Peter Macfarlane, offshore asset protection consultant and joint editor of The Q Wealth Report, has recently been visiting bankers in Singapore. Want to know how to open an offshore private bank account in Singapore? Or how to set up a brokerage account in Singapore with online trading, even if you are a US citizen? Here is a brief trip report. More information will be available in forthcoming issues of The Q Wealth Report, and at our Q Wealth Symposium in Hong Kong this October.
Singapore’s investor-friendly climate has consistently earned high scores in global and regional rankings. And it’s getting better.
I was not disappointed on my latest trip this April, as our local partner gave me a detailed explanation of the latest tax incentives over a cup of Chai tea, from his home office with a fantastic panorama of the city. The tax system in Singapore has been designed not so much to collect revenue as to encourage responsible investment. Investment in things like training and IT. Tax deductions of up to 400% are possible on such expenditures, meaning that a company can easily earn millions and legally pay no tax… but it equally means that a company that’s incapable of earning profits doesn’t get any handouts. Our local partner, for example, is just buying iPads for all his staff to claim the deductions.
After a successful trip, including a visit to the Shorex conference at which I had the chance to meet and network with a number of offshore professionals from around the world, I boarded my flight to Frankfurt. On boarding, I was handed a copy of that day’s FT Asia, with the headline: “America Lacks Credibility on Debt, Says IMF.”
We see news like this every day now. And that’s even somebody like me, who doesn’t watch much TV. Another example: US Treasury Secretary Timothy Geithner says borrowing more from China to finance tax cuts for the most affluent Americans would be irresponsible. But even mainstream Bloomberg says Geithner has got it the wrong way around: “The real question is whether Beijing is willing to double down on a nation whose balance sheet makes Italy look good. Holding $1.2 trillion of U.S. debt is a fast-growing risk to China.” This Bloomberg article was widely reported in media across Asia, though it seems less so in the US!
Richard and I have been writing for years about the rise of the east, but now the east truly has risen. Singapore is the financial hub at the heart of this. It’s a well managed place where people are happy and business can flourish. Of course, you need to be a certain type of person to live in a place, and Singapore would probably not be my first choice for a residence flag… but as a business base it’s just great and getting better!
I guess most people reading this blog already know why they want to get their money out of places like the USA and the west, and they are looking for practical information on how to achieve this. In other words, how to go about opening a foreign bank account, or a bank account in non-US currency… Here at Q Wealth we specialize in practical ‘how-to’ information, of the kind you can only obtain through on-the-ground reporting of this type.If this is your first visit here, feel free to browse our site for information on lots of different jurisdictions.
The good news is that if you just want to get part of your assets into Singapore and Asia, you don’t have to understand the complexities of the Singapore tax system, or worry about making deductions or the annual filing requirements. Here’s a hot tip: The easiest thing to do is just take a pure tax-free offshore company and open a bank account with it in Singapore. This is very easy to do. Singapore does not tax non-residents bank accounts. As long as you have no local Singapore income, you are tax free and can gain the full benefits of participation in the Singapore banking system, including excellent multi-currency banking facilities and access to precious metals like gold and silver.
A Nevis LLC, for example, is ideal for this purpose. I talked to banks in Singapore about this structure and the answer was universally “no problem, sir!” You might say as a company formation agent I am biased, but I personally do all my business and banking through corporations. I never hold any serious assets in my personal name. Some people have particular reasons for opening a personal offshore bank account, but I just wouldn’t feel comfortable thinking of my name being passed from bank to bank around the world every time I send or receive money. Much better to do it in a corporate name.
The great thing about LLCs is that they keep things simple – tax transparency* means that an LLC need not have any impact on your tax situation. By using an LLC you won’t be paying more or less tax, but for the few thousand dollars it will cost you, you will receive a substantial degree of privacy and asset protection. (Of course I am only talking generally here… different countries have different tax systems, so check with your advisors) If you are interested in learning more about Nevis LLCs, check out my free report Untouchable Wealth that covers them in detail.
For Americans, there is a special additional benefit to using an offshore LLC for banking in Singapore: and that is access to ‘forbidden’ investment markets. Very few international brokerages these days will accept US clients. The ones we work with in Switzerland, for example, won’t accept US citizens or residents, even if they are operating through offshore companies. We have one brokerage in Panama that accepts American beneficial owners, but they are – frankly – expensive, and they can no longer guarantee client confidentiality since Panama signed its tax information exchange agreement with the USA. Good news: in Singapore, it is possible for US citizens to control brokerage accounts. You cannot open a brokerage account in Singapore directly in your name as a US citizen, but an offshore LLC solves this problem rapidly and simply. We won’t name specific banks here because we don’t want to draw undue attention to the banks and brokerages that offer this, but if you are a Q Wealth member please feel free to contact the office for referrals to our recommended service providers who can help you out, or contact the office of Peter Macfarlane and Associates. Remember, provided you are a Q Wealth member we do not charge a penny for referrals.
So what about the practicalities of opening a bank or online brokerage account in Singapore? I wrote more than a year ago an article on How to Open an Offshore Bank Account in Singapore. Since then, things have moved on a bit, but read it for background info if you haven’t already. The constant is that you do still have to visit Singapore to get your account set up. Thereafter, of course, you can control it via highly sophisticated internet banking. I did hear that some banks are making moves towards opening accounts via video-conferencing, as the small Swiss private bank we work with now does, but this has not been fully implemented yet. HSBC seem the most advanced on this, perhaps unsurprisingly: they already have plenty of branches around the world equipped with video-confercing facilities.
The best offshore banks in Singapore for westerners are probably the ones with more of an Asian focus. In particular we like DBS Bank, formerly the development Bank of Singapore, set up in 1968 by the Singapore government but now present all over Asia. There are Chinese banks like OCBC if you are bullish on China. If you are more European in your investment outlook, you could choose the Singapore office of one of the Swiss banks. And then there are always the global banks with an international outlook such as HSBC and Standard Chartered. South Africa’s Standard Bank would also fit into this category.
I’ll be publishing more information on Singapore banking, including direct contacts, in the newsletter over the next few months. Remember you can either sign up for our free weekly Q Bytes newsletter, or go straight for the premium paid subscription that costs only $87: check out the list of benefits and order form here.
* What is a tax transparent entity? It’s an entity which is not taxed either in representative capacity or in its own capacity as a tax paying entity, but the tax is levied on the participants in the entity based on their share of income in the entity.