexibility and control over their financial management, particularly in areas sensitive to cash flow.

What Businesses Should Do Next?

Successful businesses are looking to adopt a proactive stance and assess the updated tax structures. For large MNEs, it’s necessary to evaluate their global tax positions and maintain compliance with the DTT and MTT requirements by 2025.

Another challenge involves detecting qualifying expenditures early to maximize benefits under the RIC framework. Forward-thinking businesses are already reaching out to leading companies providing professional taxation services in Singapore, like the IMC Group. Consulting these experts can help in optimizing their tax deductions for expenses related to renovation and refurbishments. With a trusted tax advisory partner providing accurate guidance, businesses in Singapore can remain compliant amidst the new tax regime.

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M&A Market in Singapore Witnesses 29% Growth in 2024
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M&A Market in Singapore Witnesses 29% Growth in 2024

Singapore continues to strengthen its position as a leading regional hub for M&A (mergers and acquisitions). In 2024, the country has recorded substantial growth in such deal values, as evident from the latest data. In the first three months, M&A turnovers that involve Singapore-based companies reached $51 billion, marking a 29% YoY increment compared to the same period in 2023. These figures clearly demonstrate the resilience and attractiveness of Singapore as a global hub for businesses.

With the volume of transactions on the rise, businesses are looking for expert advisory solutions regarding Singapore mergers and acquisitions to remain profitable in the long run.

Eight High-Stake Deals Boost M&A Transactions in Singapore

The boost in M&A deals is largely driven by major transactions. Over the last year, there have been eight major deals valued at over $1 billion. These M&A deals account for a transaction value of $16.2 billion. Some of the notable deals among these were acquisitions by the Australian company Lendlease and Warburg Pincus.

However, the country noted a 25.5% YoY decline in the total number of deals. It reflects broader global market conditions that point to concerns like political instability and valuation issues. As a result, certain businesses have reassessed their strategies.

Surge in Inbound and Domestic M&A Activity

Over the last year, inbound M&A activity in Singapore recorded a striking rise. Foreign investors acquired a number of Singapore-based companies. The total worth of these companies comes to $14.3 billion, which marks a 66.4% increment from the previous year.

These figures demonstrate the increasing appeal of Singapore as a primary destination for investment in the region. M&A activities also witnessed a surge in the domestic front, as total transactions reached $4.5 billion, recording a 15% YoY increment. This indicates a healthy level of consolidation within the local market in Singapore.

A Decline in Outbound M&A Transactions

However, there has been a sharp decline in outbound M&A transactions, where Singaporean companies acquire foreign businesses. At $14.7 billion, the figure is the lowest in the last nine years. This decline can be attributed to factors like discrepancies in valuation, regulatory challenges, and geopolitical uncertainties. Moreover, 62% of CEOs in Singapore reported that they had delayed or abandoned M&A deals over the past year due to these market conditions.

Amidst all these challenges, forward-thinking businesses must have a look at the key regulations for M&A in Singapore. Consulting reputed advisory professionals for due diligence can pave the road to success for global firms.

  • In the M&A market financial services sector emerged as the most dominant player, accounting for around 20% of all transactions. With deals amounting to $10 billion, this sector witnessed a 36% increase from the previous year.
  • With a 15% market share, the real estate sector followed closely, accounting for transactions worth $7.7 billion.

Professional Advisory Solutions for M&A Activities in Singapore

The M&A market in Singapore continues to maintain a positive outlook, with strong growth in inbound activities expected in the coming months. Singapore’s role as a pivotal business hub in Southeast Asia is attracting international investors. This significantly reinforces the reputation of the city as a key center for strategic acquisitions.

For due diligence and expert insights regarding Singapore mergers and acquisitions, global players are partnering with established advisory companies like the IMC Group. Consulting seasoned experts, businesses can strike M&A deals with confidence and propel towards growth in Singapore.

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Tax Incentive Requirements for Family Offices in Singapore
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Tax Incentive Requirements for Family Offices in Singapore

Singapore continues to strengthen its position as a global hub for family offices as a major economy in Southeast Asia. Recent updates to its tax incentives demonstrate a shift towards transparency, philanthropic impact, and local investment. As the Monetary Authority of Singapore (MAS) introduced new regulations in 2023, single family offices in Singapore now need to adhere to more rigorous standards under the major tax exemptions in the country. These include the Enhanced Tier Tax Incentive Scheme (13U), Offshore Fund Exemption Scheme (13D), and Onshore Fund Incentive Scheme (13O).

In this edition, we have explored the eligibility requirements in-depth, along with the evolving role of family offices within the financial landscape in Singapore.

Overview of Key Tax Incentives for Family Offices in Singapore

Tax Incentive Tax Incentive Key Requirements Minimum Assets Under Management (AUM)
13D Offshore Fund Exemption Scheme Non-Singapore residents managed by a Singapore-based fund manager Non-resident in Singapore – No full ownership by Singaporean entities No minimum AUM required
13O Onshore Fund Incentive Scheme Companies incorporated in Singapore 100% Singapore investors – S$200,000 minimum annual spending – Employ at least two investment professionals (IPs) S$20 million
13U Enhanced Tier Tax Incentive Scheme Offshore and onshore entities Open to foreign investors – S$500,000 minimum annual spending – Employ at least three IPs S$50 million
Each of these schemes provides significant tax exemptions for family offices that meet the guidelines of MAS. The schemes have been designed to fostering local investment and ensure compliance with environmental and social governance (ESG) standards in Singapore.

Detailed Evaluation of Tax Schemes For Single Family Offices in Singapore

Now, let’s take a look at the detailed breakdown of tax schemes for single family offices in Singapore.

Offshore Fund Exemption Scheme (13D)

Under the 13D scheme, funds managed by Singapore-based managers on income derived from certain investments are subjected to certain tax exceptions. The eligibility for this exception depends on the non-resident status of the fund in Singapore and a structure prohibiting full ownership by Singaporean entities. However, this scheme doesn’t have any AUM or minimum local spending requirements. It is crucial for compliance and effective tax planning.

Onshore Fund Incentive Scheme (13O)

The 13O scheme encourages the establishment of fund vehicles within Singapore. It targets companies that are locally incorporated. The requirements of this scheme are as follows.

  • Investors must be entirely from Singapore
  • The minimum AUM should be $20 million
  • To strengthen local economic contributions, the minimum annual spending should be S$200,000
  • Professional staffing requirements involve two qualified investment professionals with a monthly income of at least S$3,500

 

Thus, MAS remains committed to foster local talent and developing various sectors.

Investment Allocation

Coming to investment allocation, at least 10% of AUM or S$10 million must be allocated to climate-related investments, local equities, or non-listed funds that are distributed by financial entities licensed in Singapore. Thus, the financial ecosystem will benefit from local investments, including non-listed Singapore companies with a notable presence.

Enhanced Tier Tax Incentive Scheme (13U)

The 13U is the most comprehensive scheme and applies to both onshore and offshore entities. Key components of this scheme are:

  • Jurisdiction: Flexible residency requirements
  • AUM: Minimum S$50 million to qualify
  • Annual local spending: At least S$500,000 to promote consistent reinvestment within Singapore
  • Professional staffing: There should be three investment professionals that support an advanced level of fund management and compliance oversight

In recent years the role of single family offices in Singapore in wealth management for affluent families has gained unprecedented prominence. Thus, it’s imperative to maximize tax incentives through this scheme. It allows family offices to use the tax treaties in Singapore and is applicable to Variable Capital Companies (VCCs).

Local Philanthropy and Contributions to ESG

 The Philanthropy Tax Incentive Scheme of Singapore, designed in 2023, has been effective from January 2024. It provides incentives to family offices that allocate funds towards local and global philanthropic causes. This scheme includes a provision of up to 100% tax deduction, which is capped at 40% of the income of the donor.

With this scheme, Singapore demonstrates its strategic goal to allocate capital toward important social causes. The funds donated to charities in Singapore also qualify as business expenses under the regulations of MAS. Thus, philanthropy has been embedded as a component of compliance in Singapore.

Maximize Tax Incentives with Professional Consultation Services from Experts

The tax schemes in Singapore offer a clear pathway for single family offices to achieve tax efficiency while they support local economic and social initiatives. Established advisory professionals like the IMC Group work closely with single family offices in Singapore to help affluent families manage their wealth and maximize their tax savings through incentives. With expert assistance, single family offices can optimize the tax structure amidst the dynamic regulatory environment in Singapore.

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New Regulatory Framework for Corporate Service Providers: Strengthening Anti-Money Laundering in Singapore
  • NEWSLETTER,SINGAPORE

New Regulatory Framework for Corporate Service Providers: Strengthening Anti-Money Laundering in Singapore

The Parliament of Singapore passed two key legislative measures in July 2024 to draw a line of defense against financial crime. These are the Corporate Service Providers Bill (CSP Bill) and the Companies and Limited Liability Partnerships (Miscellaneous Amendments) Bill (CLLPMA Bill). These two bills are part of a broader effort to tighten the anti-money laundering (AML) laws in the country and improve transparency in corporate ownership.

These changes mark a significant overhaul to the regulatory regime in the country. Particularly, they are likely to impact corporate service providers (CSPs) and LLPs in Singapore. The bills are yet to come into effect, and businesses must consult established professionals for corporate advisory services in Singapore to stay updated through the official Government Gazette.

Key Changes in the CSP Bill

The purpose of the CSP Bill is to regulate corporate service providers more stringently. This way, the bill tries to ensure compliance with AML obligations. Check out some of the key reforms that this legislation introduces.

Mandatory Registration with ACRA

One of the most important changes under the CSP Bill is that all businesses offering corporate services in Singapore need to register with the ACRA (Accounting and Corporate Regulatory Authority). This includes companies that provide services like filing transactions, even if they do not do so directly with ACRA. Besides, the new mandate applies to businesses providing accounting-related services.

Failure to register as a CSP can result in severe penalties. The fines can range up to S$50,000 (US$37,905), while the span of imprisonment is up to two years. This regulatory move ensures that CSPs operate within a controlled framework. The process significantly mitigates the risk of unregulated service providers committing financial crimes.

Compliance with Anti-Money Laundering Obligations

With the new norms in place, registered CSPs will now be held to stricter standards when it comes to anti-money laundering. It’s essential for these firms to comply with AML regulations. Any breach can result in hefty fines and potential criminal liability for both the CSP and its senior management. For each offence, the provision for a maximum fine is S$100,000 (US$75,818).

The effort from the Singaporean government demonstrates its commitment to prevent misconduct, particularly cases like money laundering. Over the years, such crimes have exploited loopholes in the corporate services industry.

Fit and Proper Tests for Nominee Directors

Another significant change is the introduction of fit and proper tests for nominee directors. Only registered CSPs reserve the right to appoint nominee directors, and they need to first assess whether or not the individual is qualified. Nominee directors have a significant role to play in the corporate structure. Appointing unqualified individuals has often been a means to create shell companies for illicit activities like money laundering.

Those failing to meet the fit and proper standard can face fines of up to S$10,000 (US$7,582). This change is likely to prevent the misuse of nominee directorships and enhance corporate governance.

Key Changes in the CLLPMA Bill

The CLLPMA Bill focuses on improving transparency in the ownership structures of companies and LLPs by imposing stricter reporting requirements. The objectives of these amendments are to increase the visibility of nominee directors and enhance the accuracy of records related to company ownership.

Disclosure of Nominee Status

One of the major provisions of the CLLPMA Bill requires companies to disclose the nominee status of their directors to ACRA. While the identities of the nominators will remain confidential, the nominee status of directors and shareholders will be made public.

The purpose of this provision is to ensure that companies cannot hide complex ownership structures or the true identity of individuals controlling the company.

Increased Fines for Inaccurate Registers

The bill also introduces steeper fines for companies and LLPs that fail to maintain accurate and updated registers of registrable controllers, nominee shareholders, and nominee directors. For non-compliance, penalties range from $5,000 (US$3,791) to S$25,000 (US$18,956). Looking forward, companies are likely to take their reporting obligations seriously.

Conclusion

With these two bills in place, Singapore takes a significant leap in its fight against financial crime, particularly money laundering. The country tightened its regulations on CSPs and enhanced the transparency of ownership in companies and LLPs. These laws are likely to make the business environment in the country more accountable and transparent. As these amendments are not yet in force, businesses should consult professional experts at the IMC Group and stay informed on the updates. With professionals on the side, they can remain compliant with the upcoming changes.

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Exploring Investment Opportunities in Singapore for Private Clients in 2024 and Beyond
  • NEWSLETTER,SINGAPORE

Exploring Investment Opportunities in Singapore for Private Clients in 2024 and Beyond

Singapore continues to stand out as a global financial hub, offering a plethora of investment opportunities to global enterprises. This is largely driven by the stable economic environment in the country. The robust regulatory framework and strategic government initiatives make it a great place to expand your business.

As we move into the second half of 2024, private clients, both domestic and international, are increasingly drawn to the dynamic market in Singapore. This is evident from the resilience, innovation, and sustained growth in this global business hub. Naturally, forward-thinking businesses are looking for private client and family advisory services from established consultants.

The Economic and Financial Landscape in Singapore

Resilience has been one factor defining the economy of Singapore, even in the face of global economic challenges. The nation’s strong GDP growth stemming from its prudent fiscal policies continues to attract investors. Other factors driving stability and growth are its sound financial institutions and strategic initiatives. In the second half of 2024, Singapore’s GDP is likely to grow significantly. The diverse economic base driving the country’s economy includes finance, technology, healthcare, and logistics.

Experts point out the critical role of the government in maintaining a conducive investment environment in Singapore. Initiatives such as the Smart Nation strategy and the Green Plan 2030 are not only fostering innovation but also creating new avenues for investment. These investments, along with Singapore’s strategic location, make it an ideal gateway for investors looking to tap into the broader ASEAN region.

Public Market Investment Opportunities

The public markets in Singapore continue to offer compelling opportunities for investors. The Singapore Exchange (SGX) remains a preferred platform for both equity and bond investments. With strong corporate governance and a well-regulated environment, the country appeals to foreign investors. In the second half of 2024, sectors like technology, healthcare, and real estate investment trusts (REITs) will deliver a strong performance. This is likely to be driven by structural growth trends and favorable policies of the government.

For instance, the technology sector has witnessed significant growth due to increased investments in digital infrastructure and innovation. Similarly, REITs focused on commercial and industrial properties are poised for growth. The strong real estate market further supports this growth, establishing its status as a regional business hub.

Private Equity and Venture Capital Prospects

Over the last decade, the private equity market in Singapore has witnessed transformative growth. This attracts substantial investment from both domestic and international investors. Sectors like fintech, healthcare, and green energy have been recording high growth. Investors can benefit from robust returns on their investments from these sectors. It’s advisable to partner with specialist fund managers with deep knowledge in these sectors. With local expertise, enterprises can explore the complex market in Singapore.

This has led to a vibrant ecosystem where innovative startups in sectors like AI, e-commerce, and health tech are flourishing. Private clients also have the opportunity for co-investing in these sectors and capitalize on the potential for high returns while diversifying their investment portfolios.

Sector-Specific Investments in Singapore

Singapore boasts a diversified economy, offering several sector-specific investment opportunities. The technology sector remains a cornerstone of economic growth. It is driven the commitment of the government to digital transformation. Other potential sectors under technology are fintech, cybersecurity, and artificial intelligence, all of which are poised for substantial growth in the coming years.

Healthcare is another sector with strong investment prospects. Areas like biotechnology and health-tech are increasingly drawing investors. The aging population in Singapore, along with the increasing demand for advanced medical services are driving growth in this sector. The focus of the government on healthcare innovation and its support for medical research make it an attractive area for private equity and venture capital investments.

Real estate, on the other hand, continues to be a key sector. The property market in Singapore has shown resilience and steady growth. Opportunities look great in both residential and commercial real estate, particularly in areas witnessing infrastructure developments and urban renewal projects. REITs focused on sustainable and green properties are also gaining traction.

Supportive Government Policies

The government of Singapore has consistently implemented policies that foster a pro-investment environment. Tax incentives like the Global Investor Programme (GIP) and various grants for businesses attract high-net-worth individuals and corporations alike. Singapore’s commitment to sustainability, as evident from its Green Plan 2030, opened up new investment avenues in sectors like renewable energy and green finance.

What Strategy should International Investors adopt?

For international private clients, it’s imperative to adopt a diversified and strategic approach while investing in Singapore. Enterprises must leverage local expertise by partnering with established fund managers and consultants like the IMC Group. These experts provide the much-needed private client services in Singapore, providing invaluable insights into the market. With professionals on the side, businesses can navigate the complexities and make the most of the sophisticated financial structures in Singapore to maximize returns.

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