Establishment of a trust in Singapore

Establishment of a trust in Singapore

Today, Singapore is a promising jurisdiction for the establishment of a trust fund. A status of Singapore as one of the leading financial centers in the world and a wide business environment provide a rapid development in the field of asset management in a future.

Among the factors, determining a development of this trend, the following can be distinguished:
  • a government-friendly business policies;
  • a comfortable tax regime;
  • an increase in a number of global institutions, operating in Singapore.
The establishment of a trust fund in Singapore

A trust is a legal contract, according to which a right to property is transferred from one side in favor of the other. Beneficiaries benefit from the assets.

Features of Singapore trust law

A basis of trust law implies such important features:

  • a founder may reserve an authority to preserve a right to make investment decisions;
  • foreign laws are not enforceable against established trusts in Singapore;
  • proxies must be extremely careful in their duties.

Advantages of registering trusts in Singapore:

  • No requirements for registering a trust in Singapore;
  • Strong privacy laws;
  • A founder reserves a right to reserve certain powers;
  • A founder also has a right to determine people, who will control the actions of proxies;
  • No capital gains, inheritance, gift taxes;
  • International trusts may qualify for some tax credit.
The establishment of a trust in Singapore

Typically, a most popular type is a family trust. Such trusts are created by people, who want to keep assets in the family. A well-built trust provides a reliable asset protection.

Read also:
Opening of a family trust in Singapore

A trust is established on the basis of an agreement containing:

  • a description of the founder’s intentions to establish a trust fund in Singapore;
  • a description of the assets, that comprise a trust;
  • a description of the intentions of a founder to transfer authority to manage property in favor of the managers
  • the indication of beneficiaries.

When establishing a Singapore trust, a founder can transfer many types of property under management: stocks, land, real estate and other property, money, family wealth, business, etc.

A duration of a trust

Trusts, that were established in Singapore after 12/15/04, exist for up to 100 years. A duration of such a trust is determined by:

  • according to the provisions in a contract;
  • a distribution of assets between beneficiaries, when the funds are distributed, the trust ceases to exist;
  • a beneficiary agreement on liquidation of a trust.
A taxation of international trusts in Singapore

An international trust is a trust, whose founder and beneficiaries are foreigners. The following may be exempted from a taxation:

  • Dividends and interest, earned outside of Singapore;
  • Royalty, similar profits, arising from property, located outside of Singapore;
  • The investment profit;
  • Distributions from foreign funds.

It is also worth noting, that in Singapore there is no currency control.

Professional aid

The legislative environment of Singapore is actively developing. Anyone, who wishes to establish a trust fund in Singapore, can be calm, that their assets and property are well protected, and successors will enjoy increased investment and tax savings.

If you still have questions, regarding a subject of the article, YB Case experts are ready to answer them during personal advice on establishing a trust in Singapore.

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