Singapore: no capital gains or inheritance tax, but demanding residency rules

Gains on the disposal of property, shares and financial instruments are not taxed: the applicable rate is 0%¹. For a portfolio of financial assets, this is the jurisdiction's most significant advantage.

Nor is there any inheritance tax: the corresponding tax has been abolished. The transfer of assets held in Singapore is therefore not subject to any levy there.

The personal rate schedule is progressive and moderate: it starts at 0%² and peaks at 24%³ at its top marginal rate.

Corporate income tax stands at 17%⁴, with partial exemption schemes for start-ups.

This combination — untaxed capital gains, untaxed inheritances, a capped rate schedule — explains the concentration of family wealth management structures in the city-state.

The absence of capital gains tax needs clarifying, as it is not absolute. Singapore does not tax capital gains, but the tax authority recharacterises gains from repeated transactions amounting to trading as business income. The line is drawn on the basis of a range of indicators: frequency of transactions, holding period, financing and reason for the sale.

Singapore does not grant a residence permit in return for a simple passive investment. The investor programme requires SGD 10,000,000⁵ for its first option, or SGD 10,000,000⁶ for the alternative option.

These amounts also require a genuine business project, a business plan and commitments to create economic activity. This is not residency by investment in the usual sense of the term.

The other routes are through skilled employment, with high salary thresholds, or by setting up a business. All of them require a demonstrable economic contribution.

Tax residency is acquired in particular through presence of 183 days⁷ during the year. A non-resident is taxed under separate rules, which are less favourable for employment income.

The Singaporean passport gives visa-free access to about 195⁸ destinations, ranking first in the world. Naturalisation, however, requires long residence and renouncing one's original nationality, which rules it out for most French nationals.

Singapore regularly ranks among the most expensive cities in the world. Housing, international schooling and access to a car are the three decisive cost items.

Cars deserve a particular mention: vehicle ownership is regulated by a system of auctioned purchase entitlements, which makes it one of the most expensive anywhere on the planet. This is a cost item with no equivalent elsewhere.

Property purchases by foreigners are also subject to additional duties set at a deterrent level, which have been raised several times to contain foreign demand.

We do not publish the rate of these additional duties or a typical monthly budget: we were unable to verify them in an up-to-date official Singaporean source.

The trade-off for a family is therefore clear: the tax advantage is real and lasting, but it is largely absorbed by housing and schooling. For substantial wealth and high incomes, it remains very favourable; for an average income, it disappears.

• No tax on capital gains or inheritances: this is the foundation of Singapore's appeal.
• Access requires a genuine economic contribution, not a passive investment.
• The additional duties on property purchases by foreigners are a deterrent.
• Tax residency is acquired from 183 days⁷ of presence per year.
• For a family, the cost of living takes back a large share of the tax advantage.

Finally, Singapore applies international standards on exchange of information and has adopted a minimum tax for large groups. The jurisdiction presents itself as a management centre rather than a haven, and derives its strength from this: what it offers is not a loophole but a simple, stable tax system that it fully stands behind.