Ahead of the recent report on Sydney Morning Herald, and in a quest to clean its image and attract genuine businesses from the world over, Singapore has initiated stringent efforts to wipe out money laundering and tax evasion activities, says SingaporeCompanyIncorporation.sg.
According to a Sydney Morning Herald report published this week, Australian companies have sent almost $40 billion in 2012 to Singapore, raising questions of which funds are legitimate. Ahead of this report and in a bid to clear any doubt, the Southeast Asian nation has been taking proactive measures since last year to weed out money laundering and wilful tax evading activities. This continued effort will help the country to clean its image and attract genuine businesses from across the globe, says SingaporeCompanyIncorporation.sg, a leading Singapore incorporation portal.
BONA FIDE INVESTMENTS WANT TO COME TO SINGAPORE
Singapore attracts investments from all corners of the world, due to the absence of taxation on dividends, business-friendly regulations, vibrant financial market, free enterprise economy, political stability and state-of-the-art infrastructure. According to Trading Economics, the cost of borrowing is last recorded at 0.21, coupled with a strong and appreciating currency attracts foreign funds in search of higher returns.
In return, the Singapore government welcomes foreign investment that contributes to the economic growth of the country, particularly in value-added, skills and technology-based sectors. To encourage such investments, the government offers a wide range of incentives including accelerated depreciation benefits, favourable loan proposals and high-quality industrial estates.
MEASURES TO PROMOTE CLEAN IMAGE
In a bid to step up efforts on cleaning the image of Singapore as a conduit for money laundering activities, the Monetary Authority of Singapore (MAS), last year, announced a slew of reforms to combat cross-border tax evasion activities. According to MAS, Singapore intends four key measures to strengthen its Exchange of Information (EOI) framework, which include:
- Extending EOI assistance in accordance with the internationally agreed standard (for tax purposes) to all the existing tax agreement partners of Singapore.
- Signing the Convention on Mutual Administrative Assistance in tax matters. There are currently 45 signatories to the Convention that serves as an international agreement for bilateral tax co-operation.
- Allowing the Inland Revenue Authority of Singapore (IRAS) to obtain bank and trust information from financial institutions without having to seek a Court order, which will further streamline the administration of EOI.
- Concluding with US an inter-governmental agreement (IGA) that will facilitate financial institutions in Singapore to comply with the Foreign Account Tax Compliance Act (FATCA).
FATCA is a US law which requires all financial institutions outside of the US to share information about financial accounts held by US persons to the US Inland Revenue Service (US IRS) on a regular basis. The agreement was concluded in July last year with far-reaching implications. Per the FATCA rules, banks in Singapore will have to share the information on financial assets of American citizens in the country, with the U.S. authorities.
ATTRACT MORE BONAFIDE COMPANIES
Singapore’s ambition to promote a clean image across the globe will have a positive impact on its image. It will attract bona fide businesses for carrying out legitimate business activities and put brakes on money laundering intentions.
Commenting further, Ms. Cheryl Lee, Operations Manager at SingaporeCompanyIncorporation.sg said, “The measures will ensure that Singapore’s financial system is not used to harbor ill-gotten funds or as a medium for the flow of undeclared assets. Such regulations will restore the image of the island nation as a nerve center for growth and innovation.”