Trust was traditionally offered to the aristocrats or ultra-wealthy families for legacy planning. However, as time goes by, finance institutions found that trust can also be relevant to the everyday people as well.
To set up a Singapore Private Trust Company (PTC), you should know the requirements and responsibilities involved.
What are Private Trust Companies?
A private trust company is established to act as corporate trustee to a trust, created by the appointed settlor connected to the settlor.
Each beneficiary of the trust is a connected person in relation to the settlor of such trust. Such a person can be described as:
What are the Benefits of Setting Up a Singapore Private Trust Company?
There is a list of benefits the trustee can gain by engaging Singapore private trust company:
Will vs Trust
A person’s will be a legal declaration of a person’s wish regarding the succession of the owner assets in a legally bind document after the person’s death.
A private trust is where the beneficiaries are definite and specific individuals which are already mentioned in the legally bind document. It can be owned even when the owner is still alive.
People Involved in a Singapore Private Trust Company (PTC)?
Here are the people who are involved when you setup a Singapore PTC.
Key Requirements for Singapore Private Trust Company Setup
The purpose of PTC is to provide trust services to the family and is prohibited from soliciting trust business from and provide trust services to the public.
Trust for Family members
In recent years, the trusts are becoming more well-known due to their features that can override inheritance tax and gift tax which is otherwise is taxable against the beneficiaries under certain jurisdiction if it is transferred via the will.
In lieu of this, aristocrats often chose to pass on their inheritance to their children via trusts instead of will. Even though venturing into trust involves recurring costs such as service fees, however it is still considered cost effective as it provides more benefits such as tax savings and confidentiality.
For those with high-risk profiles, protecting their accumulated wealth from being attached to any litigation is a usual concern. Hence, placing their wealth in trust will indirectly alienate the assets from such claims as the ownership is transferred to the trust and the beneficiaries are guaranteed income from the trust.
As for family businesses, placing their shares in the form of trust will ensure its continuance despite any potential disputes amongst the family members as well as bankruptcy. Hence, placing the shares in the form of trust will not on benefit the family members as beneficiaries but will also preserve the family business for generations to come.
Another benefit a trust provides is confidentiality, as it can be established overseas and privately. Furthermore, trust assets would not be liable to any probate proceedings when the settlor passes away, minimising exposure to the public eye.
How Long Does a Trust Last ?
However, take note that a trust is not perpetual. Trusts created after 2004 last for 100 years. Subject to these new laws, the duration of a trust is determined by:
There are pros and cons to incorporating a company in both countries. Read more about it here!
There are Employment pass, Entrepass, Personalised Employment pass, S Pass, and Work Permit. Each visa has its requirements, and you can find more about it here.
There are some reasons why investors are setting up businesses in Singapore. These reason include:
- #1 in the Best Business Environment 2020 by The Economist Intelligence Unit
- #1 in the Human Capital Index 2020 by World Bank Group
- #1 in the Economic Freedom Index 2021 by The Heritage Foundation
- #2 in the Ease of Doing Business Ranking 2021 by The World Bank
- #3 in the Corruption Perceptions Index 2020 by Transparency International
- #4 in the Starting A Business Ranking 2021 by The World Bank
- #5 in the World Competitiveness Ranking 2021 by Institute for Management Development
Find out more reasons why here!
The corporate tax rate in Singapore is 17%. The personal income tax rate is capped at a maximum of 20%