Financial Sector Incentive (FSI) Scheme:

The FSI scheme covers a broad range of financial institutions, including bond intermediaries, derivative traders, fund managers, equity capital market intermediaries, operational headquarters, providers of high-value-added processing services supporting financial activities, providers of trustee and custodian services, and trust management or administration services. Financial institutions that plan to expand their Singapore operations and are prepared to meet various strict qualifying conditions may apply for this incentive.

Under the FSI scheme, income from certain high growth, high-value-added activities, such as services and transactions relating to the bond market, derivatives market, equity market, and credit facilities syndication, may be taxed at 5%, while a broader range of financial activities will qualify for a 13.5% tax rate.

The concessionary tax rates available under the FSI scheme will be revised to either 10% or 13.5% for new awards and renewals of existing awards approved on or after 1 January 2024.

Finance & Treasury Centre (FTC):

Income derived by an FTC from approved FTC activities is taxed at a reduced rate of 8% or 10%. Approved activities include international treasury and fund management activities, corporate finance and advisory services, economic and investment research and analysis, and credit control and administration.

Interest payments to overseas banks and approved network companies are also exempt from WHT (Withholding taxes) where the funds borrowed are used for approved activities.

Debt Securities Incentives:

A package of tax concessions is available to various players in the Singapore bond market, including those involved in certain Islamic financing arrangements.

Insurance Business Development (IBD) Scheme:

The IBD scheme is an umbrella incentive for the insurance sector. Incentives offered under this scheme include a 10% concessionary tax rate for qualifying income of life, general, and composite insurers from carrying on insurance businesses from Singapore, and income derived from the provision of insurance broking and advisory services. This includes income from marine hull and liability insurance and captive insurance businesses.

Real Estate Investment Trusts (REITs):

Distributions made to foreign non-individual investors by a listed REIT out of rental income from Singapore real estate are subject to a reduced tax rate of 10%, subject to certain conditions being met.

Listed REITs investing in foreign properties can apply for tax exemption for certain foreign income received in Singapore. Distributions out of this income similarly are exempt.

Tax transparency treatment may be accorded for specified income of Singapore-listed REIT Exchange-Traded Funds (REIT-ETFs) so that there will be parity in tax treatment between investing in individual S-REITs and via REIT-ETFs with investments in S-REITs.

As a concession, Singapore-listed REITs are allowed to claim GST on expenses incurred for their business and for their special purpose vehicles, regardless of whether the REIT is eligible for GST registration, subject to a specified formula and certain conditions.

Islamic Financing Arrangements:

The income tax, stamp duty, and GST treatment of prescribed Islamic financing arrangements and Islamic debt securities (Sukuk) are aligned with that of the conventional financing contracts to which they are economically equivalent, subject to certain conditions.

Infrastructure Project Finance Incentives:

Tax exemption is available for income earned from qualifying investments in qualifying infrastructure projects/assets. Income from qualifying project debt securities is also exempt. FSI companies that provide project finance advisory services related to qualifying projects/assets may enjoy certain tax concessions for their qualifying income.

Sovereign Wealth Funds:

Tax exemption is available for income derived by a sovereign fund entity and an approved foreign government-owned entity from funds managed in Singapore.

Singapore Variable Capital Companies (VCC):

A VCC is treated as a company and a single entity for tax purposes. The tax exemptions for income from funds managed in Singapore and the existing GST remission for funds are extended to qualifying VCC. A 10% concessionary tax rate under FSI incentive for fund managers has been extended to approved fund managers managing an incentivised VCC.