Maritime International Advisor

SINGAPORE PRIVACY IN A TAX INFORMATION EXCHANGE WORLD

June 10, 2010 - Singapore has a signed the required 12 Double Taxation Treaties (DTT's) as forced on it by the OECD to avoid the notorious "blacklisting". It is now on the "White List". It is important to note that not all DTT's are alike and Singapore has gone its own way, ignoring the OECD's "Model" of the Article 26 Guideline which specifies the conditions for the exchange of tax information between countries.

In considering DTT's and their impact on client confidentiality, it should be recognized that there are many varieties of the OECD Article 26 Guideline. Lately there has come a new customized variation, particularly in Singapore and Hong Kong, which strengthen a client's right to privacy and prevent "fishing" expeditions such as occurred with the UBS debacle in Switzerland.

In summary, Singapore has designed its own Article 26, both to protect clients from frivolous disclosure of their private business, as well as preventing "fishing" expeditions. Obtaining tax information from Singapore will, as a result, be difficult and expensive. This is as it should be, to protect tax payers from misuse of authority by government bureaucrats.

Requests for tax information from Singapore authorities must meet stringent requirements. The person making the request must be identified (There can be no John Doe requests.); grounds for believing that the information requested is available in Singapore must be proved ("no fishing"); evidence that the requesting country has exhausted all its own means of obtaining such information must also be provided. More importantly, the individual involved must be notified of the request, the request for approval of the release of information must go to the High Court of Singapore and the individual can defend themselves against the release of information and call for the request to be denied or modified.

It is interesting to note that jurisdictions with strong conditions on the implementation of Section 26, such as Singapore has done, have typically averaged only a few successful inquiries per year.

Of course the factors requiring the specific identification of the individual, in order to activate tax information exchange, reinforces what Maritime International Ltd., has always advised:

• Always have your company and bank account in different jurisdictions.
• Never use a local resident Registered Agent to incorporate your company.
• Always open a corporate bank account, not a personal one.

The objective, of course, is to ensure your name does not appear in the jurisdiction of incorporation, providing privacy and security.

Given the above, we recommend Singapore as a 5 Star (*****) jurisdiction with excellent privacy, as well as being widely known and respected throughout Asia. Drawbacks are the requirements for a resident Director and the filing of corporate statements. As a service to clients however, Maritime International Ltd., can provide inexpensive accounting and filing. These requirements increase the cost but the jurisdiction is fully tax free, well respected and privacy is excellent.

Singapore is a business friendly, International Financial Center, with major banks, hundreds of foreign companies and thousands of expats. It is the 4th largest foreign exchange trading center in the world and the world's busiest port. The official languages are English, Mandarin, Malay and Tamili. English is the administrative language and is widely spoken.

Read more details on our website on the Singapore Offshore Company.

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