How to purchase assets in Singapore

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A purchase of assets in Singapore may give rise to income tax and stamp duty implications for the seller and buyer. Where the asset is a real property, the amount of stamp duty payable on transfer may be substantial. And where capital allowances have been claimed on the assets, they may be recaptured by and taxable to the seller, depending on the consideration. 

For tax purposes, it is advisable to specify in the sale and purchase agreement an allocation that is commercially justifiable. For trading stocks, the transfer can be at net book value. Otherwise, the open market value is substituted as the transfer value. The amount of goodwill written off or amortized to the income statement of the company is non- deductible on the basis that the expense is capital in nature. 

The ITA contains provisions for granting initial and annual tax depreciation allowances on capital expenditure incurred on qualifying assets used. In the case of an asset transfer, the unused tax losses and capital allowances remain with the company unless the transfer is a qualifying corporate amalgamation. Stamp duty is payable on documents relating to the transfer of immovable properties and shares in accordance with the Stamp Duties Act. And the stamp duty payable on documents relating to the transfer of immovable properties is computed based on the higher of the purchase consideration. 

Buyer’s Stamp Duty (BSD) is payable by the buyer at the following rates:  

Value  Buyer’s Stamp Duty rate 
On the first SGD180,000  1 percent 
On the next SGD180,000  2 percent 
On any remaining balance  3 percent 

 Additional Buyer’s Stamp Duty (ABSD) may be payable by the buyer on top of BSD for acquisitions of residential property located in Singapore, depending on the profile of the buyer. Foreigners and non-individuals buying residential property located in Singapore must pay ABSD of 15 percent on the purchase. 

 Stamp duty is payable on documents relating to the transfer of shares in a Singapore company that is executed in Singapore. The rate of duty is 0.2 percent on the higher of the consideration or the value of the shares. IRAS will carry out back-end audit checks to ensure the amount of duty paid reflects the true value of the shares transferred, especially for non-arm’s length transfers. 

 Since 2005 we help companies to enter new market and already over 250 clients trusted us. Do you want to know more about how we can support your expansion? Please call us in any of our 11 offices in the 4 continents, or just email us for conference call.

Salina 13th birthday

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The year where Salina set a foot on one more continent, Africa!

As the Chinese, the South East Asian markets are massively betting on the African market expansion. The last four years China invest over USD70 billion in the African Continent. Singapore government is seeing the opportunities for SMEs to expand rapidly and recently organize the “Africa Singapore Business Forum” for promoting business exchange and thought leadership between Africa and Asia.

The last 12 months we helped not only Singaporean companies entering the Africa market, but also European and North American companies. The most dynamic sectors are construction, shipping, logistics, education and energy. Thanks to our business network, we were able to raise capital for several companies to support faster their development in this new Eldorado.

Our London office has a tremendous year! Despite the Brexit, Great Britain remains the largest country attracting foreign investment in the European Union. This has been possible due to the wide variety of sectors offering competitive opportunities. We are thinking about the automotive sector, energy, healthcare, and of course finance and banking.

Thanks to France location, EU hub, our Paris office encounter an exponential growth this year. The French government is investing and betting in the new technologies and multiple the tax cut for the foreign investors and young dynamic entrepreneurs. The Greater Paris’ project will develop the already exceptional infrastructures. JP Morgan will invest USD30 million in the next five year in this gigantic project.

If you are planning to enter these markets, or others, please feel free to contact us in one of our 11 offices worldwide in the 4 Continents. The first consulting hour is free of charge.

How to prepare for a financing meeting

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Since 2005 we have had the privilege of attending more than 2,000 introductory meetings with companies. Based on that experience, here are few tips to help founding teams prepare for a financing meeting.

Plan to bring at most three people. The CEO and a cofounder, if applicable, and the chief technical person will be enough. The person who understands the market opportunity and the competition best should attend. Some bring their chief financial officer, which is not necessary. Your CEO should be able to speak to financial questions.

This presentation should look very different from the pitch you give to sales prospects. We are not buying your product. You need to demonstrate how great your team is, where your company fits into the world, and how well your group is suited to capitalize on the opportunity.

Come well prepared with a compelling deck, but don’t let the presentation and the plans you have for this meeting take over. A robust two-way discussion is the best. We will tell you what investors are looking for.

It’s important that the meeting not run over its allotted time, typically an hour. Therefore, your deck should take no more than 30 minutes to deliver when not interrupted; with introductions, questions, and discussion, you should be right on time. The CEO should deliver the bulk of the presentation, with others responding to questions.

Any initial meeting is a two-way street. Come prepared, not just with information about your company but with what you are looking for in a financing partner. A second meeting will be your reward to prepare your business expansion. Contact us now, the first meeting is free of charge.

Singapore Market Opportunities

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Exporters will find a promising market for the following industry sectors in Singapore: Aviation and defense, ICT and digital technologies (fintech, e-commerce, smart cities, smart grids), energy and environment (oil and gas, water), healthcare and medtech.

The following are major infrastructure projects, significant government procurements and business opportunities in Singapore:

  • Construction of Singapore Changi Airport Terminal 5 and a third runway scheduled for completion around 2030;
  • Singapore’s Next Generation Port Vision for Tuas Terminal to be constructed in 4 Phases; with Phases 1 and 2 tenders awarded; there will be two more phases of tenders to complete the future port by 2040;
  • Deep Tunnel Sewerage System Phase 2 targeted for completion in 2025;
  • Singapore Government ICT tenders of more than US$1.9 billion and other Smart City projects;
  • Major redevelopment of Singapore’s oldest and largest hospital, renamed the Outram Campus and Community Hospital, is set to take place from 2025 to 2035 and a New National Cancer Center will be housed there;
  • Over the medium term, five new public hospitals and up to twelve more polyclinics will be built by 2030 and there are plans to build new and replacement nursing homes to bring the total to 25 by 2020;
  • A new US$135 million National Heart Center building is currently being built at the Singapore General Hospital and scheduled for completion in 2020;
  • Other infrastructure projects include the Woodlands Health Campus and the existing Tan Tock Seng Hospital.  These are scheduled to progressively come on stream between 2020 and 2036;
  • Advanced water technology and infrastructure in areas such as filtering and purifying machinery and apparatus, technologies involving wastewater recycling and treatment, and desalination technologies;
  • US$8.0 million pilot project to determine feasibility of floating solar panels on reservoirs to generate electricity;
  • Singapore Power’s US$22.55 million Center of Excellence is seeking to develop next generation network technology for better reliability and efficiency for electricity/gas transmission and distribution.

Since 2005 we help companies enter Singapore market. You want to know more about our services, please contact us. The first hour of consultation is free of charge.

How can you enter new markets ?

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No one market entry strategy works for all international markets. There will be a number of factors that will influence your choice of strategy, including, but not limited to, tariff rates, the degree of adaptation, marketing and transportation costs. The following strategies are the main entry options open to you.

Direct exporting is selling into the market you have chosen using you own resources. Once you have established a sales program, distributors will represent you further in that market. They become the face of your company and thus it is important that your choice is handled the same way you would hire a key staff person.

Licensing is a relatively sophisticated arrangement where you can transfer the rights to the use of your product to another firm. It is a particularly useful strategy if the purchaser of the license has a relatively large market share in the country you want to enter.

Partnering is a particularly useful strategy in those markets where the culture, both business and social, are substantively different than your own, as local partners bring local market knowledge, contacts and customers.

Joint ventures are a particular form of partnership that involves the creation of a third independently managed company. Two companies agree to work together in a particular market, either geographic or product, and create a third company to undertake this. Risks and profits are normally shared equally.

Buying an existing local company may be the most appropriate entry strategy. Because the purchased company has substantial market share and is a direct competitor to you. It is certainly the most costly, and determining the true value of a company in a new market will require due diligence. On the plus side this entry strategy will immediately provide you the status of being a local company and you will receive the benefits of local market knowledge, an established customer base and be treated by the local government as a local firm.

Turnkey projects are particular to companies that provide services such as consulting, architecture, education, construction and engineering. A turnkey project is where the facility is built from the ground up and turned over to the client ready to go.

Since 2005 we help companies to enter new markets in Europe and Asia. 200 over companies trusted our services in over 25 countries. Want to know more about how to enter new markets. Contact us now, the first hour of consultation is free of charge.