Advertisement
Singapore
This Week in AsiaEconomics

Singapore mulls ways to remain magnet for wealthy investors after G20 corporate tax deal

  • Global minimum tax not a ‘deal breaker’ but could affect American firms seen as strategic investors
  • Singapore, Hong Kong now need to sharpen non-tax incentives, be more business friendly

Reading Time:6 minutes
Why you can trust SCMP
9
Italian President Sergio Mattarella addresses a reception and dinner at The Quirinale Palace, on the sidelines of the G20 World Leaders Summit. Photo: DPA
Dewey Sim
After leaders of 20 of the world’s biggest economies endorsed a global minimum tax of 15 per cent on large multinational businesses, Singapore Prime Minister Lee Hsien Loong flagged the city state’s concerns about drawing in foreign investment.
Singapore would consider how to “modify” its tax incentives, Lee said in comments to reporters on the sidelines of the G20 summit in Rome.

“I foresee there will be tougher competition for us. But we will take it in our stride,” he said.

Singapore has a corporate tax rate of 17 per cent but its Economic Development Board has long offered priority investors grants and other schemes that reduce the effective rate to as little as 4 per cent in some cases. Its political stability and strong legal system are also factors that have incentivised billionaires including Facebook co-founder Eduardo Saverin and hotpot chain Haidilao boss Zhang Yong to sink their roots in Singapore, snapping up flashy properties in the process.

While Singapore does not have wealth taxes, there are growing discussions of the topic as the city state seeks ways to meet higher social expenditure to address a growing wealth gap and the needs of its rapidly ageing population.
Singapore Prime Minister Lee Hsien Loong speaks with officials in Rome on the sidelines of the G20 Summit. Photo: AFP
Singapore Prime Minister Lee Hsien Loong speaks with officials in Rome on the sidelines of the G20 Summit. Photo: AFP

Singapore has consistently been the top destination for foreign capital inflows in Southeast Asia. According to a United Nations investment report, the city state accounted for 67 per cent of total investments in the region last year, with US$91 billion worth of capital inflow.

Advertisement