Country code – SG
Legal basis – Common law
Legal framework – Trustee Act
Formal name – Trust
Settlor – The settlor is the person who establishes and whose assets are put into the trust. It may be either an individual or a legal entity.
The settlor may also be the beneficiary of the assets and may, subject to certain provisions, retain control of the trust. There may not be protection from a subsequent bankruptcy after assets are gifted to the trust.
Trustee – Trustees are the legal owner of the assets who have a fiduciary and statutory obligation to act in the best interest of the beneficiaries.
Singaporean Qualifying foreign trusts shall be administered by a licensed Singapore trust company.
Custodian trustees are not permitted.
Beneficiaries – Beneficiaries are those who get benefit from the trust. Beneficiaries may be natural persons or body corporates.
There are no specific provisions to prevent beneficiaries from draining the trust of its assets and spending in a thrifty way. Trusts in Singapore may avoid both probates and forced heirship rules.
Protector – A protector is not mandatory, but may be appointed by the settlor.
Disclosure - A trust does not need to be registered with any statutory bodies. The trust deed is a strictly private arrangement between the settlor and the trustee.
Protection from foreign judgments – The Trustee act does not include provisions to ignore and not enforce foreign judgments. The Hague Convention on Trusts does not apply in Singapore.
Protection from creditors – The Trustee act does not repeal the Statute of Elizabeth, so transfers by the settlor to the trust may be set aside if the settlor transferred the property before the debt arose. The creditor must prove the fraudulent transfer of assets to the trust, which is not clearly defined by the law. Creditors’ claims may be brought jointly. If a fraudulent transfer is proven, the trust may be declared invalid.
Protection for immigrant trusts – Trusts that migrate from other jurisdictions do not benefit from retroactive protection.
Community property – Community properties transferred to a Singapore trust may not retain its community property character.
Exclusion of foreign law - There are no provisions in the legislation to be able to exclude foreign law.
Choice of law – The choice of law of Singapore to govern the trust or a particular aspect of that trust, is not binding.
Duration - The maximum duration of a Singaporean trust is 100 years.
Compliance – There are no reporting requirements for a Singaporean Qualifying Foreign Trusts other than an annual declaration certifying that the foreign trust has met the conditions for tax exemption. This declaration must be submitted by the trustee.
- Settlor as a beneficiary
- Bankruptcy protection
- Ignore foreign judgements
- Hague convention on trusts
- Choice of law is binding
- Protection from immigrant trusts
- Community property provisions
- Custodian trustee permitted
- Rule against perpetuities (years)
- No Specific exclusion of foreign law
- Subject to CL rules Settlor can retain control
Protection of Settlor
Protection from foreign judgements
- Avoidance of forced heirship
- Spendthrift provisions
- Exclusion of Statute of Elizabeth laws
- Trust invalid if transfer fraudulent
- Creditor must prove fraudulent transfer
- Clear definition of fraudulent transfers
- Separation of creditor claims
- Statutory limitation on fraudulent transfer
Protection of Beneficiary
A trust established in Singapore may not be subject to local taxes applicable to the assets and income of the trust, provided that no residents of Singapore benefit from the trust and no physical assets are located there.
It must be noted that the choice of law of the trust would not be applicable to tax matters, which would be governed by the respective jurisdiction where the settlor, beneficiaries, assets or trustee are located, as applicable.
You should consult with your tax advisor or accountant to know the tax implications in your jurisdiction of residence when establishing a trust in Singapore, transfer assets to it and receive profits from said assets.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 17% Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 15% Interests Withholding Tax Rate
- 10% Royalties Withholding Tax Rate
- 1 Losses carryback (years)
- Indefinitely Losses carryforward (years)
- FIFO Inventory methods permitted
- 64 Tax time (hours)
- 5 Tax payments per year
- 20% Social Security Employee
- 17% Social Security Employer
- 22% Personal Income Tax Rate
- 7% VAT Rate
- 81 Tax Treaties
The Republic of Singapore, also known as Lion City or the Little Red Dot, is an island city-state of Asia, made up of the main island and other sixty-two islets, and founding member of the ASEAN.
It is located to the south of the State of Johor in the peninsula of Malaysia and to the north of the islands Riau of Indonesia, separated of these by Strait of Singapore. Its population is about 5.5 million, of which about 75 percent are Chinese, and the rest are Malay, Indian or Eurasian minorities. This multiculturalism diversity is reflected in the four official languages of the country, English, Chinese, Malay, and Tamil. Its official currency is the Singapore Dollar (SGD), which is also accepted as customary tender in Brunei. Alike, the Brunei Dollar (BND) is customarily accepted in Singapore.
Singapore is a unitary multiparty parliamentary republic, with a Westminster system of unicameral parliamentary government.
Singapore is one of the main global cities and one of the hubs of world trade, third-largest oil refining and trading center, third largest financial center and one of the largest freight port worldwide. Singapore is the third country with the highest per capita income worldwide, in terms of purchasing power parity, as well as being among the first countries on the international lists of education, with one of the highest skilled workforce worldwide, health, political transparency, and economic competitiveness.
Its globalized and diversified economy depends especially on international trade, refining imported raw goods to reexport, and an export-oriented manufacturing sector, mainly chemistry, oil refining, being one of the top three export refining centers in the world, mechanical engineering, biotechnology, and biomedical sciences. Singapore has one of the seaports that handles the largest annual cargo volume worldwide, both in tonnage and in the number of containers.
The country is also an important international financial hub, leading world’s private banking sector, offering top-notch corporate banking facilities and a broad range of banking services, investment funds, and insurance services, among others. It also has the fourth largest currency exchange and capital market worldwide, behind New York, London, and Tokyo.
All supported by an investor and entrepreneurship-friendly tax policy. With a territorial tax system, a low tax burden and the availability of several tax breaks and incentives for startups and technological innovation.
Singapore welcomes thousands of foreign investors, expats entrepreneurs and multinational companies’ employees. Singapore’s immigration policy is geared towards attracting foreign talent, with several visa schemes to attract high-skilled foreign employees, entrepreneurs and investors.
Tax treaties Map
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