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With the US and UK cracking down on tax evasion and avoidance and the likes of Germany vociferously complaining about various offshore tax havens such as Switzerland which are apparently corrupting their citizens and encouraging them to evade taxation (!), the OECD really has its work cut out at the moment.
The OECD, Organisation for Economic Cooperation and Development, is supporting international efforts to force greater reporting transparency, and along with the likes of the European Union, the organisation is currently forcing through or supporting legislation for enforced disclosure when it comes to taxable actions.
One location has so far managed to benefit and profit from other jurisdictions’ reduction in favourability, and the jurisdiction in question is Singapore which is becoming an increasingly attractive offshore tax haven. However, with a greater in-flow of international money comes greater scrutiny from the OECD…so how will Singapore continue to fare?
Back in 2005 we reported on the fact that Singapore was one of the offshore tax havens benefitting from the introduction of the European Savings Tax Directive across the EU, its dependencies and various other locations dubbed ‘third countries.’ At the time of the directive’s introduction there was a strong outpouring of funds and business from the European Union, and because of Singapore’s superior reputation and respected standing in the field of international business and finance, it enjoyed the direct benefit of receiving a great deal of this wealth relocation.
Since 2005 there have been revisions and proposed revisions to the directive that have led to even more money leaving Europe, and now that the US, UK and the likes of Germany are turning their aggressive and collective attentions on countries such as Switzerland and Lichtenstein, it seems that Singapore is once again one of the main offshore havens to welcome orphaned or homeless funds and companies!
Singapore has legislation in place to protect the privacy of those who save, invest, bank or do business within the jurisdiction. Some say the legislation is superior even to Switzerland’s because a breach of the privacy laws carries very harsh penalties and sentences – and this gives many seeking a safe haven for their assets sufficient confidence to choose Singapore. This increase in international financial traffic and transactions has naturally benefitted Singapore’s economy and standing – but it has also had a negative knock on effect.
Where international interest in the jurisdiction has led, so OECD interest has followed. According to a report on the Sovereign Society website, this increased OECD interest may mean that the Singapore we know and love today, the Singapore that makes for an excellent, legitimate, well regulated and respected safe haven, may well be forced to change to stay off the organisation’s blacklist. So for the time being, feel free to explore how Singapore could be the right offshore haven for you, but do bear in mind that the security and investor protection in place today could be eroded over the coming months and years.