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Trust Services in Singapore

Trust Services in Singapore

Trust services in Singapore are employed by individuals or companies that need to transfer rights, properties, rights instruments or combinations thereof to another party that will act as a trustee. The aim of this transfer is to handle the needs of the beneficiaries.

In Singapore, both individuals and companies can set up a trust or employ the services of a company that specializes in asset management. Trust companies that provide these types of services are regulated by law and must observe clear and specific legal requirements as per handling wealth management issues.

Talking to an accountant in Singapore is the first step in deciding to use trust services or set-up a trust fund to manage assets.

Legislation on trusts in Singapore

In order to fully understand how one can benefit from trust services, foreign citizens seeking to establish this type of entity here must know that there are several laws that govern it. These are:

  1. the Trust Companies Act which provides for the requirements imposed on trust companies that administer the assets of trusts,
  2. the Trustees Act which provides for the services, the duties and powers of trustees appointed by the settlors,
  3. the Business Trust Act as it is possible to create trusts for investment purposes (usually employed when setting up investment funds)
  4. the Civil Law Act as a governing law of entities that do not fall under the Companies Act.

From a taxation point of view, our accounting firm in Singapore can offer all details.

Types of trusts that can be created in Singapore

As seen above, there are several types of trusts that can be set up in Singapore. These are:

  • private family trusts,
  • statutory trusts,
  • charitable trusts,
  • testamentary trusts,
  • collective investment trusts,

Under the local tax legislation, foreign trusts can be used in the city-case, case in which they can benefit from significant advantages, such as tax exemptions. Our accountant in Singapore can provide you with all the information related to the advantages of setting up trust funds here. Apart from this, you can also benefit from various trust services in Singapore.

Trust companies in Singapore

Many companies in Singapore offer trust services to clients who are in need of asset and wealth management. These legal entities are subject to specific legislation as the trust services industry is regulated in the city-state. The Trust Companies Act is the most important legislative document that governs the set-up and conduct of these types of companies in Singapore.

Trust companies that provide services in Singapore for individuals or for other companies need to have adequate licenses for their business scope, must observe the financial and reporting requirements and avoid activities related to money-laundering or financial fraud.

Our accounting firm in Singapore can answer your questions concerning tax reporting and tax requirements both for companies and for individuals who derive income from the city.

The trust fund in Singapore

One of the common entities created in Singapore is the trust fund thanks to the variety of assets that can be entrusted for administration. These can take the form of shares, land, money, or even family businesses. The trust fund can be created as a will, a trust deed, or even a declaration through which the settlor mentions the intention of creating it.

The trust fund can also be used as an asset protection tool by foreign citizens who live in Singapore.

The creation of trust implies appointing a trustee to manage the assets provided for in the creation deed.

From a taxation point of view, the levies imposed on the settlor, trustee and beneficiaries can be explained by our local accountants who can also provide various types of fiduciary services in relation to these entities.

The benefits of creating a trust in Singapore

The establishment of a trust in Singapore has many advantages, among which confidentiality and asset protection are some of the most important legal ones. It should also be noted that a trust can be used to protect goods against heirship requests. Also, the possibility of using trust services in Singapore is one of the main benefits for creating any type of trust.

From a taxation point of view, the trust is exempt from capital, estate and inheritance levies. Moreover, foreign citizens creating trusts in Singapore can obtain double tax protection in Singapore under the agreements signed by the city-state.

Individual estate and trust services in Singapore

Trust services are commonly requested by individuals interested in succession planning. Various types of trusts are available to clients, including the insurance trust, the investment trust, the property trust or the asset protection trust. The options should be considered carefully according to the existing wealth management issues and the desires of the settlor.

The objectives of the client may refer to asset management or tax minimization. By seeking proper accounting services in Singapore investors can choose the best wealth management instrument to suit their needs. 

Trust services offered by our accountants in Singapore

Our accounting firm in Singapore can offer various services to those who create trusts. Among these are:

  • tax advice,
  • tax consultancy,
  • bank account opening.

Foreign citizens and investors can also benefit from various accounting and audit services for their companies in Singapore. We also offer support in employment matters, such as payroll administration. Payroll in Singapore and other countries describes how an employer pays its employees. When it refers to a company’s financial records on employee compensation, the term explains how a company pays its employees and any associated taxes. This process is very important for all types of businesses which can rely on our accountants in Singapore.

Tax benefits for trusts created in Singapore

The trust has various tax advantages, such as the ones mentioned above, where a few exemptions from several taxes are provided. Apart from these, it should be noted that only trustees will be taxed in Singapore on the income generated from the services they offer. This means that the beneficiaries and the trust itself will not be subject to taxation in Singapore.

Also, Singapore resident trust beneficiaries who are entitled to the profits or other income generated by the trust will be imposed taxes on the distribution of such incomes, but they will also enjoy exemptions, credits and concessions.

Tax exemptions are also available for income originating from Qualifying Foreign Trusts (QFTs) and the companies holding them.

In order to assess the taxes that need to be paid in relation to being a beneficiary of a trust, Form T must be filed with the Singapore Inland Revenue Authority.

If you need accounting services in Singapore for a local or foreign trust, you can rely on us. You can also watch our video below:

Financial companies in Singapore

At the level of 2019, Singapore was a leading financial center in Southeast Asia with:

  • over 700 local and foreign financial companies operating here,
  • out of these, 126 were commercial banking institutions and 32 were merchant banks,
  • there were also 59 licenses trust companies operating in the city-state.

You can contact our accountants in Singapore if you need more information about trust services or related matters.