Asset Protection
You can protect your assets by setting up an offshore company in combination with a Trust. Choosing the right country to incorporate an offshore company can help you avoid unnecessary and high taxes that would otherwise be payable if the assets were held directly. It can also help protect assets from creditors, adverse claimants and other parties; or help you secure against future claims such as bankruptcy, judgment creditors and other litigants.
Confidentiality
Offshore Companies can offer you complete privacy. If the company shares are held by a Trust, the ownership is legally vested in the trustee, thus gaining the potential for even greater tax planning advantages.
Estate Planning
You can set up a Family and Protective Trusts (possibly as an alternative to a Will) with an offshore company for accumulation of investment income and long-term benefits for beneficiaries without high income, inheritance or capital gains taxes.
Simplification of Transfer of Properties Held in Several Countries
If you own properties in several different countries, you will understand that the sale or probate of properties can get complex and expensive. If an offshore company collectively holds these, the ownership can be transferred by company shares rather than transferring the actual properties owned by the company.
Conduct Business with Low or No Corporate Taxes
Certain countries such as British Virgin Islands allow the formation of international companies with no tax or reporting responsibilities. This means you save money not only from zero corporate tax, but also from reduced compliance and other regulatory costs.
What is a Tax Haven?
A tax haven is normally known as a jurisdiction, which provides a lower tax alternative, which would otherwise be paid in a higher tax jurisdiction. A more correct term to use would be tax planning, because there are ways of mitigating taxes without breaking the law, whereas tax avoidance is generally classified as a crime. There are many countries in the world that are known to be tax havens, including some states in the US.
Singapore is Not a Tax Haven
The financial crisis in the past year has brought greater scrutiny on practices in the financial industry. Switzerland and Liechtenstein, two major private banking dominions, have been criticized as tax havens and are pressured to provide transparency and easier access to information of ffinancial assets they manage.
With the rising economies in Asia and an excellent business infrastructure, Singapore has grown to be the second-largest private banking center after Switzerland. It has, therefore, come under media scrutiny as purportedly a tax haven.
‘Singapore is not a tax haven,’ assured Lim Hwee Hua, Senior Minister of State for Finance and Transport. Singapore has decided to endorse the Organisation for Economic Co-operation and Development (OECD) Standard for the effective exchange of information. The decision further reinforces Singapore as a trusted center for finance and a responsible jurisdiction, with a reputation for strong rule of law. Singapore, however, does offer a favorable tax structure to encourage continual foreign investment. For example, Singapore’s corporate tax rate is now at 17% with several tax exemptions for new startup companies, and there is no capital gain tax in Singapore.
The Low Tax Option
Foreign investors can benefit from low or no tax rate on their offshore and international businesses as long as these businesses are structured and administered to benefit from the maximum tax breaks allowed in Singapore and other countries that have attractive low tax systems.
Opening of Corporate Bank Accounts for Offshore Companies in Singapore
With the strict rules in place for prevention of money laundering and terrorist financing, opening bank accounts in foreign countries has been increasingly difficult. However, opening corporate bank accounts for companies incorporated in Singapore is significantly easier. The stricter banking and finance regulations actually facilitate a more open and transparent process, and hence a simpler way to bring funds into Singapore.
Need More Information?
Our tax specialists at Rikvin can assist you in determining your investment options and advise you on tax planning. Just drop us an email at info@rikvin.com or call us at (65) 6438 8887.