| Emerging out of the global economic crisis businesses | | | | Singapore's exchange will see buzzing activity due to |
| and investors around the world are revving up to | | | | more number of Chinese companies choosing to list |
| capitalize on the economic momentum of the Asian | | | | themselves in Singapore. Singapore is gaining lot of |
| region, especially China and similarly the Asian | | | | attention despite the close proximity of Hong Kong |
| businesses, a significant number of Chinese are | | | | and Shanghai for these Chinese companies because |
| gradually venturing out into markets that are farther | | | | of their niche business sectors such as oil-and-gas, |
| away from the regional hot picks. Singapore is the | | | | shipping and offshore marine sectors, as well as |
| preferred location for such businesses due to the | | | | water treatment, waste recycling and alternative |
| world class infrastructure, international banking | | | | energy. |
| facilities and ease of incorporating a Singapore | | | | The 2007 revised China-Singapore Double Tax Treaty |
| company. | | | | (DTT) assures many privileges. Under the new |
| At a recent briefing at Marina Bay Sands, the | | | | treaty, withholding tax on dividends paid by a Chinese |
| American banking behemoth Citigroup's, Country | | | | company to a Singapore resident are cut to 5% |
| Officer for Singapore, Mr. Michael Zink, gave an | | | | from 7%, provided that the recipient is a company |
| insights into the local unit's plan to woo the growing | | | | that holds at least 25% of the capital of the Chinese |
| pool of Chinese companies in the city state. He said | | | | company. In all other cases the withholding tax on |
| the bank wanted to play the role of an enabler 'to | | | | dividends has been cut to 10% from 12%. Dividends |
| attract and support Chinese multinationals looking to | | | | from a Chinese foreign investment enterprise (FIE) |
| expand outside the mainland'. The local unit of the | | | | with at least 25% registered capital held by |
| American banking giant has set up a China desk to | | | | Singaporean investor(s) are generally exempt from |
| encourage mainland Chinese businesses to use | | | | Withholding Tax under the current Chinese domestic |
| Singapore as a spring-board into Asia and beyond. | | | | tax legislation. All other cases are taxed at 10%. |
| Given the present strength of Asia and the booming | | | | Provided certain conditions are met the treaty also |
| Chinese economy Mr. Zink anticipates that Singapore | | | | provides a full tax exemption in China on a capital |
| will be a preferred gateway to the region for more | | | | gains derived by a Singapore investor from the |
| Chinese firms. Industry experts believe that, | | | | disposal of shares in a Chinese company. |
| Singapore will increasingly play host to many of the | | | | The revised China-Singapore DTT supports the |
| china bound investments as well. | | | | rationale for multinationals when selecting Singapore |
| Official figures reveal that 3,000 Chinese firms are | | | | as the location for an intermediate company to hold |
| registered in Singapore and of them 149 are listed on | | | | investments in China, and as for the China's outbound |
| the Singapore stock exchange. Singapore will be an | | | | businesses a Singapore incorporated company means |
| axis for not only the regional investments and | | | | an instant recognition internationally. There are other |
| operations but also for many of the region's | | | | significant benefits which come mostly in the form of |
| especially that of China's outbound investments and | | | | modern financial and banking systems that is easily |
| operations targeting Middle East, Africa, Europe and | | | | available in the country and the potential access to |
| the Americas. | | | | the flourishing capital market here is an additional |
| Earlier in April, Global Intelligence Alliance (GIA), a | | | | bonus. For cross border investments and businesses, |
| global strategic market intelligence and advisory | | | | the prime criteria are financial institutions that support |
| group, had predicted that Chinese outbound merger | | | | the complex nature of international transactions and a |
| and acquisition (M&A) activity will gather speed | | | | strong judicial system. Singapore satisfies both these |
| strongly in the next few years, driven by an appetite | | | | requirements and provides more indeed, CITI's plans |
| for deal-making in China as well as relatively attractive | | | | for the China wave is at the right time and we can |
| asset valuations in overseas markets. Early this year | | | | anticipate more such efforts and facilities from its |
| financial industry experts had forecast that | | | | peers in the financial sector soon. |