Being one of the leading financial centers in the world, Singapore is an excellent jurisdiction for the establishment of a trust fund. The main advantages of setting up a trust fund in Singapore include:
- investor-friendly business policies;
- business-friendly tax regime;
- presence of global financial institutions.
Establishment of a Trust Fund in SingaporeA trust is a legal contract, according to which a right to property is transferred from one party to the other. Beneficiaries, in their turn, benefit from assets managed by a trust fund.
Singapore Trust LawAccording to Singapore trust law:
- a trust founder has a right to make investment decisions;
- foreign laws are not enforceable against trusts in Singapore;
- proxies must be extremely cautious while executing their duties.
Advantages of registering trusts in Singapore include:
- no requirements for registering a trust in Singapore;
- privacy laws;
- a founder has a right to reserve certain powers;
- a founder also has a right to determine people who will control proxies’ actions;
- no tax on capital gains, inheritance or gifts;
- international trusts may qualify for tax cuts.
Establishment of a Trust in SingaporeThe most popular trust type in Singapore is a family trust. By establishing a trust, its founder(s) achieve reliable asset protection and get to keep their assets in their families.
Opening of a Family Trust in SingaporeA trust is established on the basis of an agreement containing:
- description of a founder’s intention to establish a trust fund in Singapore;
- description of assets managed by a trust;
- description of a founder’s intentions with regard to transferring authority to manage a trust’s property to managers
- description of beneficiaries.
When establishing a Singapore trust, a founder can transfer management of the following types of property: stocks, land, real estate and other property, money, family wealth, business, etc.
Duration of a TrustTrusts established in Singapore after 12/15/04 can exist for up to 100 years. Their duration is determined by:
- contractual provisions;
- distribution of assets between beneficiaries (when funds are distributed, a trust ceases to exist);
- a beneficiary agreement on liquidation of a trust.
Taxation of International Trusts in SingaporeAn international trust is an entity whose founder and beneficiaries are foreigners. International trusts may be exempt from taxes on:
- dividends and interest earned outside of Singapore;
- royalty and similar profits arising from property located outside of Singapore;
- investment profit;
- distributions from foreign funds.
Please keep in mind that Singapore has no currency controls.
Looking to set up a trust in Singapore? Need advice on establishing a trust in Singapore? Why not contact YB Case?