Being one of the few remaining nations with AAA rating and stable outlook, along with ongoing efforts in financial services industry, Singapore’s economic development and competitive tax regime have made the country a park for cash.
Historically, Singapore is a highly developed market-based economy, along with Hong Kong, South Korea and Taiwan, Singapore is one of the original Four Asian Tigers. A couple of updates and thoughts on investing in Singapore:
- Year to date, the country’s $38 billion REIT market returned an average 37 percent, twice the gains in the U.S., U.K. and Japan. On the demand side, the tax incentives, which include exemptions on foreign income received by Singapore-listed REITs and distributing at least 90 percent of their income as dividends to unit holders, further boost appetite for this investment vehicle.
- Thus far in 2012, the Singapore dollar is the best currency performer, after the Philippine peso among the 11 most-traded Asian currencies.
- Singapore boasts the world’s biggest budget surplus relative to economic output (cited from IMF); in addition, it possesses the world’s tenth largest foreign reserves.
- Geographically, Singapore is a major international transportation hub in Asia, positioned on many sea and air trade routes. On the other hand, Singapore has the highest trade-to-GDP ratio in the world at 407.9 percent as of 9/30/2012, signifying the importance of trade to its economy.
- Singapore’s financial infrastructure and government policies that favor low taxation and its cutting-edge technologies support it being a leader in private banking and wealth management.
- The pro-business framework works hand-in-hand with an effective and comprehensive manpower development framework, facilitating the country’s education, training, and continuous upgrading of workforce skills.
- In Singapore, taxes are levied on the income of companies and individuals. There are goods and services tax and property tax. However, there is no capital gains tax. Beyond that, Singapore has an established network of 65 comprehensive double taxation agreements. With these treaties currently in force, Singapore tax resident company may avail itself of treaty benefits on its income sourced in the respective treaty country.