Introduction
The government of Singapore announced changes to its laws of taxation back in 2004. Today, the republic grew to be an offshore centre. Offshore banking is one of the republic’s fastest growing industries and will continue to do so within the next five years.
The Singapore has the lowest taxation rates in Asia. It is also one of the few remaining Grade A offshore centres that has not signed up to European Union’s (EU) Savings Tax Directive. In 2005, the financial assets managed by private banks in Singapore rose by 25% from 40% that of 2004. Major international offshore and key financial players are increasing in staff numbers to manage the influx of private funds (Shelter Offshore Global Living, 2006).
The total banking assets under management in Singapore was about 0 billion in 2004. In 2005, the second largest Swiss bank, Credit Suisse, moved its head of international banking to Singapore.
There are three types of banks in Singapore: full license, restricted and offshore banks. The foreign retail banks provide current and savings accounts, credit and debit cards, mortgages, retirement and investment scheme and accept fixed deposits. The foreign restricted banks or “Full Banks” have restrictions regarding their services and are limited to one location. Wholesale banks offer same banking services as full license banks. Some exceptions are: open fixed deposit accounts of less than S0, 000, operate savings account and have any sub-branches (The AngloINFO Singapore, 2007).
HR Practices in Singapore
The Singapore economy was transitioned from being a low-end, labor intensive to being high-tech service-oriented and knowledge-based.
Singapore’s economic model. The Singapore is an authoritarian capitalism. The combination gives Singapore a degree of economic freedom and private property rights. It has a control over political aspect. Authoritarian capitalism employs extensive economic interventions (Budhwar, 2004, p. 223).
Singapore’s administrative system. The Singapore has one of the most elaborate management control systems. There is a truth behind Singapore’s image of a controlled society. Furthermore, Singapore is one of the most disciplined societies and cleanest cities in the world. The republic results in overemphasis on formalization/bureaucracy with detailed rules and guidelines. The type of management was coined as “micromanagement”. It means managerial emphasis on routine (Badhwar 2004, p. 224).
Singapore is one of the most open and trade-oriented economies. It has a mixture of multinationals from Europe, Japan and North America. This mixture reflects mixed human resource management (HRM) practices. The government acts as an interventionist concerning broad issues on economic policy (Badhwar, 2004).
The role and status of HRM. The HR functions are strengthening as well as HR’s role in most organizations. There is an existing linkage between HR and strategic planning. HR competencies and top management enlightenment affects the status of HR function in Singapore.
There are careers specific to offshore banking. The high-calibre professionals are sought to fill vacant positions in offshore banks. Contracts and permanent roles are available in Singapore. Offshore banking jobs include: wealth management, investment banking, corporate and retail banking, dealing in private equities, investment funds, trusts, client administration and accounts (Jobs, Inc., 1997).
Key Corporate Features Regarding Offshore Banking in Singapore
The type of entity would be resident or non resident following a common type of law. The Singaporean government has set minimum fees excluding taxation at S5, while, corporate taxation varies. Offshore banks have double taxation treaty access. The standard currency was SGD$, though, the government permitted the use of any currencies in transactions. The minimum paid-up was S with usual authorized at S0,000.
The minimum number of directors/managers is one and there must be a local or a Singaporean. The records must be publicly accessible and the location of meetings could be anywhere for both directors/managers and staff. There must be a member either a corporation or an individual. A company secretary is also a requirement, either local or qualified.
The government also mandated the preparations of requirements such as audit, file accounts, publicly accessible accounts and files of annual return. However, the government was not permitting change in domicile.
Company Information
The company may be a foreign branch operation or a representative office. Within 5 days, the company must be already incorporated. The procedures were submission of name approval, Memorandum and articles of Association and details of shareholdings, registered office address and appointments of directors, company secretary and statutory auditors. Generally, there were restrictions on financial services, education, media related or other politically sensitive businesses.
The power of a natural person was also bestowed on the company’s. The language of legislation and corporate documents must be English. The company name must not resemble names of existing companies. Undesirable or politically sensitive company names would be rejected. The language of the company name must be in Latin alphabet. For private-held companies, the name must include Private Limited or Pte Ltd. On the other hand, public companies must include Limited, Ltd, Company Limited or Co Ltd.
Compliance
The company must have standard share capital of S0,000 and a minimum issued share capital of S. The ordinary shares, preference shares and redeemable preference shares were permitted. The minimum annual statutory fee must be paid at approximately .
The financial statements requirements must be filed with the Singapore Registrar annually. The accounts must be audited by a Singaporean auditor. The companies with members of less than 20, individually-membered companies and companies with annual turnover not exceeding top S million are exempted.
The effective tax rate could be reduced from 20% to 15/10 or even o%. However, the business must qualify for tax incentives. Tax exemption is awarded to foreign-sourced dividends, foreign branch profits and foreign-sourced service income. Extensive tax treaties and unilateral tax reliefs concerns foreign dividends received in Singapore. It may be redistributed out of the country tax-free to foreign investors.
The investment protection agreement and double tax treaty network includes most countries in the Asia-Pacific region, Europe, Africa and Middle East.
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