Web Reviews

By: John Media
A recent news report in Channel News Asia's website stated that many high net worth individuals and enterprises may look towards Singapore to park their assets as the United States tightens the noose around the tax evaders. The traditional tax havens, which have long enjoyed the preference of the rich, are loosing the charm as their images have been tarnished. It is not an isolated exercise by the US alone, in fact the Organization for Economic Cooperation and Development (OECD) members are all coordinating to curb the practice of parking of illegitimate or undeclared assets in tax havens, by forming uniform standard for exchange of tax information and by forging increased cooperation with taxation authorities in the countries.

Many global enterprises and wealthy individuals who are keen about their immaculate image are now in search of destinations that command a genuine reputation. This scenario and the growing investment opportunities in the East will entice investors and enterprises to Singapore which, though not a tax haven, has low tax rates. Singapore is now considering adopting an internationally-recognized standard for the exchange of tax information. Singapore endorsed the OECD Standard for Exchange of Information in March and local laws are being amended to comply with them. According to a statement from the Finance Ministry, Singapore has made substantial progress in implementing the standard. It does not envisage difficulty in meeting all requirements by March 2010, which is the deadline indicated by OECD for compliance. Once this is effective Singapore's reputation as a wealth management hub will be reinforced.

Singapore's headline tax of 18% on companies' taxable income will be further reduced to 17% from YA2010. This will further entice the enterprises, but it is not the tax structure alone that attracts the enterprises into Singapore. The country commands several strategic advantages like its ideal geographic location in the burgeoning east yet proximate to the west, wide spanning FTA network, stable governance, efficient workforce and congenial and crime-free  environment, a thriving enterprise ecosystem and more than substantial economic interactions from manufacturing, services and trading sectors make it an enterprise hub. Thus we will witness more foreign companies setting up their base in Singapore.