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Singapore is Witnessing Unprecedented Growth in Family Office Space
  • Newsletter, Singapore

Singapore is Witnessing Unprecedented Growth in Family Office Space

Overview

Though Singapore has witnessed a more than fivefold jump in the number of Family offices over the last few years, this wealth and asset management space is still in a phase of infancy with enormous potential for future growth. Most of the family offices in Singapore belong to the first or second generation of Ultra High Net Worth (UHNW) families who are planning for their wealth transfer only for the first time and will keep doing so over many future generations promising a booming market for family office services.

Traditionally, family offices have been popular with well-established structures in Western developed countries viz the US and Europe. However, as the Asian continent has put its strong footprint in the global economy with a high concentration of individual wealth and private capital, there has been a surge of this financial business model in Asia, especially in Southeast Asian Singapore. As per data available with the Monetary Authority of Singapore, there are more than 400 family offices in Singapore, and only 200 of such offices manage an estimated value of assets exceeding 20 billion dollars, a whopping sum.

Family offices are private wealth management entities providing cost-effective financial solutions for UHNW families. Family offices employ financial advisors, investment analysts, legal and tax professionals for wealth and tax planning.

Family offices carry out financial and legal activities which are either carried out in-house or outsourced from external service providers. Activities performed by family offices include management and planning of private assets, wealth protection, succession planning, tax planning, lifestyle management, family governance, education, charities etc. While a Single family office in Singapore caters to one single family, multiple family offices can serve more than one family.

Why is Singapore considered attractive for Family Offices?

Multiple reasons are driving the ultra-rich families to flock to Singapore for establishing family offices post-pandemic. Singapore provides access to both Asian and global opportunities for investments and besides the Asian families, many US and European family offices are being attracted to the country with key family figures opting for residing and taking citizenship of Singapore. The main reasons for exponential growth can be attributed to the below-mentioned reasons.

  • Reduced risks of regulatory changes ensuring the safety of assets
  • A competitive corporate tax environment irrespective of residence status and tax incentives through Singapore Resident Fund Scheme, Enhanced Tier Fund Tax Exemption Scheme and Global Investor Programme
  • Presence of investment and international banks planning to double their operations over next two to three years
  • A Matured and Regulated financial market
  • World-class Technology
  • A recognized international hub for financial services and banking
  • Newly introduced Variable Capital Company structures
  • Easy settlement for super-rich families through Global Investor Programme


How do Global Pandemic and Geopolitical Uncertainty help flourish the Family Office Space in Singapore?

Global pandemic and geopolitical instability can be a big positive rather than negative for family offices in Singapore. The fear of morality of the pandemic has indeed made the super-wealthy families vulnerable but the uncertainties also instilled a sense of urgency amongst them. Singapore has one of the lowest death rates from the covid pandemic and many billionaires all over the world have been residing for longer in this city-state.

The pandemic has become an important wake-up call for wealthy families to mobilize resources and step up to bring in the positive changes needed in family offices for reviewing and updating protocols and practices within the family office space, investing more time and money for upgrading antiquated ineffective systems and assessing all forms of risk. The geopolitical instability has also raised safety issues of their assets and a need for relocation to a safer and more politically stable jurisdiction.

Covid pandemic has also triggered the possibility of higher tax regimes and stricter regulatory norms in the foreseeable future necessitating the need for wealthy families to explore better avenues for reducing the tax burden. Populist policies with several monetary stimuli introduced during early 2020 may not be viable for long due to inflationary pressure as already hinted by the Federal Reserve on Fed tapering.

In 2020, many billionaires across the world donated several billion dollars for vaccine development and many ultra-rich families were prompted to serve their communities in their countries of origin. This shift in social responsibility has spurred the growth of philanthropic trusts. Philanthropy helps in bringing people together and helps members of wealthy families do something meaningful by participating for a novel cause and reduce bureaucracy in organizations.

The pandemic also provided a big push in smart digital technologies and data securities providing wealthy families better comfort and safety in wealth management. As per recent surveys, more than 80% of family office respondents agree that artificial intelligence can be the biggest disruptive force in global business. More asset management and hedge fund professionals are joining family offices in Singapore and the technology stack is also growing more sophisticated.

Takeaway

The city-state has world-class technology, a transparent and non-bureaucratic regulatory system, a high standard of health infrastructure and a politically stable government and is attracting the super-wealthy families to set up a Singapore family office in preference to their home countries.

As there are plenty of alternatives available for family office structures and governance framework for addressing varying needs and circumstances, it is advisable for wealthy families to partner with a reputable and trusted partner with professional expertise and experience in providing advice on wealth management and implementing customized and appropriate family office structures.

IMC is led by a team of asset management and legal professionals and can help you set up your own family office in Singapore to provide independent and trusted advice on suitable structure, control and supervision keeping in view the long term needs for wealth management and administration.

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Banking Industry and Key Players in Singapore
  • Article, Singapore

Banking Industry and Key Players in Singapore

Introduction

Banking is considered the backbone of every economy as it directly influences the

financial and economic development of a country and Singapore is no exception. The country’s robust economic development gathered pace as the banking sector grew and became stronger and efficient with time. The importance of the banking sector is equally recognised both in the developed and emerging economies.

Today’s Singapore is the top international financing hub in Southeast Asia, believing and implementing pro-business government policies and practices. Its strategic location as the gateway to the ASEAN coupled with its favourable policies has transformed this country into a banking hub in the region.

The total assets of the banking sector in Singapore is worth more than USD 2 trillion with over 200 banks operating in Singapore.

What is the Monetary Authority of Singapore and what role it played in the Banking Industry?

As the number of domestic financial institutions started growing rapidly along with the entry of foreign financial companies, the financial services sector in Singapore became more complex necessitating the need for better and more cohesive governance and regulatory approach. The Monetary Authority of Singapore was then established in 1971 to address this issue and played the dual roles of a central bank and the financial regulator.

MAS is the regulatory body for financial institutions in the banking, capital markets, insurance and payments sectors and formulated, implements and administers regulations and licensing requirements for these sectors.

More details about the financial institutions under MAS’s regulation and their authorised and regulated activities can be obtained from the Financial Institutions Directory provided in this link.

The Monetary Authority acts as an existing central bank in Singapore with its main function to ensure effective and smooth operations of financial institutions in perfect alignment with the national economic objective. The MAS is responsible for the following:

  1. Monetary policy implementation
  2. Banking systems supervisions
  3. Functioning as the banker to the government and the banks
  4. Controlling foreign exchange reserves
  5. Printing and Issuance of currency
  6. Issuing banking licences

What are the reasons for the thriving banking industry in Singapore?

Following are a few factors that contributed to the thriving banking industry in Singapore today.

  • Liberalisation of local banks
  • Expansion of overseas banks
  • M&A of foreign and local banks
  • Increased competitiveness for pricing and innovative services
  • Investment banking and wealth management services
  • Government policies of Tax and Secrecy rules
  • The phenomenal growth in the number of SMEs

How has the Singapore Banking industry been liberalized over the years?

The significant milestones in the development of Singapore’s banking industry are enumerated herewith in chronological order

  • 1999 to 2001, Liberalisation of the banking sector with a five-year liberalisation package with Qualifying Full Bank (QFB) licensing of foreign banks with an increased number of places of business and removal of 40 per cent foreign shareholding limit in local banks was lifted
  • 2001 marked the second phase of measures granting 20 Restricted Bank licenses over the two years for freeing up competition in the wholesale banking business with a bigger business domain, the restricted banks were re-classified as ‘wholesale banks’ to upgrade all offshore banks to wholesale banks over time
  • 2005, MAS increased the number of places of business for QFBs from 15 to 25
  • 2012, MAS further increased the privileges of QFBs to 50 places of business and introduced Significantly Rooted Foreign Bank (SRFB) framework for the domestic market and depositor protection
  • 2018, introduction of Fast and Secure Transfers (FAST) networks for allowing access to NBFCs
  • 2019, issuance of 5 digital bank licences, 2 digital full banks and 3 digital wholesale banks

Why has the private banking industry grown significantly in Singapore?

The reasons for the private banking industry growth are

  • Increased number of HNIs in Asia
  • Banking secrecy policies
  • Value-added banking services including wealth and lifestyle advisory services, investment strategies, asset protection etc.
  • High banking standard
  • Vibrant and growing capital market
  • Expensive banking activities

What is SME Banking Services in Singapore?

SMEs contribute significantly to Singapore’s GDP and both local and foreign banks offer financial services to these enterprises including trade financing, loans, deposits and insurance. Besides issuing commercial credits, the Singapore government provides various financing schemes to support SMEs in expanding their operations. Maybank, Standard Chartered, City bank, RHB, HSBC and many other banks have SME financing facilities.

What are the different types of Banks in Singapore?

Most of the Singapore banks provide a wide range of banking services to their clients, all corporates, individuals and government agencies including commercial and retail banking, private banking to HNIs etc. There are two types of banks

  • Local Banks
  • Foreign Banks
  • Full banks, Six foreign banks are given QFB status and include HSBC, Citibank, Standard Chartered, Maybank, ABN AMRO and BNP Paribas
  • Wholesale Banks offer similar ranges of services except Singapore Dollar retail banking
  • Wholesale banks are branches of foreign banks in Singapore and include ING Bank, National Australia Bank, Barclays Bank, Deutsche Bank
  • Offshore Banks are also branches of foreign banks and a few of them are Korea Development Bank, Bank of New Zealand, Canadian Imperial Bank of Commerce etc.
  • Merchant banks offer specialized services such as corporate finance, underwriting of shares and bonds, mergers and acquisitions, portfolio management, consultancy etc. Credit Suisse Singapore Ltd, Barclays Merchant Bank Singapore Ltd, ANZ Singapore Ltd, Axis Bank Ltd are some of the well-known merchant banks in Singapore

What are the main banks in Singapore?

The three main local banks are

  • Development Bank of Singapore
  • Oversea Chinese Banking Corporation, OCBC
  • United Overseas Bank, UOB

The six main foreign banks in Singapore include

  • The Hong Kong and Shanghai Banking Corporation (HSBC) Singapore
  • Standard Chartered
  • ABN-AMRO Singapore
  • Maybank
  • BNP Paribas and,
  • Citibank

What are the Banking Laws and Regulations in Singapore?

Besides regulatory legislations, the banking laws and regulations in Singapore provide a broad legal framework for the banking industry to remain in conformity with the latest developments and changes in the world’s banking and finance sectors. All banking regulations are passed and approved by the Parliament.

The banking industry acts include the following

  • Banking Act – The Banking Act governs commercial banks in Singapore
  • Monetary Authority of Singapore Act governs all matters related to and connected to MAS and its operations
  • Anti Money Laundering Regulations
  • Payment & Settlement Systems Guidelines
  • Securities and Futures Act
Conclusion

An economic support package of USD 125 Million has been announced by the MAS for the financial and FinTech sectors to fight against the impending challenges of the covid 19 pandemic and reposition Singapore on a strong foot for immediate recovery and future growth of the banking and financing sector.

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Opening a Bank Account in Singapore for New Company Formation
  • Article, Singapore

Opening a Bank Account in Singapore for New Company Formation

As an investor, if you are looking for a Singapore company incorporation for the first time, you need to open a current corporate account with a bank operating in the country to enable you to receive funds from your customers as well as manage the cash for the company’s operations.

Some banks in Singapore can be opened remotely without your physical presence whereas some other banks require you to be personally present while opening a bank account for your new business.

Banks Allowing you Remote Account Opening

1. OVERSEAS CHINESE BANKING CORPORATION (OCBC)

OVERSEAS CHINESE BANKING CORPORATION (OCBC) is a multinational banking and financial services corporation based in Singapore. Two types of accounts are usually opened and are

Business Growth Account for 100% Local Shareholders and Directors Only. A start-up friendly account suitable for Online Banking purposes with no initial deposit and minimum balance requirement. It needs

  • Account maintenance fee of SGD 10 per month but not levied for the first two months
  • No service fee but incidental overdraft charges of SGD 30
  • SGD 50 early Account Closure Fee if closed before one year
  • Cheque Book Fee of SGD 25 per cheque book except for the first one
  • For transactions, a free bundled package via Velocity@ocbc is available with Free unlimited GIRO and FAST transactions

Business Entrepreneur Account Plus is for both the local and foreign shareholders and directors with or without Business Operations in Singapore. The account features are

  • Minimum Initial Deposit of SGD 30,000
  • Minimum Balance of SGD 30,000
  • No account maintenance fee
  • A monthly service fee of SGD 50
  • SGD 30 if balance falls below the minimum level
  • Early Account Closure Fee of SGD 50 for accounts closed within 6 months of opening
  • Cheque books are issued at no cost and each cheque costs S$0.75
  • A GIRO transaction fee of SGD 0.10 through Velocity@ocbc for every transaction

2. UNITED OVERSEAS BANK (UOB)

UNITED OVERSEAS BANK (UOB) is a leading bank in Asia operating in Singapore. There are three types of bank accounts available to the business communities and include

E-Business Account is suitable for all startups and comes with the following features

  • Deposit of SGD 1000 during account opening
  • SGD 35 as a yearly fee
  • Minimum daily balance of SGD 5000
  • An additional service fee of SGD 15 if the minimum daily balance falls below the required level
  • Early account closing within 6 months attracts a fee of SGD 30
  • Cheque Book Fee is SGD 0.75 per cheque
  • SGD 20 per transaction

Guide to Incorporating Your Business in Singapore: Essential Checklist

Download Checklist

BizTransact Account is good for those doing online transactions and offers the below-mentioned features

  • An initial deposit of SGD 1000
  • No annual fee
  • Minimum daily balance of SGD 80,000
  • An additional service charge of SGD 80 for a low account balance
  • SGD 200 for early account closing within one year
  • Cheque Book is complimentary for the first 30 cheques per month and then charged at S$0.75 per cheque
  • No transaction fee if monthly subscription done for BIBPlus Premium Services

SGD Current Account is ideal for businesses carrying out both online and over-the-counter transactions and comes with the following features

  • An initial deposit of SGD 1000
  • Annual fees of SGD 35
  • Minimum daily balance of SGD 10,000
  • An extra service fee of SGD 35 low account balance
  • SGD 30 towards account closing within 6 months
  • No Cheque Book Fee for the first 30 cheques in a month and then charged at S$0.75 per cheque
  • SGD 20 transaction fee per month if BIBPlus Premium Services subscription is done

3. THE DEVELOPMENT BANK OF SINGAPORE (DBS BANK)

THE DEVELOPMENT BANK OF SINGAPORE (DBS BANK) is a multinational banking and financial services corporation in Singapore offering the following bank accounts to the entrepreneurs

A business Digital Account is an ideal option for Small Business startups, with a low minimum balance. And online transactions facilities with the below mentioned features

  • An initial deposit of SGD 1000
  • No minimum balance
  • No extra charges for low account balance
  • Free GIRO transactions
  • SGD 18 monthly fees
  • SGD 25 per cheque book

A corporate Multi-Currency Account is ideally suited for companies with a business presence in many countries who can open a single account and do banking in 12 different currencies. The account comes with features as

  • SGD 3000 initial deposit
  • Minimum balance of SGD 10,000
  • SGD 40 monthly fee
  • Low balance charges of SGD 35
  • Free cheque book facility
  • No transaction fee for GIRO and SGD 20 for FAST
Standard Chartered and City Banks are also popular and offer a single type of account.

Banks Needing your Physical Presence while Account Opeining

Other banking solutions that are available in Singapore normally require the physical presence of foreign investors while opening a bank account. Some of the notable and popular banks with an established market presence in Singapore are discussed below.

1. MAYBANK alias Malayan Banking Berhad, Malaysia is a very popular bank in Singapore offers

FlexiBiz account offers attractive options to young entrepreneurs and startup companies with no monthly charges, no minimum account balance, good interest rates on balance maintained and 24 hours free net banking facility.

  • SGD 1000 for account opening
  • SGD 50 for the closing of accounts before 6 months
  • A cheque book fee of SGD 0.5 only when the minimum balance falls below 30,000 SGD

PremierBiz account offers 0.318% interest per annum with a free cheque book facility and needs

  • SGD 1000 during account opening
  • SGD 30,000 minimum balance
  • SGD 50 for early account closure

2. CIMB Bank is headquartered in Kuala Lumpur, Malaysia is a strong bank and offers the following account types

SGD Current Account with no interest and no monthly fee needing

  • SGD 8000 initial deposit
  • SGD 8000 minimum balance
  • SGD 40 for early account closure in less than 6 months
  • SGD 35 for balance below 8000 SGD
  • Free cheque book

SGD BusinessGo with 0.30% interest per annum and no monthly fee requiring

  • SGD 30,000 initial deposit
  • SGD 30,000 minimum account balance
  • SGD 40 for early account closure
  • SGD 88 fall below the service fee
  • First cheque book free and then SGD 25 for every cheque book

3. RHB BANK headquartered in Kuala Lumpur, Malaysia is a well-named and popular bank in South East Asia including Singapore and provides two types of bank accounts with unlimited free transactions
Bizpower Quad account offers a competitive interest rate of 0.188% to the account holders with the below features

  • A minimum initial deposit of SGD 1000
  • Average daily balance of SGD 5000
  • A service fee of SGD 25 if the daily balance falls below a minimum level
  • Closure of account within 6 months attracts SGD 60
  • Offers preferential FD rates for a balance of SGD 50K and above
  • Provides two free cheque books during account opening and afterwards at SGD 5 per cheque book

Bizpower Quad+ offers a better interest of 0.588% per annum and needs

  • Minimum deposit of SGD 30,000
  • Average daily balance of SGD 20,000
  • SGD 50 for non-maintenance for daily balance
  • Early account closure fee of 200 SGD
  • Preferential FD rates are offered for a minimum 200K balance
  • Provides complimentary cheque books

The bank’s price guide shared above may vary bank to bank based on business activity and structure of the Company.

The private banking industry is expanding rapidly in Singapore as they are offering high-end sophisticated banking solutions e.g. corporate and investment banking apart from traditional lending and borrowing activities. Singapore banks are professional, providing a high level of service, security, safety and banking secrecy coupled with tax-friendly attitude towards their customers and extremely cooperate with new investors for new company set up in Singapore.

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Key Things to Consider When Managing Payroll in Singapore
  • Article, Singapore

Key Things to Consider When Managing Payroll in Singapore

Singapore Employment Act mandates that as an employer in Singapore, you must pay the salary of your employees a minimum once a month and within 7 days once the salary period ends based on the terms and conditions of the employment contract.

Payroll management can be tricky and complex however there are professional, experienced and reliable payroll services in Singapore that can effectively address all your issues related to payroll management including CPF contributions, leave claims, taxes, employee benefits etc. and ensure regulatory compliance of timely salary payments to your employees.

How is salary defined?

Remuneration is commonly known as salary that is paid for work performed as per employment contract and includes allowances except provident fund contribution paid by the employer, travelling allowances, on the job expenses, retirement benefits etc.

What should be the frequency of disbursement of salary?

The Employment Act defines that employers pay the salary every month as a minimum.

For regular work, the salary must be paid within 7 days after the end of the salary period and for overtime, the date of salary payment may be extended up to 14 days maximum.

How can the salary be paid?

Payslips for individual employees must be generated before paying the salary and can be paid on working days at the place of work or any other place mutually agreed between the employer and the employee. Salary can be directly deposited in bank accounts.

What items are mandatory in a payslip?

Every payslip must have a mention of the following items

  • Full name of employer.
  • Basic salary.
  • Date of payment or dates if payment is made more than once.
  • Allowances paid for salary period, such as all fixed allowances, e.g. transport. All ad-hoc allowances, e.g. one-off uniform allowance.
  • Start and end date of the salary period.
  • Total overtime hours worked and payments made.
  • Full name of the employee.
  • The basic rate of pay.
  • Total number of hours or days worked or pieces produced.
  • Any other additional payment for each salary period, such as Bonuses, Rest day pay, Public holiday pay.
  • Overtime payment dates.
  • Net salary paid in total
  • Deductions made for each salary period including the mandatory deductions e.g. provident fund contribution and any other deductions e.g. leave of absence.

How long the records of payslips must be retained?

All the payslip records must be retained and maintained for at least two years for all current employees and either in hard or soft forms. Two years’ ex-employee payslips must be retained for a year after the employee leaves the organisation.

What are the mandatory payroll contributions in Singapore?

The Singapore Employment Act stipulates some mandatory contributions to be made by the employers to the employees and are

1. Central Provident Fund (CPF)

In Singapore, both employers and employees must make mandatory contributions in a social security savings scheme known as CPF.

An employer must make CPF contributions at the monthly rates specified in the CPF Act and recover individual employee’s share of the contribution by deducting the same from their salaries.

CPF contributions must be made at the end of every month and failing to pay by the 14th of the next month may attract penalties including late payment interest charges and in cases hefty fines up to SGD 5,000 and even imprisonment or both.

The CPF contribution rate applicable for your employee is determined by the nature of citizenship like Singapore Citizen or Singapore Permanent Resident (SPR) and its status, salary band and total monthly wages. The allocation rates differ from contribution rates and depend on age group and employee type.

CPF contributions are compulsory for the following payments

  • Basic salary per month
  • Incentives, Allowances and Commissions
  • Bonuses paid annually
  • NSmen make-up pay
  • Payments for overtime

CPF contributions are not payable for gifts and reimbursements.

There are different caps applicable for Ordinary Wage and Additional Wages and CPF contribution is calculated accordingly. The maximum contribution for ordinary wages is calculated at SGD 6,000 at present.

The maximum of additional wage’s contribution towards CPF contribution equals to ordinary wage contribution of SGD 72000 minus SGD 102,000 annually.

Details of CPF contribution and allocation rates applicable for employers can be obtained from this link.

2. Ethnic Fund

An ethnic fund contribution must be made by the employer based on the ethnicity of the employee every month and deposited to the respective welfare funds along with the employee’s contribution.

3. Skill Development Levy

Irrespective of being a full-time, part-time, casual, or foreign employee, employers need to make mandatory contributions towards a skill development levy and its calculation varies depending on the salary of the employee. The first SGD 4,500 of monthly salary attracts a 0.25% levy with SGD 2 as a minimum.

4. Foreign Workers Levy

Employers are required to pay levies if they hire

Employing foreign workers with work permits or S passes attract foreign workers levy based on the qualifications of employees and the sector-specific business activities of the employers.

What deductions are not allowed in the foreign workers’ salary?

Singapore Employment of Foreign Manpower Act stipulates that expenses incurred on foreign employees for the following reasons are not deductible from the salary of foreign workers

  • Recruiting costs
  • Medical expenses
  • Medical insurance premiums paid
  • Work pass renewal costs
  • Costs of repatriation
  • Payment made towards levies
  • Security bond payment
  • Mandatory training expenses

What salary payments are not compulsory in Singapore?

The salary payment of the 13th month Annual Wage Supplement (AWS), bonuses and variable pay is not compulsory unless specifically mentioned either in the employment contract or the collective agreement reached with the employee union.

Is outsourcing Payroll Services beneficial in Singapore?

Payroll management is a non-core business activity and involves many complexities and hidden costs in Singapore. There are multiple benefits of outsourcing payroll services in Singapore as it offers huge savings on cost, time and valuable resources and ensures real-time payroll management, payroll reporting, tax support and regulatory compliance.

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Singapore is Emerging as the Most Preferred Investment Hub in Asia for Indian Entrepreneurs
  • Newsletter, Singapore

Singapore is Emerging as the Most Preferred Investment Hub in Asia for Indian Entrepreneurs

The cultural and business relations of India with Singapore dates back to the 9th century Chola dynasty and most Indian business entrepreneurs feel at home while anchoring their business vehicles on Singaporean soil. More than 10% of Singapore’s citizens have Indian ethnicity with Tamil as an official language. The name Singapore has also been derived from Sanskrit.

In a growing trend over the last few years, many Indian businesses, especially startups are choosing South East Asia for their business expansion and company registration in Singapore is becoming the most favoured choice. Indian companies looking for capital can have easier access to several fundraising opportunities to set up their business establishments in Singapore.

India and Singapore have long been enjoying very good bilateral trade and investment relationships and the Comprehensive Economic Cooperation Agreement (CECA) reached in 2005 further boosted the partnership.

Several MOUs were also signed between the two countries during the visit of the Indian Prime Minister in 2018 to foster collaboration between Indian and Singapore startups and pave the way for the Indian companies in Singapore to better explore the Asian markets.

Singapore contributed to more than 29% of FDI received by India during 2020 with its export close to 9 billion USD. The country is also home to over 8,000 Indian companies.

 

Why Indian Companies are confident of doing business in Singapore?

Singapore is known as the gateway of Asia and has a robust and resilient economy, skilled and educated workforce, excellent infrastructure facilities and a high standard of living with a per capita GDP close to 60,000 USD in 2020 offering Indian startups an ideal business climate for making investments with greater confidence. A high level of digital infrastructure and the adoption of innovative technologies have also played a crucial role in advancing the business competitiveness of Singapore. Indian FDI to Singapore touched more than USD 60 billion in 2018.

IIT- Kanpur in a joint effort with the Singapore Indian Chamber of Commerce and Industry (SICCI) launched a Start-Up Incubation and Innovation Centre (SIIC) that would act as a springboard for technology-based startup businesses.

 

Why Indian investors are more attracted to Singapore?

Innovative policies of the Singapore government are at the core of the country’s booming startup ecosystem. Besides cultural compatibility, many other reasons drive Indian investors to this foreign country.

 

1. Ease of doing business

Innovative policies of the Singapore government are at the core of the country’s booming startup ecosystem. Besides cultural compatibility, many other reasons drive Indian investors to this foreign country.

2. Strategic location in the heart of Asian flourishing market

Presently the Asian economy is the fastest growing in the world and with a GDP of almost 3 trillion USD backed by a large population of 650 million, this continent is all set to fly in a high growth trajectory.

3. Multiple bilateral treaties and agreements with India

Besides CECA with India in 2005, Singapore has also entered into Double Taxation Avoidance Agreement (DTAA), Bilateral Air Services Agreement, Defence Cooperation Agreement, MOU on Foreign Office Consultations, Mutual Legal Assistance Treaty, Mutual Recognition Agreement on Nursing as well as cooperation in fintech. DTAA substantially reduces the tax burden of Singapore based Indian holding companies.

4. Favourable Tax Climate

Singapore’s tax system is one of the top attractions for Indian investors. The country imposes a moderate corporate tax of 17% and doesn’t levy any capital gain tax. Significant tax incentives are offered by the government and especially during the first three years of incorporation of businesses. Income from businesses up to 74,570 USD are tax exempt. GST is imposed at a flat rate of 7% which is lower compared to many other countries.

5. World Class Infrastructure

Singapore provides world-class land, port and aviation facilities including a robust digital infrastructure.

6. Transparent Governance

The regulatory bodies in Singapore follow a high level of transparency with minimum bureaucracy. As most of the business activities are carried out online and free of any corruption.

7. Easy Access to Funding and Capital

Easy access to affordable financing is another reason that lots of Indian investors are being drawn to Singapore. The country has witnessed a meteoric rise in venture capital funding in recent years and is considered the top startup funding hub in Asia. Financing for new entrepreneurs or startups for business expansion is available through loans, equity funding, government grants and angel investing. The Singapore government has also initiated many grants and business accelerators for specific sectors.

8. Conducive import-export tax regime

Singapore only imposes customs duty on certain categories of imports including tobacco, liquor, automobiles and petroleum products with no export duty.

9. Liberal Immigration policies

Singapore offers EntrePass to overseas investors willing to start and operate a business in Singapore that can be obtained easily and transparently.

10. Strong Intellectual property (IP) Regulatory Framework

The Ministry of Law observes a strong IP policy to safeguard the interest of high technology companies

11. Fast and Effective dispute resolution

Singapore authorities provide quick and cost-effective resolutions of business disputes to Indian investors through the Singapore International Arbitration Centre (SIAC).

12. Partnership opportunity with a Singapore Company

Partnering with a Singapore company can be rewarding for Indian investors willing to set up a business in Singapore as it eliminates customer and business development from scratch reducing business establishment cost greatly. However, the process of checking registered companies in Singapore must be carefully verified through an online information retrieval system of ACRA.

 

Which company types of Indian investors can establish in Singapore?

Indian entrepreneurs desirous to start a business in Singapore can choose the following business structures

  • Private companies limited by shares
  • A Branch office
  • A representative office (RO)
  • A Variable Capital Company (VCC)

 

Conclusion

Singapore has come into prominence as one of the most attractive businesses and investment destinations in the world primarily due to government policies, free and transparent investment landscape, ease of doing business, skilled human capital, conducive start-up environment, smart technology adoption and sound technological infrastructure.

If you are in the lookout for setting up a company in this business friendly country, there are experienced and reputed corporate service providers with a local base who can help you on how to start a business in Singapore as a foreigner.

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Singapore Emerges as the New Silicon Valley in Asia
  • Article, Singapore

Singapore Emerges as the New Silicon Valley in Asia

Singapore is a hotbed for new business ventures. It may be viewed as the Silicon Valley of Asia, thanks to its convenient location and the opportunities open to investors. Tencent, ByteDance and Alibaba built regional hubs in Singapore. According to news reports, ByteDance is planning to add hundreds of jobs over the next three years; joining an international coterie of tech giants that already have headquarters or significant operations in Singapore.

Singapore- The New Silicon Valley of Asia

Recent global politics and trade wars between the US and China, made many tech experts believe that a new technological epicentre is readily emerging and Singapore in all likelihood will take that sweet spot due to its independent political status and unprecedented financial growth led by robust innovative technologies.

Singapore, soon after being independent in 1959 had become the manufacturing and financial centre due to its open and business-friendly policies and slowly became the most sought business destination to the global MNCs, SMEs, startups, and companies driven by technology over the years. More than 80% of the world’s top technology companies have their presence in this small island nation and many more are still rushing to doing business in Singapore.

Key Factors helping Singapore emerge as the New Silicon Valley of Asia

Singapore, the tiny sea city in South East Asia, has secured the top spot as the most potential world-leading technology hub and left New York behind for its Government Policy reforms, Ease of doing business, Advanced IT Infrastructure, Digital Support Initiatives, Intellectual Property Laws, English speaking skilled talent pool, Ease of access to funds including the presence of many high tech firms from USA, China and many other parts of the world.

Government Policy Reforms

Government policy reforms which are insignificant play over the last two decades have started bearing fruits now promoting business and investment in the country due to lower taxes, fewer capital restrictions, and liberal immigration policies. In its commitment to sustainable economic development, the country is mobilizing all possible resources and rolling out policy reforms to build robust technical infrastructure and investment opportunities.

The Smart Nation initiative, launched in 2014, is focusing on increased technology penetration into every aspect of the country’s urban and rural population.

Many government establishments have also been incorporated to help new businesses e.g. Economic Development Board (EDB) and the Standards, Productivity and Innovation Board.

The Government has also prioritized studying and learning technology courses to fill the talent gap including the introduction of several tech-focused graduate programs to produce local tech talent. Many companies encouraged by the government are already having satellite engineering teams in Vietnam and India for practising engineers.

Singapore Visa Programme, TechPass Singapore has been launched recently to allow established tech entrepreneurs, leaders, or technical experts from around the world to enter Singapore and contribute to the various tech innovations.

In a visionary move, the National University of Singapore launched a startup-incubation space called Block 71 in a renovated industrial building way back in 2011 embracing an identical strategy introduced in Silicon Valley.

Singapore Blockchain Innovation Programme (SBIP) has also been initiated recently to help companies commercialize blockchain technology.

Intellectual Property Rights

There is a strong IP regulatory framework prevailing in Singapore offering confidence to high technology companies that their R&D investments are well protected in this country.

Strategic Location

In the World Bank’s “Doing Business” 2020 rankings, Singapore ranked as second best and only after New Zealand also securing its rightful position amongst the first six countries for ease of starting a business. With world-class IT infrastructure, the country provides the most suitable conditions required for technology development.

Investor friendly business climate

The sea city Singapore is small in size however acts as the gateway to many parts of Asia and provides easy access to the fast-growing billion-dollar tech markets.

Technology Initiatives

The Singapore government is also promoting an AI hub and developing a dedicated data science consortium besides the SBIP and continuously striving to required technological amenities to technology startups.

Singapore also has a National Trade Platform that serves connecting businesses by establishing links between importers, exporters, banks, logistics firms, customs, shipping agents, and other stakeholders.

Technology Ecosystems-Presence of International Tech Firms

Singapore enjoys good diplomatic relations with both the USA and China and many big American technology companies are already there in Singapore for quite some time now including IBM, Google, Facebook Inc, Twitter, Microsoft and Salesforce.

Early this year, some other fast-growing technology companies have migrated into Singapore to expand their existing businesses in the USA and China and include Zoom, Twitter, PayPal, Tencent, Alibaba, and ByteDance, the artificial intelligence company.

The presence of high profile tech companies as well as other foreign companies wanting to relocate to Singapore equates to big investments flowing into the Republic amid the ongoing COVID-19 pandemic.

English speaking country

Language can be the biggest barrier in business communication and Singapore speaks and officiates in English, a universal language making it is for foreign companies to incorporate their business in the country. Many international schools are also available in the country offering good education and learning to the children of foreign business executives.
Access to Capital

As the angel investing ecosystem was behind the rapid progress of technology companies, especially the startups in Silicon Valley through the early years providing requisite capital and financial support, likewise the venture capitalists with more than 150 VC funds are becoming the money source for the Singapore tech companies for the last six years. As per a report published by Enterprise Singapore, venture funding has grown up more than 10 times in Singapore since 2018.

Singapore has a large network of technology startups that have attracted significant government subsidies lately. The government has assured 85% or a maximum of $0.5 million investment in approved start-ups in Singapore under Singapore’s Technology Incubation Scheme.

Conclusion

Everything is in favour of Singapore in its race for becoming the new Silicon Valley in Asia except the availability of tech talents that is in high demand. While large enterprises are capable of sourcing talents, smaller start-ups are finding it difficult to get talented employees. However, Government is strategizing and implementing measures to address this issue.

The pandemic may have slowed investor and business expansion momentum around the world, but global technology corporations have been booming in a time when digital interactions have replaced physical ones out of necessity.

Foreign company registration in Singapore is straightforward and particularly so if a well-reputed local PRO services company is hired.

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Eureka Network Opens Global Co-Innovation Opportunities for Local Singaporean Firms
  • Newsletter, Singapore

Eureka Network Opens Global Co-Innovation Opportunities for Local Singaporean Firms

Cross border innovative collaboration has now become possible and easy for local business establishments with company registration in Singapore as the country joins 45 member countries across the globe as a member of the Eureka network. Local Singapore companies will benefit from multiple opportunities by collaborating with foreign partners on innovative value-added projects and grow.

Eureka was launched in 1985 as an Intergovernmental network to facilitate and support real-world market-based R&D projects propelled by innovative technologies from academic institutions, industries and research centres. There are more than 45 member states in Eureka presently including the European Union represented by European Commission, South Korea as a partner country and four associated states namely Singapore, Canada, Chile and South Africa. The other members are from different countries from Europe, North America, Asia and Africa representing almost all the major continents.

Singapore embraced the Eureka network concept, extending its support and officially joining this network of international cooperation in research and development as an associate country on Tuesday, May 18 2021.

Partner countries working as a consortium on an R&D project must focus either on a new product or a service or a new process with a maximum of 3 years duration. No individual country or organisation is allowed to claim more than 70% of the total cost of a project. For a Singapore local company, it must meet the eligibility criteria of Enterprise Development Grant (EDG) before applying.

The agreement was signed by Trade and Industry Minister Gan Kim Yong and Austrian minister for digital and economic affairs Dr Margarete Schrambock at the Global Innovation Summit 2021 convened virtually.

As per this agreement, Enterprise Singapore (ESG) will support the facilitation and funding of joint innovation projects between entities from Singapore and other Eureka member countries and explore further partnerships within the network.

Singapore’s association with the Eureka network will enable local firms greater access to other markets by participating in joint innovation projects and by exploring various initiatives including

  • Eurostars calls given twice a year for joint innovation projects between entities from 36 member countries
  • Eureka Clusters, Thematic calls announced by European industries under Eureka which are normally long term and strategically significant
  • Eureka Network Projects Programme, a flexible vehicle that allows Eureka member countries to build a country specific product, process or service theme as short term projects


Before joining the network officially, ESG worked with Eureka on three co-innovation calls, through which more than 40 Singapore firms worked on joint innovation projects with overseas enterprises from more than 20 countries.

– The first Eureka Globalstars-Singapore call was introduced in 2019 and there were seven Eureka countries including Belgium, Czech Republic, Denmark, Netherlands, Spain, Turkey and the UK. This call received 36 joint applications along with 17 projects across the medtech and advanced manufacturing sectors chosen for funding.

– In 2020, the second Eureka Globalstars-Singapore call was even bigger and included 14 participating countries e.g. Austria, Belgium (Flanders), Canada, Estonia, Hungary, the Netherlands, Poland, South Africa, South Korea, Spain, Switzerland, Turkey, Ukraine and the UK from the Eureka network besides Singapore. It received the highest joint applications to date among all the Eureka Globalstars calls, 84 numbers in total. More than 20 new projects across the transport and logistics, medtech and space tech sectors were selected for granting funds.

–  Singapore was among the 16 countries that participated in the first Eureka Clusters Artificial Intelligence (AI) Call last year. Two projects involving Singapore companies were funded.

EverComm, an energy start-up, was one of the firms that received funding from the second Eureka Globalstars-Singapore call last year with the partnership of British tech firm Ionate to develop a platform for equipment performance optimization and now looking for opportunities in Taiwan and Thailand as well.

Artificial intelligence cluster call in 2020 also witnessed two projects involving local firms getting selected for grants.

Enterprise Singapore’s director of global innovation network Jonathan Lim commented, “Even amid the challenging conditions of a Covid-19 environment, Singapore companies actively participated in these co-innovation calls. This shows their keen interest to engage in research and innovation to develop stronger offerings, as well as their desire to capture new overseas opportunities. We are excited to become an Associate Country of the Eureka network as this provides the opportunity for Singapore companies to participate in all Eureka initiatives and tap into the know-how of entities from over 45 countries. We also welcome Eureka member countries to work with us, and leverage Singapore as a launchpad to access the growth opportunities in Southeast Asia.”

Earlier, Singapore local companies had to partner with a minimum of two other entities represented by two Eureka member countries as an Associate member. However, Singapore companies can participate on a one to one basis.

To benefit from the enormous opportunities presented to the investors by Singapore, it is advised that foreign investors seek support from a professional and credible local firm and find out how to start a business in Singapore as a foreigner and comply with ESG and EDG eligibility requirements.

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Chinese Corporates Eye on Singapore and Malaysia amongst Asean for Business Growth and Expansion
  • Newsletter, Singapore

Chinese Corporates Eye on Singapore and Malaysia amongst Asean for Business Growth and Expansion

The Chinese corporates are eyeing the Association of Southeast Asian Nations (ASEAN) with increasing focus on Singapore and Malaysia as these two countries are all set to witness significant growth and opportunities in business and investment over the next year.

Approximately 43 per cent of companies surveyed echoed their confidence in Singapore company incorporation and company registration in Malaysia as leaders of future growth and expansion in the emerging ASEAN economy and a majority of Chinese corporates hopeful on ASEAN economic potential expect to see their businesses grow in near future.

The survey was conducted for the bank’s Borderless Business highlighting the China-Asean Corridor report and exploring prospects and opportunities for the future cross-border growth between both regions.

All the 43 China-based companies surveyed during last April considered Singapore and Malaysia as the most potential markets for growth and expansion opportunities of their businesses in the ASEAN.

While the highest number of China-based companies to the tune of 65% voted in favour of Malaysia, 60% of participants from the surveyed companies emphasized their future business focus on expanding in Singapore for increased market share by promoting sales and production opportunities. Thailand too figured in the list with 53% China-based companies expressing faith in the ability of this emerging ASEAN economy to do well during the post-covid period.

Singapore is being considered by the China-based corporations as a major regional procurement hub and 44% of these companies expressed their willingness to build a regional Research and Development (R&D) centre, an innovation centre basically in the country, as these companies plan to expand across ASEAN.

The survey observed that 56% of the companies have been focusing on the ever-increasing vast consumer market access as the most critical success factor while some 53% of similar companies considered government support and business incentives by the ASEAN as critical for business viability, stability and long term sustainability.

51% of the company participants mentioned that the availability of a reliable supplier base in the ASEAN is also one of the most significant rationales behind their business expansion in the ASEAN region while 47% of the companies were found in agreement with the fact that the presence of the Free Trade Agreements (FTA) network in the ASEAN is crucial for the world market access.

88% of companies noted that the Regional Comprehensive Economic Partnership (RCEP) in this region is one main reason for attracting foreign investments and even the China-based companies are seriously considering increasing their investments in the region by a minimum of 25% in the coming three to five years.

Chinese business houses were also seen to be aware of the risks and challenges within the ASEAN with 70% stressing upon the Covid-19 pandemic or other health issues. A good number of respondents, some 67%, considered ASEAN’s geopolitical instability and trade conflicts as business risks when another 67% of corporates raised concerns over the muted revival of the economies in this region along with a decrease in consumer spending.

One of the most important challenges cited was the way the Chinese business entities would align their business model to the existing ASEAN business environment and trade practices while initiating new business ventures in this region over the next six months and a year.

The survey revealed 56% of corporates strongly evaluating other business risks and challenges such as regional regulatory aspects, monetary transactions and payment methods and infrastructure besides relationship building with prospective suppliers. 56% of respondents have also been found strategizing on getting along with the regional supply chain and logistics.

During this survey, a sizable number of respondents comprising 58% of the China-based companies were found interested in executing digital transformation programmes and another 47% were seen looking for long term growth and sustainability driven by environmental, social and governmental (ESG) initiatives. Another 44% of the surveyed companies have been found eager in exploring new partnerships and joint ventures to enhance market share during business engagement in this ASEAN region.

Chinese companies have been seen seriously considering strategic support for business growth and expansion in the ASEAN. Approximately 60% of these Chinese companies were found desirable for suitable banking partners with a strong repute of finance and cash management potential and 56% of these companies also wanted to foray into trade financing services widely. Fundraising and corporate financing services projects are also being eyed upon by 56% of the corporates.

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Why Singapore’s Single Family Offices (SFOs) are now becoming so Hugely Popular
  • Article, Singapore

Why Singapore’s Single Family Offices (SFOs) are now becoming so Hugely Popular?

An Overview

Singapore’s origin as a financial hub can be traced back to the British colonial time and the sea city in recent years has attracted many tourists and wealthy individuals to its shore for anchoring their businesses and establishing their families. The country has demonstrated significant resilience in financial sectors amidst the covid 19 pandemics and performed better than many of its Asian peers by registering new company formation in Singapore.

Individual wealth and private capital have grown significantly over the past decade and Singapore has witnessed a surge in Single-Family Offices (SFOs) growing fivefold over the past couple of years. As confirmed by the Monetary Authority of Singapore (MAS) the SFOs are neither registered nor licensed entities and as of December 2020, there were some 400 SFOs in Singapore with an estimated asset of USD 20 billion.

Why Singapores Single Family Offices

What are Single Family Offices?

SFOs are privately managed wealth management entities designed and developed to fulfill the needs of Ultra-High-Net-Worth-Individuals (UHNWIs) by providing unique solutions for wealth, finances and many other affairs of a UHNWI’s family.

Though managing investments and related finance and administration activities are the key functions, the SFOs may also involve other activities including management of accounts, tax filing and compliance, managing charities, family governance and lifestyle management, risk management and wealth and succession planning.

Generally, financial advisors, investment analysts, legal and tax professionals are employed by SFOs for wealth planning and operational matters.

Why is Singapore chosen for Single Family Offices?

A growing number of SFOs in Singapore can be attributed to the following factors
  • Reduced risks of regulatory changes and business environment.
  • Political stability.
  • World Class infrastructure.
  • Transparent Legal System.
  • Presence of investment and international banks.
  • Regulated financial market.
  • High standard of living.
  • Expertise in business services, banking and Fintech.
  • A competitive corporate tax rate.
  • Strategic location in the middle of Asia.
  • Good Business connectivity.
  • Availability of financially skilled manpower.No Bureaucracy.
  • Availability of Tax Incentives.
 

What are the Activities carried out by Single Family Offices?

There are a few activities SFOs excursively carry out in-house while others are fully or partially outsourced.

The tasks that usually come under the purview of the SFOs are

  • Technologies usually outsourced except for the handling of social media.
  • Bookkeeping, accounting, budgeting and cash flow planning are often outsourced to accounting services in Singapore .
  • Tax and wealth planning, only regulatory compliance is done in-house while tax planning is outsourced.
  • Operations except hiring and employment are usually managed by external services.
  • Investments including planning, policymaking, asset allocation are done in-house.
  • Legal services are outsourced.
  • Family governance, education and succession planning are mostly outsourced.
  • Charitable services are managed by external sources.
  • Risk management about fraud and data theft, insurance, managed both in-house and by external agencies.
Family Office Singapore
 

What is the business form of Single-Family offices?

An SFO structure normally involves a holding company or a trust directly owning both the SFO and the fund entity as assets. Single-family offices are normally formed by wealthy families desirous to manage and control their finances, businesses and various aspects of their lives and each beneficiary is a connected person to the settlers of that trust or a charity.

The SFO structure aims for achieving dual purposes, firstly obtaining the licensing exemptions and then availing tax exemptions including tax incentives. However, being eligible for tax incentives under the Income Tax Act, a fund manager must have real operations in Singapore as per the Section 13X incentive. The law also stipulates that an SFO must engage a minimum of three investment professionals, each having five years of investment experience.

The register of shareholders of the holding company is centrally maintained and treated as a non-public register with effect from 2020 and the information on ultimate beneficial owners are never shared.

Likewise, the trust companies are needed to collect and maintain information about the ultimate beneficial owners of the trusts they administer, but there is no public register of trusts or their ultimate beneficial owners.

How are Single Family Offices incorporated?

Several regulatory and administrative requirements are involved in establishing an SFO including the registration of the corporate structures, bank account opening, annual filing of tax returns and adhering to common reporting standards (CRS) and foreign account tax compliance act (FATCA).

By incorporating your Singapore Company on an SFO platform, you will enjoy several benefits including easy wealth transfer without probate, asset protection, asset allocation flexibility considering future succession planning, confidentiality, and ease of charities and donations.

Singapore Trust Companies Act (Cap. 336) applies to SFOs with the MAS as the regulatory authority. Wealthy families can either choose to outsource a licensed professional trustee or set up their own Private Trust Companies (PTC) requiring no licence. A licensed trust company however must be engaged in monitoring counter money laundering and terror financing activities.

Setting up an SFO in Singapore is mostly simple and straightforward however corporate service providers with adequate fund management and administration expertise often become the necessity for effective SFO operations who can help evaluate ongoing NAVs and performance about other asset classes, identify annual audit and exemption requirements, choose annual and semi-annual financial reporting, register with ACRA, engage a company secretary and appoint a nominee shareholder for signing company’s constitution.

How is the taxation for Single Family Offices?

The prevailing corporate tax rate is 17% in Singapore on income sourced and/or remitted in the country. There is no capital gains tax with many tax exemptions available. Singapore also entered the Double Tax Avoidance Agreement (DTAA) with many countries and offers tax exemption to resident corporate taxpayers on foreign dividends.

The legal and tax environment makes Singapore a preferred destination for establishing an SFO and the following points are considered from a taxation perspective

  • Individual tax residency based on the number of days spent in Singapore.
  • Compliance obligations.
  • Reporting requirements under CRS.
  • Transfer pricing.
  • Immigration under Global Investor Program.

Change to Income Tax Act; Effective December 31st, 2021.

As a result of the 2020 Revised Edition of Acts, the following sections will be renumbered in the Income Tax Act:
  • Section 13CA is now renumbered as section 13D,
  • Section 13R is now renumbered as 13O, and
  • Section 13X is now renumbered as 13U.

From 18 April 2022, the criteria for Section 13O and 13U schemes will be more stringent.

The Monetary Authority of Singapore (MAS) has announced more stringent criteria for the family office incentive schemes. These new requirements for new applications under section 13O (previously section 13R) and section 13U (previously section 13X) will be effective from 18 April 2022 onwards.

The criteria for the section 13O scheme have been updated to include a minimum fund size, investment professionals to be employed by the manager, and local business spending. There is also a new requirement for funds to invest in local businesses.

  Section 13O Section 13U
Minimum AUM (based on Net Asset Value) S$10 million at point of application which is to be increased to S$20 million within 2 years. S$ 50 million at point of application (no change).
Investment Professionals Minimum of 2, with a 1 year grace period that may be given to employ the 2nd investment professional. Minimum of 3 with at least one of them not being a family member. A 1 year grace period may be granted to meet this requirement.
Local investments 10% of AUM or $10 million, whichever is lower. A 1 year grace period will be granted if this cannot be met at time of application.
 
–    AUM < S$50 m S$200,000 S$500,000
–    $50 m > AUM >= S$100 m S$500,000 S$500,000
–    AUM >= S$100 m S$1 million $1 million

Local investments include investments in equities listed on local stock exchange, equity investments in unlisted Singapore companies, qualifying debt securities and funds distributed by fund managers in Singapore.

The minimum amount of total business spending is now based on amount of Assets Under Management (AUM).

What is family wealth is invested by Single Family Offices?

Depending on goals and objectives, there can be many investment planning that an SFO can be resorted to. However, no change in investment is possible once approval from MAS is received under 13X and 13R.

The SFOs normally don’t focus on equity investment of other companies shares and normally make their major investments in

  • Buying residential properties.
  • Buying shares of private equity firms.
  • Real estate investment.
  • Ownership and investment in fund structures.
 

What are the challenges encountered by Single Family Offices?

The following are the three issues encountered by SFOs in Singapore

  • Cross-border tax issues at the individual level due to the presence of a family in several tax jurisdictions due to its global presence.
  • Inefficient tax structure due to inappropriate business form.
  • Lack of a formalised governance structure due to the absence of proper policies and procedures.

Conclusion

High-net-worth families have currently embraced Singapore for setting up SFOs though traditionally they have been popular and well-established in North America and Europe.

The high growth trajectory of SFOs in Asia is comparatively recent and projects the unprecedented economic upliftment of this continent. Wealth accumulation has become faster by businesses in Asia than in any other part of the world and also driving new SFOs being formed in Singapore.

The need for proper succession planning has never been so important before the tremendous rise in family wealth and can only be successfully addressed by outsourcing professional service providers.

Top Reasons Why You Should Outsource Your Finance and Accounting Services

A Complete guide for doing business in Singapore

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Letter of Consent (LOC) for Dependant’s Pass (DP) Holders also Business Owners in Singapore
  • Article, Singapore

Letter of Consent (LOC) for Dependant’s Pass (DP) Holders also Business Owners in Singapore

A Dependant’s Pass holder looking for a company setup in Singapore and running a business can now apply for a letter of consent subject to fulfilling certain eligibility criteria. Business operations however can only be started after receiving the LOC.

Eligibility Criteria

1. For being eligible to apply for a LOC, you need to own one of the following types of businesses

  • Locally incorporated ACRA-registered Sole Proprietorship business or
  • Locally incorporated ACRA-registered Partnership Business or
  • If you are a Director of a company and in possession of a minimum 30 per cent shareholding in an ACRA-registered business

2. For being eligible for a renewal of the LOC, the following conditions apply

You shall require to hire a minimum of one Singaporean / Permanent Resident

  1. Earning the prevailing Local Qualifying Salary as a minimum and
  2. Receiving CPF contributions for at least 3 months

Local Qualifying Salary (LQS)

Earlier known as the Full-Time Equivalent salary, the Local Qualifying Salary (LQS) is used for determining the number of local employees that can be used to calculate your Work Permit and S Pass quota entitlement.

The LQS ensures that local workers when hired are not paid on a token sum to add to their headcount for S Pass and Work Permit quota entitlement to access foreign workers rather employed meaningfully. LQS also ensures that the government maintains effective quota control keeping pace with income levels.

A Singaporean or a Permanent Resident employee contractually hired under a set of terms and conditions, including the company’s director, is counted as one local employee if they earn the LQS of at least SGD 1,400 per month.

Existing LOC DP holders who are business owners

If you are a DP holder and running a business on an existing LOC, you are allowed to continue to do so till it remains valid or you can apply for a one-off renewal of the LOC until 30 April 2022. and after that, they must meet the eligibility criteria for LOC renewal or otherwise obtain an applicable Singapore work pass to continue working.

Validity of the Pass

  • For First-time Applicants, the pass is valid either one year from the date of issuance or up to the expiry of DP and whichever time is shorter
  • For Subsequent renewals, the validity remains up to the date expiry of DP
The LOC stops being valid under the following conditions
  • The DP is cancelled
  • The DP is expired
  • The business ceased to be active needing cancellation of the LOC

Application Process for LOC for DP holders who are business owners

You can apply for a Letter of Consent to work in Singapore if you are an eligible Dependant’s Pass holder who wishes to operate a business.

Application for LOC is free and usually takes 4 weeks unless other information is sought by the regulatory authority. EP Online provides online services for the LOC.

Before submitting your application for LOC, you need to verify if your DP has a minimum of 3 months validity or else, you must renew your Dependant’s Pass before applying.

The Processing time for LOC is normally 4 weeks maximum in most cases.

The Process

1. Submitting an online request to apply for a LOC.

You normally receive the feedback of your application request within one week. Once your application request is approved, you can go ahead and apply for the LOC using EP Online.

You may also engage an authorized employment agent or a third party for submitting an online LOC application request.

2. Verifying your application status after 3 weeks unless additional information is needed.

3. Logging in to EP Online and printing the LOC.

Renewal, Cancellation or Replacement of a LOC for DP holders who are business owners

You are required to renew your LOC before its expiry. However, if you can also cancel your LOC if you so desire in case your business ceases to be active or operational. In case your LOC is lost or damaged you can request a replacement.

Replacement of your LOC

You must report once your LOC is lost and then make a request for a replacement.

Cancellation of your LOC

You must make a cancellation request within one week after your business becomes non-operational. You are allowed to put your cancellation request up to 2 weeks in advance

Except for advance requests, LOC cancellation is done immediately by logging in to the myMOM portal.

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