Private equityrepresents theinvestment capitalreceived from individuals or corporations, which have as an intention toobtain equity ownershipin various companies. TheAsian marketofferspositive prospects for investing in private equity; if you are interested in theprivate equity transactions in Singapore,our team of lawyerscan provide you with information on themost profitable business in this field.
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Incentives for private equity in Singapore
According to theSingaporean legislation, there are no specific laws created especially for thefinancial development of private equity investments, but there are severaltaxation lawsthat encourage investment in this field.
TheInland Revenue Authority of Singaporehas changed in March 2015 thelegislation on the goods and services tax (GST), extending the applicableGSTon managers in thefund management industry. There isno capital gains taxand thecompanyisexempt from the income taxas long as the company has had20% of the ordinary sharesin target for two years before thedisposal of shares.
Singaporean government has extended theFinancial Sector Incentive Fund Management (FSI FM)until the end of 2018. Companies receiving theFSI FM awardwill receive a10% rate deduction on the income tax; you can request a consultation on thetax systemapplicable tofund companiesfromour lawyers in Singapore.
Offshore fund in Singapore
According to theSingaporean law, aninvestment fund set up as an offshore fundcan beexempt from the taxes on incomearising frominvestments.In this case,thefund’s income must beproduced by aSingapore fund management companywith alicense for capital markets services.The same exemption appliestofundsnot entirelyowned bySingaporean citizens.
Anoffshore fundcan be represented by an individual, a company or a trustee.
Qualifying investor in Singapore
If you are interested in theprivate equity businessand you want toinvest in a fund in Singapore, you should know that you must meet one of the following stipulations to be considered aqualifying investor:
• a non-resident citizen who does not have a permanent establishment or abusiness in Singapore;
• a person who can have abusiness in Singapore, but does not use the capital of his or her business to invest in aninvestment fund in Singapore;
• a person who doesn’t own more than30% of the value of a fund.
If you need further information on theprivate equity investments, pleasecontact our team of lawyers in Singapore, for legal representation or advice on this subject.
