Singapore. Country Profile

Transcription

1 Singapore Country Profile

2 Contents Country Overview Clearing Systems Foreign Exchange Controls Taxation Investment Opportunities Trade Regulations Citi Solutions and Services

3 Country Overview Banking Holidays in Singapore New Year's Day January 1 January 1 Chinese Lunar New Year's Day February 3 January 23 Second day of Chinese Lunar New Year February 4 January 24 Good Friday April 22 April 6 Labour Day May 1 May 1 Labour Day (observed) May 2 May 5 Vesak Day May 17 August 9 National Day August 9 August 19 Hari Raya Puasa August 30 November 13 Diwali/Deepavali October 26 October 26 Hari Raya Haji November 6 January 1 Hari Raya Haji (observed) November 7 Christmas Day December 25 December 25 Christmas Day (observed) December 26 Source: Ministry of Manpower. Key Facts Capital City Singapore Population 5,076,700 (2010) Currency Singaporean Dollars Currency SWIFT Code SGD Exchange Rate (1) USD/SGD 1.24 (Jun 2011) GDP USD billion (2010) GDP Growth Rate USD222.7 billion (2010) Exports 8.3% (Mar 2011) Imports USD351.2 billion (2010 est.) Inflation Rate (1) 4.5% (May 2011) Credit Rating (S&P) AAA (Jun 2011) Source: IMF/CIA World Factbooks. Monetary Authority of Singapore as of 31 August (1) Singapore Country Profile 1

4 Country Overview Banking System Singapore has a well-developed financial industry regulated by its central bank, the Monetary Authority of Singapore (MAS). Its mission is to promote sustained non-inflationary economic growth, and a sound and progressive financial center. There is a large and diversified group of approximately 500 local and foreign financial institutions located in Singapore that offers a wide range of financial products and services. The services include trade financing, foreign exchange, derivatives products, capital market activities, loan syndication, underwriting, mergers and acquisitions, asset management, securities trading, financial advisory services, and specialized insurance services. The presence of these leading institutions has contributed to the vibrancy and sophistication of Singapore s financial industry. A comprehensive breakdown on the type of financial institutions in Singapore is provided below: Type of Financial Institution Count Commercial Banks 121 Local Banks 6 Foreign Banks 115 Foreign Full Banks 26 Wholesale Banks 50 Offshore Banks 39 Merchant Banks 48 Representative Offices of Banks 34 Finance Companies 3 Money Brokers 10 Source: Monetary Authority of Singapore, as of 31 August Citi in Singapore Present since 1902, Citi franchise is deeply embedded in the Singapore financial sector and is represented in nearly every asset-class with more than 8200 employees based in Singapore. Citi s Institutional Clients Group, Investment Bank, Consumer Bank, International Personal Banking, Private Bank, Global Markets and Asset Management are all leaders in their respective fields, contributing significantly to Citi s overall performance in Singapore. Singapore is also one of Citi s key centers of excellence in Asia and a strategic hub for regional management, marketing, operations and technology expertise. It is home to state-of-the-art processing and computer centers, which serve the transactional needs of Citi s branches in more than 50 countries Citi operates in Singapore through its three major lines of business, comprising the Institutional Clients Group, Global Consumer Group and Private Bank. Citi is the recipient of numerous awards recognizing its successes in Singapore, including Best Bank in Singapore by Euromoney (2011), Best Foreign Cash Management Bank in Singapore by Asiamoney (2011), Best Trade Finance Provider in Singapore by Euromoney (2011) and Best Foreign Commercial Bank in Singapore by FinanceAsia. 2 Singapore Country Profile

5 Country Overview Citi in Singapore The following branches provide corporate business services: Capital Square Branch, Capital Square Esplanade Branch, Raffles Link Jurong East Branch, CPF Building Orchard Branch, McDonald House Citi also has Consumer Banking branches island-wide. For locations of Citi s Consumer Banking branches, please refer to: Head Office Address 8 Marina View 16/F Asia Square Tower 1 Singapore Singapore Country Profile 3

6 Clearing Systems Citi is a member of the Singapore Clearing House Association (SCHA). SCHA owns and operates the following clearing systems: 1. egiro: Bulk interbank electronic direct debit/credit service 2. Check Truncation System (SGD): Local payment infrastructure to facilitate local clearing of SGD checks drawn on the local participating banks 3. Check Truncation System (USD): Local payment infrastructure to facilitate local clearing of USD checks drawn on the local participating banks Citi is also a direct clearing member of the Monetary Authority of Singapore s Electronic Payments System (MEPS) which is a real-time SGD domestic payments system. In addition, Citi is the settlement bank for the following exchanges in Singapore: 1. Settlement Bank for Singapore Exchange Derivatives Clearing (SGX) 2. Settlement Bank for Central Depository Pte Ltd s (CDP) Enhanced Payment System for Securities Citi is also the sole Settlement Bank for the Check Truncation System (USD) in Singapore Funds Availability Schedule Cut-off times for outgoing funds transfers are as follow: Cut-off Time Funding Date Client DR/CR Date Client Value Date Local Currency Transfers Local Currency Book-to- Book Foreign Currency Bookto-Book 16:00 (Electronic) 15:00 (Manual) 18:00 (Electronic) 16:30 (Manual) 18:00 (Electronic) 16:30 (Manual) Value Day Value Date Same Day Value Day Value Date Same Day Value Day Value Date Same Day Foreign Currency Transfers Currency Dependent Currency Dependent Value Date Same/Next Day, Currency Dependent Check Deposit 15:30 Next Day Value Date Same Day 4 Singapore Country Profile

7 Foreign Exchange Controls Exchange controls are minimal, in line with the government s efforts to make Singapore more competitive as a regional financial center. Corporations Commercial Foreign Exchange Companies may borrow and lend in all currencies and deal freely in foreign exchange. Singaporean companies are not required to convert their foreign currency receipts into local dollars or file forms with the Monetary Authority of Singapore (MAS) regarding their transactions in foreign currencies. There is no limit on the amount of capital investment in foreign currencies that companies may make. Singapore dollars received through local borrowing by foreign firms must be for productive activities, i.e. the Singapore government discourages foreign firms from borrowing SGD for speculative purposes. Incoming Direct Investment A foreign entity may invest in Singapore either through a locally registered branch or a locally-incorporated subsidiary. Subject to the ownership and foreign ownership restrictions of certain specific industries, there is generally no control over the percentage of equity ownership, nor is there any prescribed debt to equity ratio. Prior approval is generally not required for incoming direct investment, except for sectors where certain ownership and foreign ownership restrictions apply, such as banking and insurance. Foreign Exchange Convertibility/Transferability Local currency is freely convertible domestically and offshore. Restrictions on Lending for Non-Resident Financial Institutions There are restrictions on SGD lending to non-resident financial institutions. Banks may lend SGD to nonresident financial institutions in Singapore or elsewhere provided total SGD credit facilities to the institution do not exceed SGD5 million. For SGD proceeds used outside Singapore exceeding this amount, banks are required to swap or convert the proceeds upon drawdown. However, banks may arrange SGD bond issues for non-resident financial institutions. The requirement to swap SGD proceeds from these issues applies if the proceeds are to be used outside Singapore. Restrictions on Lending for Non-Resident Individual/Companies Banks in Singapore may extend any amount of SGD credit facilities to non-resident individuals and nonresident non-financial entities. Banks may lend SGD to non-resident financial institutions for any purpose whether in Singapore or elsewhere as long as the aggregate SGD credit facilities do not exceed SGD5 million per entity. Singapore Country Profile 5

8 Taxation Corporate Income Tax Corporate income tax rate for Singapore corporations and branches of foreign corporations in Singapore is 17%. 75% of the first SGD 10,000 of chargeable income and 50% of the next SGD 290,000 of chargeable income are exempt. New start-up companies and newly incorporated companies may be exempt from tax on the first SGD 100,000 and on 50% of the next SGD 200,000 of chargeable income for its first 3 consecutive Years of Assessment beginning on or after the Year of Assessment Withholding Tax Dividends: Interest: Royalties: No withholding tax is levied on dividends paid by companies resident in Singapore. Interest paid to a non-resident is subject to a 15% or 17% withholding tax unless the tax is reduced under a tax treaty. With effect from 1st April 2011, interest payments liable to be made by specified entities (banks, financial companies and certain approved financial institutions) to non-residents (excluding Permanent Establishments in Singapore) may (subject to conditions) be exempt from Singapore withholding tax where the interest payments are made for the purpose of the trade or business of the specified entities. Royalties paid to a nonresident is subject to a 10% or 17% withholding tax unless the tax is reduced under a tax treaty. Residents may borrow freely from abroad, but Singapore tax may have to be withheld on the interest earned by non-resident lenders from these borrowings. Goods and Services Tax (GST) Goods and services tax is levied on the sale of goods and services at the rate of 7% generally, with a zero rate for international services and exports. Transfer Pricing Arm s-length transfer pricing is recommended for all inter-company arrangement. From 1 January 2011, interest charged on related-party loans must be in accordance with the arm s- length principle. 6 Singapore Country Profile

9 Investment Opportunities Products Money Market Funds Money Market Funds are collective investment schemes that pool highly-rated, liquid instruments to provide counterparty risk diversification, liquidity on demand and investment returns in the form of dividends. Citi provides direct trade booking and same-day settlement with renowned money market fund managers, including JP Morgan Asset Management and Goldman Sachs Asset Management, without additional charge. Clients can start optimizing returns on their cash balances through Money Market Fund Providers by executing one simplified agreement with Citi. Time Depos its Time Deposits offer competitive returns for tenors ranging from overnight to one year, including specific calendar dates that suit your liquidity management needs. They are available in a large range of currencies, and standing instructions for the maturity date can be issued during the booking process for your convenience. Money Market Deposit Accounts Money Market Deposit Accounts are standard USD interest-bearing deposit accounts which offer preferential rates while retaining the flexibility of demand deposits. They are offered to clients with stable deposits above a minimum balance level. Channels Online Investment Portal (OLI) Citi s Online Investment Portal is a global, secure, Web-based platform that offers a variety of short-term yield enhancement options. Accessible through CitiDirect, users can go online to view and compare rates, initiate trades and view a summary of executed transactions. Customers can choose to implement maker/checker trade execution including trigger points and two levels of approvers in order to control the investment process, making OLI a safe and secure platform for clients to streamline their investments. As ia-pacific Investment Desk Citi s Asia-Pacific Liquidity & Investment Desk services the liquidity management needs of clients with a presence within the region. The Desk currently facilitates the execution of domestic time deposits in various countries, and offers a range of yield-enhancement alternatives, market information and other product information. The Desk s capabilities include:. Executing deposit transactions on behalf of client in the country where the investments are based Providing information on market rates on time deposit based on customer s liquidity management needs Providing value-added services, including client account and balance information, executing standing instructions for time deposits and alerting clients of surplus investment balances Servicing clients offshore time deposit needs from accounts in London and New York during Asia operating hours The Desk is located in Singapore, right at the heart of many Asian Regional Treasury Centers. Singapore Country Profile 7

10 Trade Regulations Singapore has traditionally adopted a free trade policy. It has one of the most open trading regimes in the world. The trade regime is kept very liberal, with no tariff or non-tariff barriers imposed to protect domestic industries. Over 99 per cent of all imports enter Singapore duty-free. There are only four categories of products taxable in Singapore: alcoholic beverages, tobacco, motorcars and petroleum and its products. The import duties are levied on alcohol to discourage drinking, on tobacco and cigarettes to discourage smoking and on vehicles and fuel to discourage car ownership and control traffic congestion. This came into effect 1 January Deposit Protection/Insurance Scheme Current account deposits and time deposits denominated in Singapore Dollars are, subject to the provisions of the Deposit Insurance and Policy Owners Protection Schemes Act 2011 of Singapore ( Act ), eligible for deposit insurance coverage under the Deposit Insurance Scheme up to the limits specified in the Act. For more detailed information, please refer to the following websites: Central Bank: Monetary Authority of Singapore ( Tax Authority: Inland Revenue Authority of Singapore ( 8 Singapore Country Profile

11 Citi Solutions and Services Account Services Allowed No Material Restrictions Allowed Subject to a Complex Set of Rules Allowed Straight Forward Regulations, Approval, or License Strictly prohibited Allowed Challenging Regulatory Approval, or License Non-Residents Residents Operating Accounts (1) Onshore Local Currency Onshore Foreign Currency Offshore Local Currency Offshore Foreign Currency Overdrafts Onshore Local Currency Onshore Foreign Currency Interest-Bearing Accounts (2) Onshore Local Currency Operating Accounts Onshore Foreign Currency Operating Accounts Time Deposits Onshore Local Currency: No Minimum Tenor Onshore Foreign Currency: No Minimum Tenor Domestic Notional Pooling (3) Onshore Local Currency Onshore Foreign Currency Inter-Company Lending (4) (5) (6) Non-Resident to Resident Resident to Non-Resident Local Currency Foreign Currency Non-Residents Residents Local Currency Foreign Currency (Onshore) Singapore Country Profile 9

12 Citi Solutions and Services Central Bank and Other Regulatory Requirements Unprompted reporting is not required Other Payment and Clearing Considerations for Treasury No major restrictions on netting No major restrictions on non-residents making pay-on-behalf-of residents Notes: 1. Non-resident financial institutions holding SGD accounts are generally not allowed to be overdrawn. 2. From 1 April 2011, withholding tax (WHT) exemption will be granted on interest and other qualifying payments made to all non-resident persons (excluding Permanent Establishments in Singapore) made by specified entities if the payments are made for the purposes of their trade or business. The WHT exemption covered by the enhancements will be applicable for: (a) payments liable to be made during the period from 1 April 2011 to 31 March 2021 (both dates inclusive) on contracts which take effect before 1 April 2011; and (b) payments liable to be made on contracts which take effect on or after 1 April 2011 to 31 March 2021 (both dates inclusive). Specified entities are licensed banks and finance companies as well as certain approved capital markets license holders. 3. Notional pool strongly rests on the banks ability to enforce its right to set off balances in one account versus overdrafts in another account across legal entities. Such right is sufficiently affirmed for Singapore residents. 4. Withholding tax applies on intercompany interest, subject to tax treaty between the entities. 5 Extensive international double taxation treaties 6. No thin capitalization rules. 10 Singapore Country Profile

13 Notes Singapore Country Profile 11

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