What secrecy? Transparency is the way to protect your wealth

Looks like confidentiality has gone obsolete as wealthy families may just place a greater emphasis on proper tax planning than on banking secrecy.

James Huang, head of the Finance and Projects team Baker & McKenzie.Wong & Leow Singapore, noted that the global move towards greater tax transparency has brought about a sea change in the way the world's wealthy view their wealth. Therefore as the world becomes more transparent, we find many wealthy families place a greater emphasis on proper tax planning, instead of relying on banking secrecy and confidentiality to protect their wealth. “Instead of asking whether their money or the structure will be kept confidential and undisclosed to tax authorities back home, the starting point for more and more clients is to ask how the structure treated is under the tax and regulatory rules of the home country and the country in which the assets are booked," he added.

So transparency seems to be the smarter way to protect one’s health, but how is Singapore taking this? Well, Huang noted that Singapore is in a good position, financially speaking. “With wealth growing rapidly in the Asia-Pacific region (accounting for more than half of the increase in global wealth last year), Singapore, with its geographical proximity, well regulated capital markets and trade linkages to countries such as India, China and Indonesia, is well positioned to grow as an international financial and wealth management centre.”

In terms of tax talks and financial stability, what could be Singapore’s competitive advantage? According to Huang, many classic offshore tax havens are not jurisdictions where substantive business activities are located and their main economic activity is the booking of assets. But Singapore has a diverse financial sector that has a wider range of services including access to capital markets - something investors can definitely benefit from. “Unlike these offshore tax havens, Singapore has historically served as a location for substantive business activities and a gateway to opportunities in Asia. Its vibrant financial centre thrives within a larger economy consisting of manufacturing, trade and services sectors.”

Also, given that Singapore houses a good number of multinational companies’ headquarters, a key motivation for the inflow of foreign funds is a greater proximity to the Asian markets and opportunities. “This unique 'onshore-offshore' feature of Singapore's economy gives Singapore an edge over classic offshore tax havens," he concluded. 

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