Singapore trust law is based substantially upon English trust law principles. Trusts in Singapore are regulated predominantly by the Trustees Act and the Trust Companies Act (TCA) governs trust businesses in Singapore and governed by the Monetary Authority of Singapore (MAS).
With Asia driving the global economy, Singapore’s wealth management industry has been experiencing a financial boom and is consequently gaining prominence as a valuable trust jurisdiction.
Benefits of Singapore Qualifying Foreign Trusts
Tax exemptions are available for income derived from outside Singapore and received in Singapore from Qualifying Foreign Trusts (QFTs) and their holding companies. Singapore QFT income from the following sources is exempt from tax, including:
- Dividends and any interest in respect of any investments.
- Gains or profits derived from sale of any designated investments.
- Distributions from foreign unit trusts.
- Rents, royalties or any other similar profits.
- There is no capital gains tax in Singapore.*
In addition to the tax exemption given to the trust income of the QFT, the approved trust company that administers the QFT is also taxed at a reduced tax rate on the income received from the business of administering the trust at 10%.
Therefore, the distribution of capital from Singapore trusts are exempt from tax, which facilitates effective estate planning in Singapore. Please note that the distribution of income from the estate will be taxable.
How Eltoma Can Help
Eltoma Corporate Services have specialists in Singapore who can provide advise regarding the establishment of trusts as per Singapore Legislation, including proposing ideas for structuring, creating, managing and dissolving Singapore trusts and draft all required legal documents, including:
- Supporting and assisting clients with the logistics regarding creating a valid trust under Singapore Law.
- Creation of declaration of a Singapore trust deed.
- Advising clients and trustees about issues arising in relation to trusts under Singapore trustee law, powers, beneficiary rights, interpretation of trust deeds and other trust related documentation.