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Tax Incentive Requirements for Family Offices in Singapore
  • NEWSLETTER,SINGAPORE

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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The Rapid Rise of Single-Family Offices Amid Wealth Revolution in Asia
  • NEWSLETTER,SINGAPORE

The Rapid Rise of Single-Family Offices Amid Wealth Revolution in Asia

In recent years, Asia has witnessed a remarkable surge in the popularity of single-family offices (SFOs). This marks a transformative evolution in the region’s wealth management industry. Particularly, this shift has been fuelled by the rapid expansion of private capital markets while major Asian economies witnessed robust growth. Affluent families have realized the increasing need for professional wealth management. Naturally, single family office in Singapore is undergoing a steady growth.

Expanding Private Capital Markets

The private capital markets in the Asia Pacific region have experienced unprecedented growth over the last decade. This has been particularly driven by a mix of strategic investments and economic resilience. In this region, private capital expanded at an impressive 13% CAGR between 2013 and 2023. This growth rate outpaces that of other global regions, which demonstrates the burgeoning role of Asia in the global financial ecosystem. Family offices have been instrumental in this rise, channelling significant investments into private markets and fostering a culture of strategic wealth management.

Wealth Accumulation in Asia

While mainland China has seen substantial wealth accumulation, Southeast Asia has also emerged as a key player in the economic expansion of the region. Over the past decade, countries such as Singapore, Indonesia, Thailand, and Vietnam have experienced notable economic growth. This has been fuelled by factors like foreign direct investment, urbanization, and development of infrastructure. Factors like foreign direct investment and urbanization also contribute to the growth of wealth. Naturally, this economic boom has created a sustainable environment for wealth accumulation. Wealthy families are looking for professionals to manage their finances.

The Need for Professional Wealth Management

As Asian families continue to grow their wealth, the need for sophisticated wealth management solutions becomes evident. The projected wealth transfer from baby boomers to future generations is estimated to be around $20 trillion in the coming decade. This has intensified the demand for professional governance frameworks. SFOs are increasingly adopting best practices from institutional investors. These include robust risk management, transparent reporting, and stringent compliance standards. This institutionalized approach to wealth management and asset preservation is rapidly reshaping the family office landscape in Asia.

Government Support and Regulatory Frameworks

Government policies and regulations in key Asian financial centers have further intensified the growth of SFOs. For instance, Singapore has streamlined regulations with attractive tax incentives. This makes it a global hub for family offices. By the end of 2023, Singapore had more than 1,400 SFOs, thanks to government initiatives that support training programs. Other aspects fuelling the growth of SFOs included global networking and philanthropic endeavours.

Similarly, Hong Kong has implemented measures to position itself as a leading destination for family offices. These include tax concessions, the Capital Investment Entrant Scheme, and talent development initiatives. A comprehensive service provider network has also been developed in Hong Kong. Besides, Hong Kong’s development of art storage facilities and philanthropic centres further enhances its appeal to wealthy families looking for a supportive ecosystem for their financial and philanthropic activities.

Beyond traditional wealth management, SFOs in Asia are embracing a broader vision. This includes asset diversification, sustainability, impact investment, and philanthropy. As wealthy families continue to align their investments with values, the focus increasingly shifts towards sustainable and socially responsible assets.

Philanthropy has become a central theme in the SFO landscape. Many families are leveraging their resources and expertise to drive significant social change. As they establish philanthropic foundations to support educational initiatives and tackle environmental challenges, SFOs are playing a crucial role in strengthening philanthropy across Asia.

The Future of Wealth Management in Asia

As Asia continues to consolidate its position on the global economic stage, family offices are set to play an increasingly pivotal role in strengthening the wealth potential of the region. SFOs are preserving wealth and reshaping the future of wealth management in Asia. The rise of family offices marks the dawn of a new era in which wealth is managed with a long-term and impact-driven perspective.

Now that you know why Singapore is the ideal hub for your family office, it’s time to contact professionals like the IMC Group for comprehensive consultancy solutions.

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Singapore Records Surge in Global Mergers and Acquisitions Amid Economic Stability
  • NEWSLETTER,SINGAPORE

Singapore Records Surge in Global M&A Activity Amid Economic Stability

The robust financial resilience of Singapore and renewed confidence among investors is evident from its emergence as a bustling hub for global mergers and acquisitions (M&A) this quarter. The sound economic condition of the country is complemented by its political stability. The past few days alone have seen significant transactions, including a $1.75 billion investment by a Singtel-KKR consortium in ST Telemedia (STT) Global Data Centres, which out-bided global investors. Even more deals are expected, with major international players eyeing tie-ups and acquisitions. Backed by specialized Mergers & Acquisitions Advisory Services in Singapore from experts, top global brands are bracing up for these profitable transactions.

According to the Singapore country head of Bank of America, Singapore has emerged as the centre of gravity for M&A activities in Southeast Asia. The sentiment towards large, transformative inbound M&A from Singapore is increasingly turning positive. Naturally, this sentiment is fuelling confidence for the latter half of 2024 and into 2025.

Since April, the value of deals involving companies based in Singapore has soared to $23.8 billion. This marks a 102% jump from the second quarter of 2023.

Strategic Significance and Economic Outlook

The surge in the number of M&A activities is not only about the number of deals but also their strategic significance. With these large transactions, Singapore further consolidates its position as a key business hub in Southeast Asia. The country is attracting an impressive volume of foreign investment directly from international corporations. Notable transactions include the KKR-led STT data centre deal and the sale of a majority stake in Singapore’s Fullerton Health.

According to experts, many of these deals have been taking shape since mid- to late-2023. This reflects the long-term confidence of investors in the macroeconomic environment in the country. They are keen to invest in promising assets in Singapore, eyeing a strong growth trajectory in the country. The latest survey of the Monetary Authority of Singapore reveals that the economy of the country is projected to expand by 2.4% in 2024. Besides, the benchmark Straits Times Index has risen over 8% since it hit its low last October, which further reflects the confidence among investors.

Notable M&A Deals in Singapore

Some of the recent M&A transactions in Singapore include:

  • OCBC Bank moving closer to taking full control of Great Eastern Holdings with a $1.4 billion offer
  • Shell acquiring liquefied natural gas trader Pavilion Energy from Temasek
  • French industrial group Seche Environment announcing its acquisition of hazardous industrial waste collector ECO Industrial Environmental Engineering for $605 million

The strategic importance of Singapore in the global M&A landscape is evident from these high-profile deals. As investor sentiment improves and economic indicators remain favorable, Singapore is poised to maintain its position as a leading destination for M&A activities in Southeast Asia.

For successful global players, the IMC Group continues to be the first choice as a leading consultant offering transaction advisory services in Singapore. With professionals on the side, global businesses can confidently engage in M&A activities.

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Singapore’s Path to Net Zero: Incentives and Ecosystem for Green Enterprises
  • NEWSLETTER,SINGAPORE

Singapore’s Path to Net Zero: Incentives and Ecosystem for Green Enterprises

With the climate change crisis intensifying all around the globe, different countries are committing to ambitious sustainable targets. Singapore, one of the global business hubs, stands out with its initiative to achieve net zero emissions by 2050. This is a formidable goal for a small island nation with limited land and natural resources.

The government has developed its Singapore Green Plan 2030, which defines the blueprint of concrete sustainability targets for the next decade. According to this plan, by 2026, the country aims to reduce the amount of waste sent to landfill per capita each day by 20%. The plan also seeks to increase the output of solar energy, while Singapore is likely to turn 80% of its buildings by 2030. Enterprises bracing up for Singapore company formation, therefore, need to align their strategies to these sustainability goals. Over the years, Singapore has turned into an attractive destination for eco-friendly businesses. For enterprises incorporated in Singapore, it’s essential to seek professional support from experts to ensure compliance.

Creating a Sustainable Ecosystem in Singapore

Singapore, popularly referred to as the ‘Green City’, offers a robust commercial infrastructure that supports eco-conscious businesses. Currently, the country is prioritizing the development of green buildings, reducing waste, and adopting clean energy solutions. With most of its buildings turning green by 2030, Singapore eyes an 80% improvement in energy efficiency compared to the levels in 2005. Eco-friendly businesses operating in the country have the privilege to choose from a wide range of green options.

Green Tech Industry in Singapore

Singapore has put in consistent efforts to achieve peak energy efficiency, incorporating green technologies. While the country has limited natural resources, the Research, Innovation, and Enterprise Plan (RIE2025) of the Singapore government supports enterprises embracing sustainable practices. Businesses minimizing waste by switching to additive manufacturing can qualify for certain privileges. Moreover, businesses developing sustainable solutions can access abundant resources in Singapore, thanks to its government initiatives. Enterprises can also collaborate with the government, academic institutions, and other businesses to spearhead the green tech industry in the country.

Singapore’s Talent Pool Driving its Green Economy

As a leader in sustainable development in the region, Singapore recognizes the importance of a skilled workforce for a sustainable future. In this country, academic institutions are offering sustainability courses, so that graduates with adequate skills can tap for green jobs. Working adults can also undergo training through sustainability-related programs to acquire transferable green skills. Thus, they can gain competence in crucial aspects like green finance, green engineering solutions, and managing carbon footprint. In Singapore, eco-friendly businesses have access to a pool of talented professionals having proper knowledge and skillsets. Thus, the thriving green economy continues to consolidate in the country, with its reliable pool of talent.

Green Projects Incentives from the Government

The government in Singapore is leaving no stone unturned as the country aims to achieve its net zero emissions target. To make the green transition an achievable goal, the government has come up with generous incentives, ranging from tax benefits to cash grants.

Tax Benefits

The Refundable Investment Credit (RIC) was introduced in Singapore’s Budget in 2024. For investing sizable amounts in projects with decarbonization goals, businesses are eligible to receive a tax credit. This tax credit can be offset against the payable corporate tax income. It will be awarded only on qualifying expenses like manpower costs, capital expenditures, logistics and freight costs, and intangible asset costs. If any tax credit remains unutilized, the company will receive a cash refund within four years. Foreign enterprises doing business in Singapore can significantly benefit from these provisions.
Financing Schemes and Cash Grants

Different government agencies in Singapore are committed to supporting sustainable businesses in the country. These enterprises are eligible for cash grants that cover various business expenses. For instance, the Resource Efficiency Grant for Emissions (REG(E)) co-funds expenditures for industrial facility projects for verifiable and measurable mitigation of carbon. The government has set a benchmark of at least 500 tonnes of carbon footprint reduction per annum for businesses to qualify for this grant, which would cover around 50% of the qualifying costs. This Grant helps businesses cover a part of their expenses incurred to adhere to mandates related to climate.

The REG(E) was first introduced in 2022 for local companies in the retail, food manufacturing, and food services sectors. During the 2024 Budget, it was extended to other sectors like data centres, maritime, and construction.

The Sustainability Reporting Grant helps businesses with at least S$100 million annual revenue prepare their first sustainability report. It will cover up to 30% of the qualifying cost, while the government capped the amount at S$150,000 per company. For SMEs, a new program will be launched to streamline the path to preparing their first sustainability reports. It will cover as much as 70% of the eligible costs for the first year and 50% for the two subsequent years.

Often, establishing a start-up company in Singapore comes with obligations to meet sustainability goals. Startups and businesses can seek loans up to S$50 million from the Enterprise Financing Scheme – Green to support green projects.

What Should Businesses Expanding to Singapore Do?

Businesses expanding to Singapore often need to invest in new materials, technologies, and processes to comply with the stringent sustainability goals in the country. In the short run, no significant cost savings may be visible. However, enterprises benefit from increased profitability over the long run, along with enhanced brand reputation.

Here’s what businesses expanding to Singapore must do:

  • Seek funding: Acquire support from the Enterprise Financing Scheme to support upcoming green projects.
  • Cost-effective approach: Take advantage of tax credits and grants on expenses incurred on adopting sustainable practices.
  • Position the brand as a leader: Establish the company as a frontrunner in the green economy to attract eco-conscious investors and customers.

During Singapore company formation, forward-thinking businesses seek comprehensive professional support from the IMC Group. With experts guiding them through the complex regulatory norms and helping in maximizing government funding, tax benefits, and credits, businesses can confidently achieve their sustainability goals.

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Singapore Leads Investment in Data Centres Amid AI Boom
  • NEWSLETTER,SINGAPORE

Singapore Leads Investment in Data Centres Amid AI Boom

As advancements in artificial intelligence (AI) continue to drive innovation globally, investors in Asia are particularly focussing on data centres. Data centres are essential to support ongoing advancements in AI and data science. This interest has fuelled a competitive effort to build data centres in building data centres among investors in Singapore. Particularly, global businesses are interested in company formation in Singapore to acquire and manage data centres.

In the Asia-Pacific region, data centres have emerged as the preferred alternative asset for REITs (real estate investment trusts). Between the first quarters of 2023 and 2024, there has been a spike in the share of investors prioritizing data centre investments, with the figure surging from 29% to 33%.

Booming Data Centre Economy and Acquisitions by Singaporean Investors

A report evaluates the activities of Singaporean REITs in the data centre sector. Due to a moratorium on data centre construction within Singapore, restrictions have been imposed on domestic investment opportunities. Naturally, investors in Singapore are exploring international prospects.

Last March, Keppel Corporation acquired a partially constructed data centre from Mitsui Fudosan in Tokyo. The company put their trust in the robust growth of the public cloud market in Japan, which is projected to hit the $34 billion (£27.2 billion) milestone by 2028.

In another significant move, less than a year ago, MapleTree Industrial Trust purchased a data centre facility in Osaka for $378 million (£302.6 million). The CEO of MapleTree explained the strategic value of this acquisition, focusing on the prospects of diversifying their presence of data centres in Japan. The CEO also stated that this expansion falls in line with their goals to enhance their footprint in the resilient data centre sector which looks promising for growth.

With AI and eCommerce booming, the acquisition was a strategic move by MapleTree as the company made an inroad into the Japanese market.

Wondering why set up business in Singapore? The surge in data centre investments and the robust support from the government explain why forming a company in Singapore can be advantageous.

According to an expert, data centres accounted for just 1.4% of the REIT universe in Asia in 2022. This segment consisted of two dedicated REITs in Singapore. The expert pointed out that real estate investors in Asia are increasingly turning their attention to data centres. However, no new data centre REIT was listed in 2022 due to challenges in the equity market segment. Currently, several existing REITs are investing in data centres.

Professional Support for Company Formation in Singapore

For companies looking to establish their presence in Singapore, the IMC Group continues to be a trusted partner. This group of professionals streamlines the process of Singapore company Incorporation through its strategic insights, extensive networks, and expertise. The experts also provide invaluable support to businesses as they navigate the stringent regulatory frameworks in Singapore and access investment opportunities.

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Key Aspects Global Enterprises Must Consider Before Incorporating Companies in Singapore
  • NEWSLETTER,SINGAPORE

Key Aspects Global Enterprises Must Consider Before Incorporating Companies in Singapore

As Singapore continues to thrive as a global business hub, forward-thinking enterprises are looking to scale their commercial footprint in the country. As many as 9,000 Indian enterprises have expanded their operations in this dynamic hotspot of business. Besides benefitting from the conducive business environment in the country, the Singapore company incorporation process is easy.

In this edition, we will discuss some strategic considerations for global enterprises before venturing into company formation in Singapore. We have comprehensively evaluated the regulatory and legal aspects in Singapore, along with the prerequisites for forming a company in the country. Along with these, we have comprehensively discussed the tax obligations and priorities like access to talent.

The Legal and Regulatory Landscape in Singapore

Singapore has several regulatory bodies that define how its business ecosystem should operate. These include:
  • Monetary Authority of Singapore (MAS): MAS is the apex body overseeing financial services in the country as well as its central bank. MAS plays a pivotal role in regulatory oversight.
  • Inland Revenue Authority of Singapore (IRAS): IRAS governs all tax-related matters in the country, serving as the national tax administrator.
  • Accounting and Corporate Regulatory Authority (ACRA): ACRA serves as the national regulator for business entities, ensuring compliance and transparency.
  • Singapore Exchange (SGX): SGX is the stock exchange of Singapore, which oversees the regulatory aspects related to public listings.

Essential Requirements Before Incorporating a Company in Singapore

As a business owner, you might be wondering how to set up a local company in Singapore.

Before incorporating a company in Singapore, businesses need to get themselves registered with the ACRA. Here’s the step-by-step process.

  • The first stage involves choosing and submitting a unique name for your business. Business owners can choose from private limited companies, public companies, and unlimited companies, among other structures.
  • The next step requires the company to appoint at least one director and secretary each. This is a mandatory step for every registered company in Singapore.
  • One of the key benefits for foreign enterprises expanding to Singapore is that the country doesn’t impose any limitations on foreign capital limits. The minimum paid-up capital for a private limited company stands at S$1 for both domestic and foreign entities.
  • Businesses also need a registered office address in Singapore which the public can access during business hours.
  • Businesses are also required to register at least one principal business activity with ACRA, with the provision to declare up to two primary activities in most cases.

Guide to Incorporating Your Business in Singapore: Essential Checklist

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Tax Benefits and Obligations for Businesses in Singapore

The tax framework in Singapore operates under two primary scenarios.
  • Territorial basis: Here, taxation applies to income sourced from within the country.
  • Remittance basis: Income generated outside the country will be taxed only upon receipt within Singapore unless exempted.

In case the income is generated from a country outside Singapore like foreign entities or other branches, it will be taxed at 17% on the chargeable income. This norm works unless the business is granted a relief under the Economic Expansion Incentives Act or other applicable concessions.

Different types of taxes like income tax, GST, stamp duty, and withholding tax are levied as a part of the tax ecosystem in Singapore. All these taxes are charged at different rates.

Accessing Talent Pool in Singapore

The Employment Act of 1968 governs the employment landscape in Singapore. Foreign workers looking to find employment in Singapore need to obtain a work permit from the Ministry of Manpower in the country. Here are some of the commonly used passes in the country:
  • Employment Pass for managers, professionals, and executives meeting certain competency and salary criteria
  • Overseas Network and Expertise Pass for highly skilled individuals or high-salary professionals
  • EntrePass for investors establishing their ventures in the country
  • S Pass for mid-level skilled workers
  • Work Permit for foreign workers in particular sectors
Professional Assistance to Register a Private Company in Singapore

While forward-thinking ventures look to expand their operations in Singapore, navigating through the legal and tax complexities is challenging. The IMC Group continues to be your trusted partner as you brace up to register private limited company Singapore. With professionals on your side during the crucial process of company incorporation, you can confidently expand your venture to the dynamic business ecosystem in Singapore.

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Family Offices in Singapore Go For Nature-Friendly Investments
  • NEWSLETTER,SINGAPORE

Family Offices in Singapore Go For Nature-Friendly Investments

An interesting investment trend reveals that single family offices in Singapore are increasingly showing interest in supporting eco-friendly investments. This marks a significant shift in financing strategies to ensure sustainability. Traditionally, nature conservation efforts in Singapore were designed by philanthropic organizations and governments. However, with wealth management companies serving high-net-worth families supporting such investments, the importance of environmental sustainability comes to the forefront along with financial returns.

Global Calls for Nature Conservation Financing

Over the last decade, the United Nations has been urging governments, financial institutions, and the private sector to step up in financing nature conservation. During Ecosperity Week, leaders emphasized redirecting financial flows towards activities that restore, sustain, and protect nature. Top family offices have taken initiatives to scale up regenerative agriculture and protect biodiversity. The IMC Group leads from the front, setting benchmarks in driving such investments.

Some of the leading family offices in Singapore are also focussing on driving investments that enhance ocean health. For instance, plant-based proteins and seaweed farming are some of the potential investment avenues recommended by these groups. Their commitment to sustainability is evident from the fact that they are mobilizing funds from affluent families for essential environmental purposes.

A Change in Mindset through Sustainable Investments

Established family offices in Singapore work with a profit-with-purpose philosophy. They visualize impact investments as a powerful tool to bring about positive changes at large scales. Their approach corresponds to the growing momentum in impact investing across Southeast Asia. A new generation of investors and entrepreneurs are driving this trend with sustainability in their mindset.

Even stock values reveal that companies with strong ESG scores outperform others, demonstrating the importance of sustainable investments.

Singapore as an Emerging For Sustainable Financing

In recent years, Singapore has emerged as a preferred hub for collaborations and partnerships in sustainable financing. Thanks to the consistent inflow of investment and talent, the financial and associated sectors in Singapore are poised to drive sustained innovation and growth. The commitment of Singapore extends to a push for a green economy. Reports reveal that private wealth managers are recommending investments in technologies that cut emissions and protect ecosystems. The goal is to generate revenue through investments focussed on nature. This falls in line with global efforts to address pressing issues like the loss of biodiversity and climate change.

The rise of impact investing also showcases a broader trend towards responsible finance. ESG considerations play a crucial role in driving investment decisions. As governments and institutions around the world come up with disclosures on climate and nature-related risks, investors are increasingly drawn to sustainable assets. These investments ensure a positive impact on the environment while delivering impressive financial returns.

Sustainable Investments with Family Offices in Singapore

Leading family offices in Singapore are poised to spearhead significant changes in the investment landscape. As sustainability emerges as a core aspect of investment strategies, financial institutions, family offices, and government bodies are likely to collaborate to maximize the impact of eco-friendly investments.

The IMC Group continues to be a trusted partner specializing in private client and family advisory services in Singapore. With professional advisors around, affluent families in the country can make strategic investment decisions for a sustainable cause to make the planet more resilient for future generations.

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Singapore Continues to be the World’s Best Business Environment for 15 Years
  • NEWSLETTER,SINGAPORE

Singapore Continues to be the World’s Best Business Environment for 15 Years

Singapore has been on the top of the list as the global leader in terms of offering the most conducive business environment for the fifteenth straight year. Known for its sophisticated commercial infrastructure, supportive business environment, skilled workforce, and global connectivity, the country continues to attract wealth creators and entrepreneurs.

Despite its lack of natural resources and a limited domestic market, Singapore has overcome economic crises in 1997 and 2008. Currently, it boasts one of the most stable economies in the world. The country has witnessed the generation of consistent surpluses with no foreign debt and high revenue for the government. As Singapore stands tall as a global economic hub, forward-thinking foreign players continue to establish their commercial identities in the country.

The Economist Intelligence Unit’s (EIU) recent rankings for the second quarter of 2023 reveal that Singapore is likely to offer the best global business environment for the next five years. While countries like Canada and Denmark closely follow, Singapore remains ahead in the race through continuous innovation. With this consistent excellence, the country will dominate the global list for the 16th consecutive year.

What Sets Singapore Apart for Business Enthusiasts?

In this edition, let’s explore the factors that set Singapore apart for global business enthusiasts.

1. Strategic Geographic Advantage

Singapore is located close to major markets like China and Japan. Thus, it gains easy access to more than 3 billion consumers. Its bustling port, one of the world’s busiest, and the extensive connectivity of the Changi International Airport make it an ideal hub for business ventures. Currently, more than 20 million people use this airport. This provides a strategic reach to business minds to the global business hub.

2. Tax-Friendly Policies

In Singapore, the corporate income tax rate of 17%, is the lowest in the world. The country has a well-structured tax framework that lures businesses. International players look forward to capitalizing on financial advantages and riding the growth opportunities in Singapore.

3. Financial Power

The seamless accessibility to the international business community makes Singapore one of the most well-planned financial centers in the Asian market. With revolution in technology, the country is witnessing a surge in its financial power. According to rankings published by the GFCI, Singapore occupies the third position on the list of vibrant financial hubs in the world. Only London and New York enjoy better positions compared to Singapore.

4. Conducive Business Environment

In terms of ease of doing business, Singapore is one of the leading nations in the world. According to the World Bank, it currently occupies the second position amidst ongoing business tensions. Naturally, business enthusiasts find a safe haven in Singapore.

5. Transparent Regulations and Permits

The authorities in Singapore have streamlined the process of obtaining business permits in the country. With professional support from established companies and transparent processes, forming a company in Singapore is relatively easy.

6. No Double Taxation

In a strategic move to bolster international business, Singapore has signed bilateral tax treaties with more than 50 countries to prevent double taxation. This benefit passes on to entities from different countries engaged in international business in Singapore.

7. World-Class Infrastructure

The sophisticated business infrastructure in Singapore meets global standards. This establishes a solid foundation for businesses across different industries, ranging from biotechnology to fintech and logistics and green initiatives.
8. Skilled Workforce
With a pool of highly skilled and diverse talent, Singapore offers businesses access to a productive workforce. This is essential for sustained growth and success for any business.
9. Incentives
Singapore offers a wide range of incentives to businesses, ranging from tax exemptions and financing schemes to investment allowances. These perks further empower businesses in different sectors to innovate and thrive in Singapore.
Get Professional Help for Company Formation in Singapore

With the startup ecosystem in Singapore looking robust, entrepreneurs are willing to make the most of the business-friendly environment in Singapore. The IMC Group is one of the most revered teams of professionals offering comprehensive assistance for company formation in Singapore. It’s logical to have an experienced team on your side for accurate guidance and mentorship as you expand to this vibrant business hub in Southeast Asia.

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