Singapore Becoming One of the World’s Stellar Tax Havens

The New York Times has a thorough story detailing how officials in Singapore are taking advantage of globalization to diversify the nation’s economy. Bank secrecy and good tax law are particularly helpful in attracting capital from people suffering from fiscal oppression:

This affluent city-state of 4.5 million people is aiming to be a sanctuary for the world’s wealthy and their money, Asia’s answer to Geneva and Zurich. … Now the tiny enclave at the tip of the Malay peninsula is trying to carve out a new niche for itself in the global economy by bolstering banking secrecy laws and offering generous tax incentives. “I can’t think of any other place where private banking is growing so much as in Singapore,” said Henrik Mikkelsen, a private banker at Commerzbank in Singapore. “We want to be the Switzerland of Asia.” … Almost 40 private banks now have regional operations in Singapore, including Swiss stalwarts such as Bank Julius Baer. Citigroup’s headquarters for all private banking outside the United States is now in Singapore, as is the global banking headquarters of Standard Chartered Bank of Britain. …Robert Chandran, who emigrated to the US from India and made fortunes in California real estate and the fuel oil business. In 2005, contemplating retirement, he moved his company and family here, bought a luxury condominium downtown and space in a waterfront resort with parking for yachts. He traded in his American passport for one from Singapore. Chandran said he was lured by Singapore’s blend of Western conveniences with Asian values and by the Government’s zeal for keeping Singapore competitive. “They don’t have global taxation,” he said, which means that his capital gains and interest income from outside Singapore are not taxed here. …Tax rates are low as well. Singapore does not tax capital gains or interest income. Its top income tax rate is 20 per cent, and it does not tax income earned outside Singapore. … Singapore had already beefed up its banking secrecy laws in 2001. While many banks are moving their back offices to India, bankers here say Singapore’s secrecy rules are so tight, they are moving the data centres handling their private banking transactions from India to Singapore. … Singapore’s secrecy rules do not extend to anyone involved in terrorism or smuggling.