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Singapore has benefited from tight bank secrecy regulation, in addition to a rise in the number of Asian millionaires, especially the type that want to invest with private banks and financial instruments rather than in property. Yet in response to demand from the G20 group of developed countries, Singapore has promised to rethink its ultra private secrecy laws. Like Switzerland, Singapore has to walk the tightrope between keeping its sovereignty and international acceptance of its laws and banks. One of the reasons why Singapore has grown is because it already was a large financial center in its own right. Unlike smaller tax havens and dependencies of other countries which have been accused of ''inventing'' laws to benefit from capital flight, Singapore is a long-standing trading hub and center of international financial settlements. There are several arguments in favour of Singapore keeping its privacy laws. Many private banking clients in Singapore are very powerful people among neighbours like China, Indonesia and Thailand. It's in their interest to ensure that Singapore bank secrecy is not relaxed. Furthermore, Singapore is an international financial center - it cannot be blackmailed in the same way as other jurisdictions. However Singapore has made concessions, and may not necessarily see its future in harbouring Western tax evaders. Singapore has signed TIEAS with a number of countries and promised to adopt article 26 of the OECD model tax convention on information exchange over tax matters. After Swiss banking secrecy was put under the spotlight, it was widely reported that bankers were urging a massive flight of capital to Singapore, where bank secrecy rules still held strong. But in reality, basing any structure on bank secrecy is like building a house on a fault line, it's bound to change. The smartest investors instead used techniques which do not depend on bank secrecy in any single country. Savvy private banking clients are now using distinct structures which operate independent of bank secrecy such as investing through trusts or trust companies. Further, the reasons for banking in an offshore centre like Switerland do not depend entirely on tax. In fact the biggest reason is security. Hundreds of banks have been going under in the US, not Switzerland. Investors are also escaping from currency devaluations, civil forfeiture and frivolous lawsuits. Singapore wealth management is certainly growing in sophistication, but it is still in a learning phase. During the mid 2000's when Singapore's private banking industry was growing rapidly, it was alleged that ther were not enough bankers to meet demand. Singapore private banks were instead employing local hairdressers and carsalesmen with good people skills and turning them into private bankers. Singapore private banking is modelled closely on Swiss private banking, even down to its family trust law. In terms of weathering geo-political events like the war on bank secrecy, Singapore may have to follow the Swiss lead also.
Article Source: http://www.bharatbhasha.net Article Url: http://www.bharatbhasha.net/finance-and-business.php/175394 Article Added on Wednesday, October 14, 2009
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