Why Expats Should Invest Their Money in Singapore
Credits: Guo Xin Goh
Are you an expatriate who has been living in Singapore for a while? Here’s hoping you’ve taken advantage of the opportunities to grow your wealth during your stay in Singapore.
Have you been living in Singapore for a long time? If yes, then I’m sure you’ve heard of the attractive benefits that the country’s financial ecosystem has to offer.
But have you taken advantage of them to grow your money?
Here are some reasons why, as an expat, you should use your stay in Singapore to invest and grow your money.
1. Strong Governance & Bilateral Ties
Singapore has a world-class financial system and is a hotbed for several types of investments. It also attracts investors thanks to its strong governance. The socio-political system here is established, therefore making investment stable, albeit not safe from inflation and rising costs.
The government in Singapore has identified the financial sector as an area of growth, and has put the money down to show its serious intention to support and grow this sector. One example is the Financial Sector Development Fund, which aims to promote Singapore as a financial hub, amongst other things.
Singapore also has healthy international ties, with double taxation agreements with many countries. This means what you earn in Singapore will not be taxed in your country of origin. To top it off, if you ever decide to leave Singapore, there is no capital control to limit the transfer of your money back to your country of origin, or to your new country of employment or residence.
2. Low-To-No Taxes on Returns
If you do earn in Singapore and have to pay taxes here, you should know that the country has one of the most competitive tax rates compared to other countries. This puts you in a position of being able to pay your dues and pocket your profits comfortably.
If you are an expatriate or foreign investor interested in properties, you will have to pay a property tax. This is regardless of whether your property is owner-occupied or tenanted out. Click here to understand Property Tax calculations in Singapore better. Once again, the property tax rate in Singapore is comparable to other countries and does not eat into your rental income too much.
While income and property taxes here are a part and parcel of life, there is no capital gains tax in Singapore. This means that you don’t pay taxes on profits that you get from investments in assets such as the sale of property, stocks, bonds, unit trusts, and even gains on foreign exchange, plant and equipment. It doesn’t matter if your financial investments are local or foreign - you can invest in both from Singapore and still not pay taxes (to the Singapore government) on the gains of your stocks, bonds or unit trusts. Even if you receive a payout from your insurance plan, you don’t have to file this as profit.
3. Varying Investment Opportunities
Aside from investments in businesses and property, there are various other options available for your investment purposes. Most of these are typically found in other developing countries as well.
Common types of investments include Fixed Deposits, Unit Trusts, Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs) and even Foreign Exchange. Each option has its own advantages and disadvantages. What you decide to invest in solely depends on your current situation, your risk appetite and market conditions.
Let’s take stocks as an example. If you know the right portfolio of stocks to invest in and if you follow the financial markets closely enough, you can understand the right timings to enter and exit to make optimal gains for yourself. You are also not only limited to local markets. Many local and international brokerages have a presence in Singapore, making it a breeze for you to invest in the global financial market.
Thanks to its healthy financial infrastructure and innovative outlook towards technology, Singapore also has a booming FinTech (Financial Technology) landscape. This just goes to show that the investment options in Singapore will continue to grow and be gainful for the prudent investor.
Singapore’s name has become synonymous with stability, progress and innovation. If you’ve been an expat in Singapore long enough and haven’t taken advantage of the possible gains that you can get from investing in various options, the time is now. If you’ve just come across this article and are looking to expand your foreign investments, Singapore is a good place to start.
If you’re uncertain about where to start, I’d love to chat with you over virtual coffee. Get in touch with me.
Esther Perh
This page is purely for informational purposes only and should not be relied upon as financial advice. The statements and opinions expressed on this page are my own and are not endorsed by finexis.
