EU directive deadline of July 2005 further advances Singapore into the business spotlight for offshore company incorporation and banking.

July 01, 2005 (PRLEAP.COM) Business News
News that the European Union is going after tax haven countries is good news for Singapore. According to a report in the UK’s Daily Telegraph newspaper on June 22, 2005, new EU tax rules are will come into force on 1 July 2005. Under these rules, financial institutions in all EU member states will be required to either disclose tax and bank information to the relevant tax authority, or charge clients a ‘punitive’ withholding tax.

Singapore has long enjoyed a reputation for having high standards of client confidentiality and bank secrecy as well as being a highly regulated, reputable jurisdiction for international banking and company incorporation. With this latest development from Europe, Singapore company registration and corporate and personal banking options is becoming more popular with international businesses and high net worth individuals.

The new EU directives will specifically affect EU residents, but a number of tax havens have, according to the Daily Telegraph, also agreed to exchange customer information, including Jersey, Guernsey, the Isle of Man, the British Virgin Islands, the Cayman Islands, Switzerland, Liechtenstein, Monaco and San Marino. The reputation of discretion for some of these countries is being eroded.

From 1 July 2005, in order to keep details of their wealth private, bank customers will have the option of paying a withholding tax which will be levied directly in the country in which their savings are held. This will, according to the newspaper, be charged at a rate of 15 per cent for the first three years, 20 per cent for the following three years, and 35 per cent from 2011 onwards.

Singapore, Hong Kong and Dubai are reaping the benefits of these legal and fiscal developments in Europe, as these Asian jurisdictions are not signatories to the EU directive nor are Singapore, Hong Kong and Dubai are agreeing to cooperate with the OECD.

Healy Consultants managing director Aidan Healy said: “We have witnessed a trend of capital flow from Europe and the US to Asia, as a result of the threat to client confidentiality posed by OECD pressures on tax haven countries. “Consequently, we are now seeing a significant upturn in demand for Singapore, Dubai and Hong Kong companies and corporate bank accounts from our clients,” he added.

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