By Wendy Sim
Living and working in Singapore
Singapore is regularly ranked as one of the safest cities in the world. Residents enjoy excellent healthcare, education, housing, recreation and transport facilities in a politically stable and low crime environment.
Many businesses and family offices have capitalised on Singapore; in 2020 the Accounting and Corporate Regulatory Authority (ACRA) revealed more than 63,000 business entities were incorporated, bringing the total number of Singapore-based businesses to just over 537,000.
The Monetary Authority of Singapore’s recent parliamentary reply estimated there were as many as 400 single family offices operating in Singapore at the end of 2020.
Why Singapore is business friendly
Businesses and institutions in Singapore benefit from Free Trade Agreements (FTAs), which ease trade in goods, services and investment, and Double Tax Agreements (DTAs), – which set out tax liabilities on income rising from cross-border economic activities between two jurisdictions.
In September 2021, Singapore had in place as many as 26 implemented agreements; 15 bilateral Free Trade Agreements and 11 regional Free Trade Agreements, and close to 100 Double Tax Agreements, all of which ease trade with economies worldwide.
Attracting entrepreneurs to Singapore
Singapore has various programmes to assist entrepreneurs and family businesses who are interested in investing in and relocating to Singapore. Its Global Investor Program (GIP) grants Singapore Permanent Resident status to individuals who meet specific criteria.
To qualify for Permanent Resident status an individual must work in an industry classified by Singapore’s Economic Development Board and have an active role in the company, such as a position on the board or in the senior management team.
There are also stipulations that they must be a member of the family that runs the business, and the family must be the largest shareholder of the firm or own at least 30% of the company’s shares. The company’s annual turnover must be at least SGD 500 million per annum on average in the three previous years before the year the application is submitted.
The Singaporean government administers other programmes aimed at attracting and retaining the talents of individuals and families from around the world. We take a look at three of the main ones below.
The EntrePass is intended to attract serial entrepreneurs, high-calibre innovators or experienced investors wanting to operate a business in Singapore. The business needs to be venture-backed or own innovative technologies.
There are three main types of EntrePass:
- the company is receiving at least S$100,000 in funding or investment from a third-party accredited venture capitalist or angel investor; and/or
- is incubated by an incubator or accelerator recognised by the Singapore government; and/or
- has an established business network and entrepreneurial track record.
- someone who possesses intellectual property; and/or
- has research collaborations with a Singapore-based institute of higher learning or credible research institute; and
- has a record of extraordinary achievements in key areas of expertise.
- someone with a track record of solid investments.
Unlike a traditional Employment Pass, the EntrePass has no stipulated minimum salary and is not required to meet foreign worker levy or quota requirements.
Singapore’s Foreign Artistic Talent Scheme (ForArts)
The Foreign-Artistic-Talent-Scheme (ForArts) scheme was introduced in 1991 and allows international arts professionals to become permanent residents in Singapore. The scheme’s aim is to recognise the cultural significance and contribution an artist can play in helping Singapore’s art and culture landscape.
ForArts considers the applicant’s professional experience, achievements, ability and commitment to contribute to the advancement of the local arts scene. Applicants must also demonstrate a track record of engagement with the local public and arts community.
To be considered for the ForArts scheme, applicants must:
- Possess relevant training/education in their field of practice.
- Possess relevant professional experience, with outstanding achievements, in the field of performing, visual or literary arts, design or media.
- Have made significant contributions to Singapore’s arts and cultural scene, including a strong track record of local engagements at leadership level.
- Have concrete future plans to be involved in Singapore’s arts and cultural sector.
Single Family Office
The Monetary Authority of Singapore provides tax exemption for specified income derived from designated investments for funds and family offices.
The exemptions, which are subject to approval on a case-by-case basis, means that, family wealth managed by a single family office in Singapore can enjoy tax exemptions from schemes granted under 13R & 13X of the Income Tax Act.
These are known as Enhanced Tiered Fund exemptions.
Alongside the approval granted by Monetary Authority of Singapore, a single family office may apply (subjected to approval) to the Ministry of Manpower for an employment pass, allowing one family member to work for the single family office in Singapore under the 13R exemption or three family members under the 13X exemption.
While establishing their single family office, many of our clients also consider how they can transfer family wealth to the next generation in an organised and structured manner. We work closely with clients and their advisers to address their succession planning needs.
According to the Monetary Authority of Singapore, ‘single family office’ typically refers to an entity which manages assets for or on behalf of only one family and is wholly owned or controlled by members of the same family. The term ‘family’ in this context may refer to individuals who are lineal descendants from a single ancestor, as well as the spouses, ex-spouses, adopted children and step children of these individuals.
How ZEDRA can help
If you are incorporating a new entity or transferring foreign operations to Singapore, we can assist to set up and administer your business. Many families also consider the establishment of their family trust to house these corporate entities in alignment with their legacy and succession planning needs.
ZEDRA can provide trusteeship services to the overlying family trust, and administration services to the underlying companies holding these corporate entities as part of the trust assets.
Many clients worry about how the next generation will manage the family business in the future. We are able to guide the family through formalising governance in their family business succession planning. This includes establishing suitable family charter and governance rules into their structures.
Additionally, ZEDRA’s Private Office team supports our clients with lifestyle management, family governance advice and other bespoke services such as immigration, security and asset cataloguing.