SINGAPORE: A COMPETITIVE PRIVATE BANKING CENTREJean Gueron, Magaging Director of the Singapore branch of Credit Agricole Suisse, shares with us a few principles he has learnt from the real economy: when it comes to business, please your client, motivate your staff and enrich your shareholders. He therefore considers Singapore to be an ideal private banking centre.
What Clients Want
Since the private banking business is international, this means that clients have different objectives and priorities depending on their age, economic background, citizenship, etc. There are, nevertheless, common criteria:
1. Trust and Security
a) Trust the country
- Singapore is one of the most politically stable countries in Asia, and the only Asian country with an S&P rating of "AAA";
- Based on the British Common Law System, modern and innovative laws have created an environment conducive to the development of a broad range of offshore financial services. Singapore's banking and financial system is open and transparent, and rules are strictly enforced. It is ranked as the second most transparent country in the world, according to the IMD World Competitiveness Yearbook 2008.
- There are no obstacles obstructing the free flow of capital imports and exports.
- For a visitor, or a resident, Singapore is one of the safest countries in the world, and benefits from its position as a medical hub.
b) Trust the banks
- In just over three decades, Singapore has established itself as a thriving international financial centre, currently playing host to 167 banks, 110 fund managers and 152 insurance companies, and is amongst the most financially sound in the world.
- The Monetary Authority of Singapore (MAS) is recognised for its integrity, efficiency and impeccable management of the banking industry. During the crisis, the Singapore government decided to guarantee all Singapore dollar and foreign currency deposits of individual and non-bank customers in banks, finance companies and merchant banks licensed by the MAS until 31 December 2010.
c) Trust the advisors
- Advisors need to meet certain educational requirements defined by the MAS.
- The staff must be trained, and the government set up a wealth management institute as an avenue for this purpose.
- Penalties are heavy for banks and bankers who do not follow the strict regulations set out by the authorities.
2. Speak My Language, Respect My Religion, Understand My Culture
Singapore has four official languages: Malay, Mandarin, Tamil and English. The latter is spoken by the entire population as it is the language of business and administration. Out of its five million inhabitants, 1.25 million non-residents come from all over the world, bringing with them their own cultures and languages. Singapore has a very open view on religions counting 42 per cent Buddhist, 15 per cent Muslim, 14 per cent Christian, 9 per cent Taoist and 4 per cent Hindu.
3. Market Opportunities
After the crisis, Asia appears to be one of the best areas for economic growth, presenting regional opportunities for investment in business, real estate, equities, bonds, forex and alternative investments. The IMD ranks Singapore second in terms of world investment potential. Singapore, one of the leader countries of Asean, is ideally located with the ability to reach the Asian markets. Its stock exchange is number three in Asia, and its real estate market is open to foreigners, including landed property in the case of Sentosa Island. Through their international desks, most banks also provide "Western" kinds of investments.
4. Effective Tax Policies
Singapore offers its residents one of the lowest tax rates in the world, and does not tax their foreign-sourced income. There are no stamp duties on financial investments, wealth taxes, interest income or capital gain taxes for individuals, estates or gift duties.
Singapore also offers the advantage of having a comprehensive network of double taxation agreements with more than 60 countries, including Russia, France, Germany, Italy, etc. In 2009, Singapore announced it would endorse the Organization for Economic Cooperation and Development's EOI Standard for the effective exchange of information through Avoidance of Double Taxation Agreements (DTAs). The Island Revenue Authority of Singapore will provide information, including information held by a bank or trust company, in response to bona fide requests made under DTAs, providing it is duly documented (no "fishing expeditions") and ordered by the High Court. It does not fall under the European Savings Directive.
Singapore offers a broad range of visas for investors, entrepreneurs or rich foreigners who would like to take up permanent residence. They would need to have a minimum of S$20 million of wealth, of which at least five million is invested in Singapore.
5. Meet a Personal or Business Interest
"Do not put your money where you wouldn't go!" is a good private banking rule. For many wealthy persons, Singapore is the final destination, or a stop on their trip for business (gateway for Asia), leisure (Bali, Phukhet, etc.), children's education or medical services (Singapore). It is the opportunity to discover the Lion City and its banking infrastructure.
International travel out of Singapore is extremely convenient, with more than 80 international airlines operating scheduled services through Singapore to 180 cities in over 50 countries worldwide.
6. Staff is Key
On the education side, training its population has always been a priority in Singapore, which positions itself as a regional hub of education – out of the 20 best business schools worldwide, four have set up in Singapore.
Singapore's immigration laws for foreign talent are the least restrictive in the world. Singapore maintains top position in BERI's Labour Force Evaluation Measure 2009. It provides young immigrants with a broad choice of international schools and universities for their children.
Singapore is now ranked the first best place to live for Asian expatriates and intends to improve its position worldwide with Formula One, two casinos as part of the Integrated Resorts and investments in culture and recreation.
Focusing on private banking as one of its key developments, Singapore presents a world of opportunities for professionals who establish themselves in Singapore on the long term.
7. A Good Investment
Singapore is the world's easiest place to do business, according to the World Bank's Doing Business 2009 report. Besides having consistently been ranked one of the most active foreign exchange trading centres in the world, with an average daily foreign exchange turnover of US$230 billion, Singapore is also expected to be the fastest-growing offshore private banking centre in the next five years. Despite the global crisis, assets managed in Singapore at the end of 2008 stood at S$864 billion, i.e. a five-year average growth rate of 16 peer cent per annum in 2008 compared to 28 per cent in 2007.
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