BSL… Your One-Stop Solutions Provider

1. INTERNATIONAL TAX PLANNING 2012: SINGAPORE BSL… Your One-Stop Solutions Provider 7 June 2012

4. Resorts World Sentosa Integrated Resorts Marina Bay Sands

5. 5 million people with 1.25 million foreigners • English speaking with 4 official languages • Safe and green, good school, healthcare, stable govt • Technology enabled society • 2011 GDP at US$ 253 billion

6. 1. GDP per capital – US$40,000 in 47 years Labour intensive to technology and knowledge base Singapore Growth

7. Territorial basis Corporate tax rate at 17% - Partial tax exemption on first $300,000 Chargeable Income (CI) - 8.4% - Including First $100,000 CI for new companies fully exempt in first 3 years – 5.7% No Capital Gains Tax No Estate duty Singapore Tax System

8. Carry-Back of tax losses One year loss carry-back subject to a cap of $100,000 of current year unutilized capital allowances and trade losses Group relief Loss transfer between locally incorporated group companies with 75% ownership One tier corporate tax system Tax collected from corporate profits final & dividend exempt from tax. No withholding tax on dividends Singapore Tax System (cont’d)

9. Goods and Services Tax at 7% Exemption of foreign sourced income Foreign sourced dividend, service fee & branch profits are tax exempt if: - Headline tax in source state is at least 15% or more, and - The foreign income has suffered some form of foreign tax Does not cover interest and royalty Singapore Tax System (cont’d)

10. Global talent attraction 0 to 20% personal resident tax rates Not Ordinarily Resident scheme allows time apportionment of taxation All foreign sourced income received by individuals are tax exempt Singapore Tax System (cont’d)

11. Singapore 69 DTA network & 18 FTA

12. Case study: RF company receiving design fees from Singapore. PE defined: “ furnishing of services in Singapore for a period aggregating more than 3 months in any 12 months period” Domestic rule : Payment to RF for technical services rendered in Singapore subject to 17% withholding tax. Tax treaty provides treaty relief on the basis of “NO PE, NO Tax”. Singapore DTA with Russian Federation (RF)

13. Advantages No Capital gains tax Certainty if seller holds a min of 20% in company whose shares are being disposed and the seller maintains 20% for 24 months prior to disposal No Singapore withholding tax on dividends Tax exempt capital gains are free to flow up as one tier exempt dividends to shareholders Singapore As A Holding Company Location

14. Advantages (cont’d) Exemption of certain foreign income Extensive treaty network Provides additional protection from double taxation as well as claim for foreign tax credits Singapore Tax incentives Singapore As A Holding Company Location

15. Development Expansion Incentive: International Headquarter Award (IHQ) Qualifying activities include: Sourcing, Procurement and Distribution, General Mgt & Adm & Tech services, Intellectual Property Mgt, R&D etc Min criteria to be satisfied for IHQ by year 5, are: Singapore Tax Incentives

16. Global Trader Program (GTP) Develop Singapore into an international trading hub Min criteria to be satisfied for a 5 year incentive period are: Singapore Tax Incentives

17. Singapore Tax IncentivesProductivity and Innovation Credit (PIC) R&D Registration Of IPRs Training of Employees PIC Acquisition Of IPRs Prescribed Automation Equipment Design Activities

18. Singapore Tax IncentivesProductivity and Innovation Credit (PIC) • Available to all businesses • 400% tax deduction for any of the 6 activities • Capped at $400,000 per activity per YA

19. Singapore Tax StructuringIndirect holding v Direct Holding • Indirect Holding • Pros • Mauritius and India very good tax treaty • Capital gains protection ? • No withholding tax on dividend distribution from India to Mauritius • No further tax in Mauritius • Mauritius dividend received by Singapore parent no further tax • Cons • India tax authority attacking the structure under General Anti-Avoidance Regulations Singapore parent Mauritius Intermediate India subsidiary

20. Singapore Tax StructuringIndirect holding v Direct Holding • Direct Holding - Pros • Singapore and India has very good tax treaty • Capital gains protection provided certain conditions are fulfilled • No withholding tax on dividend distribution from India to Singapore • No further tax on India dividend received by Singapore Parent • Exemption rule for foreign dividend easier to comply with • India tax authority unlikely to challenge provided Singapore parent can provide evidence it is not a conduit or shell company. Singapore parent India subsidiary

21. Singapore moved to OECD white list on 13 Nov 2009 Income Tax Act (Exchange of Information) Act takes effect from 9 Feb 2010 Adverse impact on private banking etc – Unlikely High Court Order required before any information request can be entertained Singapore - Exchange of Information

22. Takes 1 to 5 business days to incorporate a company upon approval of the selected company’s name; Incorporate with a minimum of 1 shareholder and 1 director; Appoint at least one director who is originally resident in Singapore; A minimum paid up capital of one Singapore dollar; Must maintain a registered office in Singapore; Must appoint a secretary which is a natural person; Singapore – Company set up

23. In the event when the director is the sole director, the secretary and the directory cannot be the same person; Auditors must be appointed within 3 months of incorporation for non-private exempt companies. Must hold an Annual General Meeting and lodge its annual returns with ACRA Private-exempt companies (Shareholders are individuals) with a turnover of S$5million may opt for audit exemption; Singapore – Company set up

24. Foreign investor who is interested to start up a business or invest in Singapore, may apply for the Singapore Permanent Residence (PR) status under the Global Investor Program. INVESTMENT OPTIONS Option A: Invest at least S$2.5 million in a new business entity or expansion of an existing business operation. Option B: Invest at least S$2.5 million in a GIP-approved fund You are eligible to apply if you have: (a) A substantial business track record (b) An entrepreneurial background (c) A business proposal or investment plan (for Option A) Singapore – Global Investor Program

25. ASSESSMENT CRITERIA FOR GIP APPLICATION For Applicants with entrepreneurial and business track record: (a) You must possess at least 3 years of entrepreneurial track record and must produce audited financial statements of your company for the last 3 years. (b) The turnover of your company must be: - At least S$30 million per annum in the most recent year; and - At least S$30 million per annum on average for the last 3 years. For senior executives who are interested to set up new business / expand existing business in Singapore (Option A): (a) You must have at least 10 years of corporate management experience and currently Chairman CEO, CFO, etc. (c) The turnover of the company in which you are employed must be at least S$100 million. Singapore – Global Investor Program

26. Our BSL Group Established in 1981, we are now over 70 strong professionals. • Our commitment for over 31 years: • Professional and personalized solutions; • Highest level of integrity; • Our partners are: • Dedicated and experienced; • Actively and personally involved in our clients’ cases, • Our professionals are: • Continually upgraded with technical and soft-skills training; • Encouraged to keep ourselves ahead of the developments in our respective professions and industries.

27. Our Services We recognize that each business is different. Therefore, we create a right-mixed team of expertly trained and best-in-class professionals providing solutions that meet our clients’ specific needs. • Accounting • Audit • Taxation / Business Consulting • Corporate Secretarial • Logistics and Supply Chain Execution Our clients benefit from the convenience and strength of a unified team, BSL … Your One-Stop Solutions Provider. BSL’s unique approach of a “One-Stop Solutions” provides a solid contribution to the growth of our clients’ businesses.

28. Our Clients’ say…. “As the owner of a small business operating in both Singapore and the United States, it is of great necessity that we work with an accounting firm offering a broad range of support, including corporate and management services, along with audit and tax preparation.  We have been working closely with BSL since 2007, when we first established our presence in Singapore.  The team at BSL remains very responsive and supportive in every way possible, and we have the highest regard for the professional service they continue to provide.  Their support has make an invaluable difference in our global business.  Peter McKown, Chief Financial Officer, Prince Street Capital Management Pte Ltd”

29. THANK YOUN Vimala DeviDID: +65 6833 6322MOBILE: +65 9852 6592E-mail: devi.vimala@bslts.com.sgThis presentation is for information only and not for any other purposes . Please feel free to contact me if you need any specific professional advice relating to your circumstances. BSL… Your One-Stop Service Provider