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Andrew Henderson

Founder of Nomad Capitalist and the world’s most sought-after expert on global citizenship.

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Finance • Legal Tax Reduction

How to Pay Zero or Low Taxes in Singapore (Territorial Tax)

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There’s a reason Singapore regularly tops the survey charts when it comes to quality of life. 

A city–state with five million inhabitants packed into an area of 275 square miles – about the size of the Isle of Man or The State of Rhode Island – is a unique location. 

So unique, in fact, that when Ridley Scott made the classic movie, Blade Runner, Singapore was his first choice of filming location. In the end, Scott couldn’t afford to shoot his movie here; it was just too expensive.

Fortunately, Nomad Capitalist has a team on the ground, meaning we can make Singapore work to our clients’ financial benefit.

Wander the streets of Singapore, and you’ll find churches, mosques and temples jostling for space alongside futuristic skyscrapers, all of them outnumbered by an amazing array of markets and lively noodle bars. Its sheer density, mix of cultures and blend of the traditional and ultra-modern give it its singular charm.

Singapore has transformed from a developing country to a first-world nation in under 50 years. It’s the smallest country in Southeast Asia, but it packs a punch in terms of its world-class infrastructure, safe streets and international financial possibilities.

Home to many cultures, ethnicities and religions, Singapore has three predominant ethnic groups: Chinese, Malay and Indian. There is a growing population of other races, including Eurasian and non-Asian groups and while the national language of Singapore is Malay, English is spoken everywhere. 

In Singapore, every step through the city is a journey across different cultures. You can sip traditional kopi in a quaint café in Chinatown and then find yourself marvelling at futuristic art installations just a block away. The streets of Little India burst with the colours and scents of spices and flower garlands, while in Kampong Glam the chatter of local cafes creates a melody that belongs to centuries-old Malay traditions.

The food here is not just diverse; it’s a story on every plate – and palate. Whether it’s a high-end restaurant where chefs push the boundaries of culinary art or a lively hawker centre where each stall is a legacy of family recipes, Singapore’s food scene is legendary.

Living in Singapore is like holding a kaleidoscope to the world – every turn, every corner unfolds a new vignette of this rich cultural mosaic, making everyday life here anything but ordinary.

Alongside being known for its multi-racial population, warm weather, efficiency and good universities, Singapore has a shining reputation for its global investor program. Let’s set the scene before we get into that program’s details because its residence-by-investment scheme has changed over the years. 

Becoming a Singapore Resident 

Establishing a Singapore Tax Residence

In the past, it was relatively easy to obtain permanent residence in Singapore and, as an open country, many English-speaking migrants moved there. Eventually, though, native Singaporeans started to take issue with the sheer volume of foreigners arriving, resulting in the government making the residence process more difficult and expensive. 

But that’s why Nomad Capitalist is here – to help you overcome the challenges of moving to Singapore as a legal resident. Getting into the country is possible if you have a good business idea or millions of dollars to invest. 

If your company deploys you to Singapore for work and you have a salary of S$4,500 monthly, you can claim an Employment Pass valid for up to two years.  

Singapore also has a Global Investor Program, which gives applicants three options to secure residency:

  • Invest at least S$10 million (US$7.4 million) in a new or expanding business entity in Singapore
  • S$25 million (USD$18.5 million) in a fund that invests in Singaporean businesses
  • Establish a Singapore-based family office with assets under management of at least S$200 million (US$148 million).

The first option, investing in a business, requires the applicant being able to demonstrate three years of entrepreneurial experience and a track record in business. You must then submit audited financial statements for your existing company for the past three years. 

You’ll need to show the authorities you have the acumen to succeed in the business you’re investing in, but the government often acts as a link in finding suitable partnerships between investors and local business networks.

If you own more than one business, you must submit the financial statements of the one with the highest turnover. However, you’re generally free to consolidate your businesses to meet the annual minimum turnover criteria. The authorities will also consider your role and how it impacts the company’s profitability. 

The second and potentially easier option is to invest S$25 million in a Singaporean fund that invests in companies based there. 

The last option is investing in new or existing Singapore-based family offices. A family office is generally a physical office in Singapore, whereby a company invests funds on another entity’s behalf.

The company must have assets under management of S$200 million, with a quarter of that held in Singapore assets and the remainder permitted to be in overseas assets. 

This includes all financial assets, such as bank deposits, capital market products, collective investment schemes, life insurance premiums or any other investment products. But, it excludes real estate. You’ll also need five years of entrepreneurial or managerial experience.

Whichever investment route you choose, note that the money must be transferred from your personal bank account, in your personal name, from a Singapore-registered bank. After you submit hard-copy evidence, your application will take around eight months to be processed. 

In addition to the permanent residence status you get by investing in Singapore, you can also decide to pursue full citizenship. For some, this option could be well worth taking because Singapore has one of the best passports in the world. It’s one of the few non-European passports that allows visa-free access to the EU and the United States – a significant perk in anyone’s language!

According to the Nomad Capitalist Passport Index, Singapore passport holders can enter 171 destinations without a visa, through a visa on arrival or via electronic travel authorisation. 

There are a couple of downsides to Singapore though. First of all, Singapore doesn’t allow dual citizenship. If you want to get a Singapore passport through its citizenship-by-investment (CBI) scheme, it can take up to two years, is not guaranteed, you’ll have to renounce your existing passport and you cannot obtain others.

The second downside is the military service all Singaporean citizens are expected to complete. It applies to new citizens – both genders – and carries an upper age limit of 40. Still, if you’re comfortable with these conditions, it can be one of the most powerful passports to hold. 

Of course, you may simply want to live in Singapore and not necessarily obtain a passport. The Global Investor Program allows you to do that, but it can also put you on the path to citizenship if you desire. 

If you decide that Singapore is the place for you, you’ll find it’s an English-speaking country that offers a fantastic lifestyle and high-quality medical benefits. Alongside Japan and South Korea, it’s one of the more expensive places to live in Asia. It’s far pricier than its neighbours, Malaysia and Thailand, but less expensive than, say, New York, London or Paris.  

Taxes in Singapore 

Singapore Tax Free Countries

Understanding Singapore’s tax system is key to maximising its benefits. The territorial tax system means that only income earned within Singapore is taxed, while foreign-sourced income remains untaxed.

This structure is particularly advantageous for international business owners and investors. It’s important to familiarise yourself with the specifics, such as tax residency criteria and applicable rates for different income types.

At Nomad Capitalist, we offer a practical overview, providing clarity and guidance to navigate the tax landscape effectively, ensuring you make the most of Singapore’s tax-efficient environment.

If you want to live in Singapore without becoming a citizen, the country has a territorial tax system, which means they don’t tax your worldwide income. They will only tax Singapore-sourced income. 

But be prepared to invest a large amount of money and undergo strict due diligence in order to get past the front door. 

As a tax resident living there for at least 183 days in the calendar year, you’ll be taxed on all income earned in Singapore. Foreigners issued with a one-year work pass are also treated as tax residents until they cease employment.

Your foreign-sourced income is tax-exempt, but you’ll be taxed on all income earned in Singapore at progressive rates ranging from 0% to 22%. Once again, Nomad Capitalist is here to help with our Ultimate Guide to Establishing a Singapore Tax Residence

As a tax non-resident, your employment income is taxed at the higher flat rate of 15% or the progressive resident tax rate. Director’s fees, consultant’s fees and all other income are generally taxed at 22%. Singapore’s corporate income tax rate is 17%, but it can be exempted if your company doesn’t have a foothold in Singapore.

Singapore has no capital gains tax; therefore, no exit tax is applicable when you leave the country, provided you’ve filed your tax return. 

Recent Changes to Singapore’s Tax Laws

From January 1, 2024, Singapore has introduced taxes on some foreign-sourced disposable gains. Before the change, foreign-sourced income was only taxed if received in Singapore, with taxes only applied to dividends, royalties, and interest, not capital gains.

Under the move, foreign-sourced disposable gains are now taxed if received in Singapore, and the relevant entity does not have ‘economic substance’ in Singapore. 

The change has effectively introduced capital gains tax for specific types of entities, applying to multinational companies where at least one member has a place of business outside Singapore.

In keeping with the global drive to stop companies from shifting profits to artificial locations, a minimum effective tax rate of 15% for multinationals will come into force in 2025. 

As such, domestic companies, financial institutions, and equity-holding entities that have physical and economic substance in Singapore are excluded. Assets outside Singapore can still be ‘foreign’ if they’re situated where the company is incorporated, physically located, or, in the case of debt, where the creditor is resident. 

Banking in Singapore

DBS Bank Singapore

Singapore is one of the most popular asset havens for people who want to bank overseas. A quality private bank isn’t just about parking your money – it’s going to give you access to investments. The kind of private bank synonymous with the likes of Switzerland will try to sell you financial products but, while these legacy brand banks may give you high-quality service, they will slow you down.  

In the view of Nomad Capitalist founder, Andrew Henderson, Singapore offers priority banking for entrepreneurs that’s more transnational. As a modern, safe, successful and wealthy country, Singapore still has some understanding of how it got there and is more agile and less traditional than other notable financial centres. 

If you’re looking to invest in Singapore, it offers stable banking with multi-currency accounts, with the opportunity to access competitive interest rates. The banking culture there tends to be more open, transparent and direct. There are no hidden costs – they will accept you if you meet the minimum deposit requirements. There are also reputational benefits. 

If you want to manage your own money, make and receive payments or convert currencies, it’s a great option – and fees are low. ‘I have a couple of accounts in Singapore,’ Andrew explains, ‘I recently sent a few hundred thousand dollars to Europe, which cost around US$100.’

Potential for Growth and Prosperity

Singapore has plenty to offer foreign investors. It’s not just a city-state; it’s a gateway to the vast and diverse Asian continent and beyond. Its strategic geographical location makes it an ideal hub for exploring and tapping into the emerging markets of the region.

For entrepreneurs and global citizens, Singapore offers unparalleled connectivity to key Asian economies and a base for international expansion. The city-state’s blend of cultural richness, economic vitality and global connectivity makes it an attractive destination for those seeking to explore new horizons in one of the most dynamic regions.

With low corporate taxes and benefits for entrepreneurs and business owners, there’s a lot of potential for growth and prosperity there. It’s not a tax haven or zero-tax country, so you will pay tax there, but it can be minimal if structured properly. 

As part of our Nomad Capitalist philosophy of ‘going where you’re treated best,’ we often say that tax, asset protection and lifestyle matters can rarely be separated.

Singapore is a costly option, and its global investor program is relatively expensive, but what you get in return can more than repay your initial outlay. Singapore offers the potential to pay lower taxes, make profitable investments and leverage a top-ranked banking and finance system – all in a developed, secure place that’s great to live in.

So, if you’re a high-net-worth entrepreneur or investor, tax residence in Singapore has clear advantages. With a base there, you can grow your businesses, enjoy a wonderful lifestyle and access excellent travel opportunities. 

As ever, it requires proper planning. Which is where we come in. Nomad Capitalist is a turnkey solution for offshore tax planning, dual citizenship, asset protection and global diversification. We’ve helped 1,500+ high-net-worth individuals, and we can help you, too. Find out how here

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