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.
- a government-friendly business policies;
- a comfortable tax regime;
- an increase in a number of global institutions, operating 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.
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.
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.
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.
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.
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.
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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