The widespread anger against income inequality, growing clout of populist nationalist leaders and instability in the global economic system has increased the risks associated with owning international investments. As such, many asset holders have turned to Singapore as a safe haven. Known as one of the world’s premier tax havens, the small Asian city-state offers several advantages to international investors and businessmen. The benefits include:
Economic Stability
Singapore’s low inflation and stable exchange rate make it a safe-haven currency in times of economic uncertainty. The Monetary Authority of Singapore (MAS) also maintains a sound regulatory framework for financial institutions, which ensures that these institutions are well-capitalised and can withstand shocks to the economy. Singapore has a highly developed financial system, including a stock market, bond markets, and a thriving capital market. These factors have contributed to the country’s stability, making it a desirable investment destination.
Moreover, the country’s largely corruption-free government and skilled workforce attract foreign investments. MNCs are present in most sectors of the economy, and a high proportion of Singapore’s manufacturing output and direct export sales come from foreign firms. Additionally, the MAS’s managed-float exchange rate policy allows for gradual and modest appreciation of the Singapore dollar. This has further enhanced the currency’s status as a safe-haven currency. In addition, the country has a comprehensive network of trade agreements and strong economic cooperation with other nations.
Political Stability
Singapore is one of the world’s least corrupt countries and a regional hub for thousands of multinational corporations. Its stable business environment, largely corruption-free government and skilled workforce have attracted foreign investment. Foreign firms dominate several sectors of the economy, with MNCs accounting for more than two-thirds of manufacturing output and direct export sales. The government promotes Singapore Investment Haven, via a statutory board, the Economic Development Board of Singapore (EDB) that provides market information, contacts and financial assistance such as grants and incentives for internationalising companies. It also runs overseas centres in major cities around the globe via Enterprise Singapore, another statutory board. Foreign investors are protected by 43 bilateral investment treaties that offer protection from nationalisation and expropriation.
In the banking sector, MAS has removed restrictions on foreign ownership, allowing them to buy up to 40 percent of local banks and financial holding companies. It has also eased restrictions on foreign participation in the stock market and real estate. However, the government maintains that foreign investors are subject to heightened scrutiny in the case of real estate purchases and imposes higher taxes on second or subsequent home purchases by foreigners than for domestic citizens.
Confidentiality
Singapore offers political stability, which makes it a safe haven for long-term financial assets. In addition, the city-state’s banking system is highly regulated and efficient. Furthermore, banks are legally required to exercise due diligence to help prevent money laundering and other international criminal activity. As cash-strapped Western governments seek to improve tax collection and Swiss banks face pressure to open their books, wealthy individuals have started shifting some of their assets into Singapore. Media reports suggest that this amount may reach double-digit billions. This is a good sign that the country is doing its job as a global investment haven. It also provides a good reason for investors to consider Singapore when planning their next move abroad.
Taxes
With a world-class wealth management industry, Singapore is the ideal place to hold assets and investments. Its tax regime is particularly supportive of offshore wealth and investment. Moreover, it supports global tax transparency by adhering to the Common Reporting Standard (CRS). The country has one of the lowest personal income taxes for the highest bracket and does not levy any capital gains taxes. Additionally, it has a number of tax exemptions for foreign banks and global trading companies.
These factors have made Singapore the top choice for individuals looking to diversify their wealth. However, it is important to choose the right jurisdiction based on your lifestyle preferences. This way, you can ensure that your quality of life is not compromised while pursuing financial advantages. In addition, the right jurisdiction will protect your privacy and security. In a time of rising income inequality, the rise of populist nationalist leaders, and backlash against globalisation, it is vital to protect your international assets.
Conclusion
During the Asian Financial Crisis, the Singapore dollar stood out as a safe haven currency. During the global financial crisis and the Covid pandemic, it again proved to be stable. Singapore is a top choice for investors. The country has a well-established rule of law and prudent monetary policy. For enquiries on investing in Singapore, call Immigration@SG at +65 6493 1830.
