Offshore Investment in Singapore and Dubai

Ahead of the July 1st introduction date for the new EU Savings Tax Directive certain offshore centres not included within the scope of the Directive are seeing a massive influx of offshore funds.

Offshore investment in Singapore and Dubai is booming!

These alternative offshore investment centres are growing in attraction for investors and therefore benefiting from a boost in investment income; but how wary should an investor be of these two jurisdictions and how safe are these alternative centres really?

Firstly let’s examine Singapore…Singapore is considered a particularly stable jurisdiction by many - both in economic and political terms.  The country enforces strict legislation and legal restrictions on the entire banking and financial services sectors for the direct protection of the investor.  This means that those who are moving funds to Singapore should be afforded a high degree of personal privacy and asset security. 

Singapore benefits from fantastic infrastructure and telecommunications links as well which enables businesses to carry out international transactions and global dealings with ease.  This has led to Singapore becoming the regional banking centre for South East Asia and all the major banks and investment houses have established their regional hubs in the country.

Non-residents of Singapore are not taxed on any income from a foreign source whether that income is remitted to Singapore or not, and in February 2005 the prime minister announced significant and far reaching changes to the income tax regime and he also implemented a series of tax breaks and incentives designed purely to boost the country’s attraction as an offshore centre.  Therefore it is safe to say that Singapore will continue to benefit and grow as an offshore financial hub and that investors will be afforded protection and attractive conditions for the foreseeable future.

The Emirate of Dubai is the second of the alternative offshore investment centres that is currently seeing a significant influx of overseas funds.  The Emirate has worked hard for the past twenty years to move away from its dependence on oil generated wealth.  As a result it has established itself as one of the most attractive, flexible and cost effective locations for businesses to base themselves in and for individuals to live work and prosper in.

In 2002 plans for the Dubai International Financial Centre were introduced.  The DIFC will be a significant financial hub for institutional investment and be recognised globally as on a par with Wall Street and the City.  By 2008 when the centre is fully functioning it will work to strengthen the economy of Dubai and also to lead the United Arab Emirates forward through diversification for future financial strength.  It is planned that by 2010 the centre will raise the income generated across the UAE from the financial services sector to 20% of the entire Emirates’ GDP.

There are no income, capital gains or withholding taxes in Dubai apart from those levied directly against the oil and domestic banking industries and this fact is not set to change!  Therefore this incredibly technologically advanced jurisdiction is highly attractive to investors and also for residents and businesses alike and will remain so for the foreseeable future.