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Digital Assets Estate Planning Latest Popular Trust & Wills

Handling Digital Assets In Estate Planning – An Introduction

Handling Digital Assets in Estate Planning – An Introduction
Handling Handling Digital Assets In Estate Planning – An Introduction

People generally do not plan how they want to distribute their digital assets to their loved ones after they die. Such considerations are a sign of the times, having only emerged in the last two decades. They have accelerated in recent years with the exponential growth of social media, online shopping and online banking, and all their associated apps. By the same token, administering digital assets is also a relatively new area for estate planners.

As a simple example of complications that can arise from digital legacies, let’s say some of your loved ones may want your Facebook account to remain active after you are gone, while others might want to delete the account for closure.

It should be noted that when Facebook is made aware that a person has died, its policy is to memorialise the account. Memorialising is a way for family and friends to gather and share memories after a person has died and keeps the account secure by preventing anyone from logging into it. Only Facebook friends or family members can request a profile to be memorialised. However, people can also choose to have their Facebook accounts deleted after they die.

Now, if you do not indicate what you want done with your Facebook account in the event of your death, such an omission could lead to unnecessary disputes. This is something that should be addressed beforehand in your estate planning. In fact, the more planning you can do for the treatment and distribution of your digital assets, the easier it is for your loved ones to deal with your overall estate after you are gone.

Types of digital assets 

As technology advances and people live more and more of their lives online, their digital assets are likely to grow. Current examples of a person’s digital assets include

  • Online accounts – bank accounts, payment accounts, e-wallet, e-commerce accounts, investments, personal email accounts, gaming and cryptocurrency accounts
  • Social media accounts – Facebook, Twitter, Instagram and LinkedIn accounts
  • Reward programmes – airline miles, hotel credits
  • Personal data – photographs, electronic books, music or videos in computer or kept on a cloud service
  • Others – domain names, blogs, websites, cloud storage accounts like Dropbox or Google Drivers or online business sites.

This is already quite a comprehensive list. With this in mind, it is clear that more attention has to be paid to end-of-life digital asset preparation. People can’t put this off for too long. One solution may be to corral your digital assets into easy-to-access locations. Identifying this potential trend, former Google executives Daniel Sieberg and Rikard Steiber have teamed up to tackle the problem, partly as a response to the uncertainties about the future in the wake of the Covid-19 pandemic.

Along with writing a book published in 2020 titled Digital Legacy: Take Control of Your Digital Afterlife, Sieberg and Steiber have launched a website in the U.S. called GoodTrust. The company securely stores and manages people’s digital depository of documents, social media accounts and websites, delivering them to specific people that a person has cited, before or after they die.

To date, there are no prominent equivalents to this service in our region, but it won’t be long before such services start sprouting. The corralling of digital assets into a small number of specified locations will certainly be helpful for estate planning purposes.


Note: In our next article, we delve into how to deal with your digital legacy.

 

Categories
Estate Planning Succession Planning Wealth Management

Addressing Ultra High Net-Worth Wealth Planning Needs

Addressing Ultra High Net-Worth Wealth Planning Needs
Addressing Ultra High Net-Worth Wealth Planning Needs

Kimmis Pun is the Managing Director, Family Office, Shenning Investments Pte Ltd. Prior to this appointment, she had been in senior management positions at UBS, HSBC, Bank of America, BNP Paribas, Standard Chartered Bank, VP Bank and EFG Bank.

With her all-rounded financial experience in Corporate/Investment Banking, Trustee Company and Private Banking at the top banks, she serves Ultra HNWIs in the region and is instrumental in their wealth planning, investment planning and succession planning.

She has MBA from Manchester Business School, University of Manchester, and professional qualifications CFP®, ChFC, CWMA, AIF, AEPP® and IBFA. She is also the IBF Fellow awarded by IBF Singapore.

Besides being successful in her career, Kimmis plays a significant role in the financial planning and wealth planning industry. She is the Board of Director of the US-based Financial Planning Standard Board after her 4-year presidency in Financial Planning Association of Singapore. She is also the Chairman of Wealth Planning Standard Board that makes research and promotes wealth structuring and planning.

Being a strong believer in philanthropy and life- long learning, she speaks frequently in various international seminars and conventions, gives interviews to media and lectures in 3 Singapore universities and many regional universities for the past 15 years..

EPPL: I understand that you have recently joined Shenning Investments’ family office in December. Can you tell us more about your role?

K: Shenning Investments Pte Ltd is a private equity fund manager specialising in Wealth Management and Private Equity investments. Shenning set up a Variable Capital Company (VCC) as a platform to help UHNWIs with their family offices and funds. I am currently leading Shenning’s family office outfit and offer well- architected solutions to suit the needs of the UHNWIs and rich families. The family office investment teams will help the UHNWIs and rich families manage their global investments and structure their family wealth and succession plans.

EPPL: What are your plans in your new role?

K: Professionally managed family offices and dedicated family funds would be a trend for the HNWIs in the next decade. Riding on the fast-evolving trend of succession planning among the riches, Shenning would further build up its family office team over the next 12 months.

My role is to expand Shenning’s family office into a multi-family office in the coming years and use the family trusts and VCC solutions to help clients do their succession planning and global investments.

EPPL: What exactly is VCC Framework?

K: A VCC is a legal entity specifically for investment funds that can be used for traditional and alternative strategies, both on an open-ended and closed-ended basis.

The Shenning VCC is designed to provide cost- effective, customized wealth management and investment services for investors.

A VCC must be managed by a Singapore fund manager that is regulated by the Monetary Authority of Singapore.  

EPPL: How does VCC help UHNWI do succession planning?

K: Being a global financial centre with a favourable tax system and political stability, Singapore is considered one of the best jurisdictions for the set up and maintenance of the family-office for the UHNWIs and rich families.

With the government tax incentives, VCC is a compelling structure to hold the family assets of the UHNWIs and the rich families for aggregate management by a licensed fund manager.

Combined with other legacy planning tools such as family trust, the family members can enjoy all the economic benefits of the professionally managed family assets as desired by the patriarch or matriarch of the family, with high confidentiality and flexibility.

This would also broaden the network with other regional UHNWIs and rich families in getting into various well-chosen investment projects or prestige funds.

 

This article was first published in our newsletter, The Custodian Issue 16 on February, 2021. Click here to access our latest newsletter.  

Categories
Estate Planning Latest Popular Trust & Wills

6 Common Mistakes when Writing Wills, Plus One Big One

Common Mistakes when writing wills plus one big one
6 Common Mistakes when Writing Wills, Plus One Big One

Writing a will is not rocket science, but many people argue that a will is the most important document in your life. However, even if you have written a will, your loved ones might be in for a shock if you have inadvertently made a mistake in your will.

Unfortunately, mistakes are typically only discovered after you have died. This means that your loved ones will have to sort out any mess that a mistake creates. Here are some of the common mistakes that arise in wills:

  1. Not keeping the original copy of your will safe — When you die, your executors will need your original will to legally administer your estate – not just a photocopy. Without the original, it will be difficult for your executor to obtain a grant of probate to manage your affairs.
  2. You find that your will is out of date because of a life-changing event — You may have not updated a new birth in your family or one of your loved ones getting divorced or dying before you. Or perhaps you have not included your new apartment in your will. Such omissions could lead to challenges to the contents of your will.
  3. Not dealing adequately with beneficiaries of assets that are not controlled by the will – Assets like life insurance policies, pensions and bank accounts are set up to pass directly to the named beneficiary. A person may need to take advice on how assets not controlled by a will should be treated.
  4. Failure to anticipate the death of beneficiaries or executor — It’s important to name alternate beneficiaries, or an alternative executor, in case any of these individuals die before you. You should also name more than one executor when you write your will.
  5. Forgetting assets to include in your will – People tend to forget about intangible assets such as bank accounts, bonds, shares and so on.
  6. Thinking it is easy to make changes to your will – It is not as simple just adding some new lines of text to your will. To make changes to an existing will you will have to make an official alteration called a codicil, or you can alternatively make a new will. A codicil must be signed and witnessed in the same way as a will.

These are just some of the mistakes that we see when people write their wills. However, we would argue that the biggest mistake is not writing a will in the first place. Because if you die, this means that you have died intestate. Intestacy is the condition of the estate of a person who dies without having made a valid will.

It follows a set of rules laid down by law which stipulate how the estate is to be administered if there is no will. In later articles in our series, we will look more deeply at the rules of intestacy. For now, it is sufficient to say that intestacy could ultimately result in assets not being distributed to your loved ones in the way you intended.


Note: In our next article, we look at how you can deal with your digital footprint in your will. 

Categories
Estate Administration Estate Planning Latest Legal Popular

Estate Administration for Insolvent Estates

Estate Administration for Insolvent Estates
Estate Administration for Insolvent Estates

A person’s debts do not cease to exist with death. Although family members are generally not personally responsible for the debts, the rules of bankruptcy apply to insolvent estates and creditors must be paid through the funds in the estate. An insolvent estate happens when the debts of the deceased are greater than the total value of assets. 

There are various types of debts and it includes outstanding credit card debts, loans and taxes. Debts account for a significant component in the estate  administration. Precepts Trustee Ltd is a licensed trust company that administers estates. With over a decade of experience, we have handled a variety of estates with varying complexities and involving litigation. 

Let’s take a look at a real-life example from one case handled by Precepts Trustee Ltd.

This case unfolded with Robert’s call to Precepts looking for help. In the call, Robert* informed us that he had been appointed as the sole executor and trustee of his late mother’s Will. According to Robert, his mother did not appoint any other executor, since Robert was the sole beneficiary. However, he wanted to renounce his right to apply for the Grant of Probate. He wanted Precepts to take over his role in administering his late mother’s estate as he was facing a lot of stress and anxiety in the estate administration.

As the Will was not drafted by Precepts, we held a meeting with Robert to better understand the situation. He disclosed that his businesswoman mother had encountered some financial difficulties just before her passing. As a result, his mother had left huge liabilities behind. After studying the case, Precepts tabulated that her estate’s liabilities were projected to be greater than the remaining assets of the estate.

Ever since the creditors discovered he was the named Executor of the Estate, they started going after Robert to demand for re-payment of his mother’s debts. He received numerous calls from various banks’ collection departments almost every single day. He was also informed by the banks that late payment for his mother’s credit card debts and the legal fees would continue to accrue until full settlement!

He also realized that he would unlikely benefit from the Will as his mother’s estate was insolvent. He had no peace of mind. He was very concerned that the property which was owned in his name (he purchased with his own money together with his wife), could be taken away by the creditors. He was so pressured that he started to believe he had to sell his own house to settle the debts.

After Precepts was appointed to act as the administrator, the creditors started to deal with Precepts, and not Robert. The phone calls to Robert ended over time. It had been a long process for Precepts to deal with the banks and to meticulously verify each of the creditors’ claims. It was something Robert had not been able to do so. The estate also received claims from the Inland Revenue Authority of Singapore (IRAS). After Robert’s mother’s house was sold, the net sale proceeds were used to first settle the IRAS claim before the balance debts and liabilities were paid proportionally to the respective claims admitted by Precepts.

Robert was also relieved to find out that he could claim the money which he had advanced for his mother’s funeral expenses (with supporting documents), as this claim had priority before the rest of the creditors.

After Robert relinquished his right and appointed Precepts as the administrator of his mother’s estate, he and his wife were able to resume their lives normally again.

 

 

Estate Administration for Insolvent Estates case illustration

This article was first published in our newsletter, The Custodian Issue 16 on February, 2021. Click here to access our latest newsletter. 

Categories
Estate Planning Popular Succession Planning Trust & Wills

Impact of ABSD on Property Succession Planning

Impact of ABSD on property succession planning
Impact of ABSD on Property Succession Planning

ABSD is Additional Buyer’s Stamp Duty. This is introduced as part of property cooling measures to cool the hot property market since 2011. This only applies to residential properties. 

There are other measures such as Seller’s Stamp Duty (SSD), changes to Loan to Value, etc. In order to promote prudent lending and borrowing, there is the TDSR (Total Debt Servicing Ratio) Framework introduced in 2013. 

Property owners and investors are mindful on the ABSD when they are planning on their next property purchase. 

In this article, we are focusing on the impact of ABSD upon the death of property owners. 

For example, do the beneficiaries need to pay ABSD to inherit properties if they already owned property on their own? 

If it is direct inheritance, whether with or without a Will, no Buyer’s Stamp Duty (BSD) and ABSD will be applicable. 

As an illustration, Mr Tan is a widower who had 3 children. He died without a Will and his property will be inherited equally by his 3 children. All his children already have their own property. In this case, the children can inherit the property without any BSD and ABSD. 

They would now have 2 properties count under them respectively. This will add on to their ABSD liability if they want to buy additional property. 

However, if the 2 children want to sell their share to their eldest brother, he will have to pay ABSD to buy over their share since he already had 1 property. 

This may not be an ideal situation as additional tax need to be paid. Mr. Tan could have saved his children the hassle and cost by making property succession planning. Mr. Tan can determine which of his children will need the property most and bequest to him. He can then bequest cash to the other children. He can create the estate through insurance policy. His children will be grateful for such legacy. 

There are also other considerations such as Seller’s Stamp Duty (SSD) and TDSR. 

Singapore has high property ownerships and property owners need to plan on their property succession as their legacy planning. 

 

This article was first published in our newsletter, The Custodian Issue 16 on February, 2021. Click here to access our latest newsletter. 

Categories
Estate Planning Latest Legal Trust & Wills

Taking that First Step Towards Writing a Will is the Hardest

Taking that First Step Towards Writing a Will is the Hardest
Taking that First Step Towards Writing a Will is the Hardest

The biggest stumbling block to writing a will is taking that first step to face the fact that we all die someday. It is not easy for people, especially those who are younger, to wrap their heads around that idea. This causes them to procrastinate about doing up a will, or put it off completely.

However, if people can get past this mental hurdle, the subsequent path is well-trodden and easy to negotiate. There has to be a recognition that a will, essentially, provides instructions on how your assets are to be distributed according to your wishes after you are dead. It doesn’t mean that you are going to die tomorrow. And importantly, you are not writing a will for yourself, but for your loved ones.

In theory, anyone can write his or her will on a piece of paper. As long as it is signed and witnessed by two independent adult witnesses, it should be legally binding. This would ostensibly be the easiest path for an individual to pursue if, for example, you are married with no children and want to leave everything to your spouse. It is the simplest type of will.

But before you rush off to find that piece of paper and pen to get started on writing that will, there are some serious questions that need to be considered which can apply to anyone. 

For example, what happens if you own property overseas, or have foreign investments and bank accounts? Are the laws relating to inheritance the same in those countries compared to your own country? What are the tax ramifications? Another common question that arises is if you have people who are financially dependent on you other than your immediate family? How do you ensure that they are taken care of after you are gone? 

Such questions or scenarios make writing a will more complex than it would appear at first. It is thus advisable to seek professional guidance to ensure that everything is above board and your instructions are crystal-clear in the event of death. Even a seemingly straightforward issue such as wording a will to make it unambiguous requires someone with experience to tell you what works and what doesn’t. Remember that a badly worded can be challenged in court.

We reiterate that it is best retain the services of professional such as an estate planner and lawyer to help you. Their experience will help you identify potential problem areas and find solutions for them. There are typically three basic steps to writing a will:

1) Name your beneficiaries – Who gets what

2) Name your executor – The person who makes sure your assets are distributed according to your wishes

3) Get your will witnessed – Your witnesses have to be adults and not named as beneficiaries 

 
  1. Name your beneficiaries – Who gets what

  1. Name your executor  The person who makes sure your assets are distributed according to your wishes

  1. Get your will witnessed  Your witnesses have to be adults and not be named as beneficiaries 

Parents who have minor children who are still minors may need to take the additional step of naming a guardian for them in the event of their death. If you are married, the guardian will probably be your spouse. If you are divorced, it will probably be your ex-spouse. If you do not have a spouse or your ex-spouse is not an option, then you have got some thinking to do.

Note: In our next article, we look at some of the common mistakes that are made when writing a will

Categories
Estate Planning Legal Succession Planning Trust & Wills

Professional Deputies and Donees

Professional Deputies and Donees
Professional Deputies and Donees

With the aging population in Singapore, there is a rising concern for risk of lack of mental incapacity due to illness and old age. The Mental Capacity Act came into effect in 2010 and it has laid down the principles of what is mental capcity and what may cause the loss of mental capacity.  

The framework for the appointment of professional deputy and donee, their duty and responsibility were also defined and regulated under the said Act. The Office of the Public Guardian (OPG) under the Ministry of Social and Family Development (MSF) was established to carry out functions such as maintenance of registers of deputies, Lasting Power of Attorney (“LPA”), and supervisory role over deputies and donees. One can now make an LPA to appoint person(s) to act as their donee(s). The maker of the LPA commonly referred to as the Donor. 

However, there remains a concern for individuals who may not have family members or close friends who can be their decision makers (i.e. to be their deputy or donee). The Mental Capacity (Registration of Professional Deputies) Regulations 2018 (the “2018 Regulation”) came into effect on 1 September 2018, allowing professional deputies to act for persons who lose mental capacity for remuneration.  

The Professional Deputies and Donees (PDD) scheme, set up by the MSF, aims to help individuals, in particular single elderly or childless elderly couples, who may not have family members or close friends to rely on to be their proxy decision makers. Under the PDD scheme, eligible classes of professionals such as lawyers, accountants, nurses, and social workers can register and certify themselves to be PDD. PDDs are supervised and regulated by the OPG.

Professionals from TOUCH Community Services are some of the pioneers who are qualified to provide the PDD service. TOUCH is a Social Service Agency and a member of the National Council of Social Service. TOUCH’s team of professionals are registered social workers who are experienced in providing care to the elderly and people with special needs. With close to 30 years of experience serving the community, TOUCH can leverage its expertise to address issues on the ground and explore best care options for the individual.   

Donors who are interested can now approach TOUCH to appoint a Professional Donee to handle their personal welfare and/or property and affairs matters. Under the PDD scheme, only individual PDD from TOUCH can be appointed. To ensure continuity and reliability of services to the Donor, TOUCH will appoint the main and replacement Donee. All PDDs also come under the supervision of the OPG with safeguards in place. 

Visit TOUCH website for more details or email [email protected].

 

This article was first published on our newsletter, The Custodian Issue 16 on February, 2021. Click here to access our latest newsletter.

 

Categories
Business Estate Planning Legal Popular Succession Planning Trust & Wills Wealth Management

Estate Planning and Wealth Succession Asia Forum 2020

Estate Planning and Wealth Succession Asia Forum 2020
Estate Planning and Wealth Succession Asia Forum 2020

Against the backdrop of Singapore under Phase 2 of Covid-19, PreceptsGroup International hosted guests and speakers at Sofitel Singapore City Centre for our Inaugural Estate Planning and Wealth Succession Forum on 26 and 27 October 2020. During the 2-day conference, 17 topics specializing on issues specializing on issues surrounding estate planning and wealth succession were shared by 41 speakers from a regional and global perspectives.

As one of the first physical events in Singapore approved by the various relevant authorities, safe management measures were in place to comply with Safe Business Events (SBE) framework and to ensure the safety and well-being of all participants, trainers and staff. The event was attended by 90 people in physical attendance and another 120 people via live streaming. 

This two-day Estate Planning and Wealth Succession Asia Forum 2020 is for a professional audience and centers around issues faced by modern Asian families grappling with the multi-faceted aspects of legacy and succession planning. With billions of wealth assets expected to be transferred to the next generation in the next few decades, participants heard from our esteemed keynote speakers and engaged with industry veterans and international estate planning gurus who shared the latest trends, developments and solutions that clients need to embrace. The forum also focuses on second generation wealth succession, family offices, private trust companies, cross-border assets planning, dealing with inheritable wealth taxes, tax residences, mental incapacity and special needs planning, philanthropy and many more topics. 

Hear it from our participants!

“The content and panelists invited are truly good! Never regret signing up for this EP forum. Would love to join again. The EP Forum was extremely well organised with adequate safe distancing measures arranged, and most importantly, the panel invited comprised of most of the heavyweights in the industry.”                            

Sharon Cheng

 

“I have better understanding and practical tips on estate and succession planning, plus building philanthropy as part of the planning. I enjoyed Ms Chalire Chian’s sharing which gave me a very deep impression on an Entrepreneur leaving legacies in an open communicated way that involved the next generation according to their strengths of which I can share and better assist my client in their succession planning.”                                                                                                                            

Veronica Yip

  

 

Speakers of the Estate Planning and Wealth Succession Forum 2020

Ms. Claire Chiang | Co-founder, Banyan Tree Hotels & Resorts

Mr. Toh Soon Huat | Executive Chairman, Novena Foundation Pte Ltd; Sian Chay Medical Institution (full  time  volunteering)

Mr. Lee Chiwi | CEO, PreceptsGroup International

Mr. Mark Smallwood | Trust and Estate Practitioner (TEP), Owner, Rapier Consulting   Ltd

Mr. Josh Maxwell (Americas) | Partner, Hone Maxwell LLP

Mr. Gurdeep Singh (Middle East) | Group Tax Consultant, Sovereign Wealth Company with 200 subsidiaries worldwide, GCC Government

Mr. Peter Wyllie (New Zealand) | Director/Shareholder, Helmores Wealth Limited

Ms. Julie Teo [Moderator] | Consultant

Mr. Tan Woon Hum | Partner, Shook Lin & Bok LLP

Mr. Wong Look-Liew | Chief Investment Officer, Hammer Global Investments Pte   Ltd

Mr. Johan Jooste |  Managing  Director,  The  Global  CIO  Office

Mr. Ku Swee Yong | CEO, International Property Advisor Pte Ltd

Mr. Kendrick Lee | Managing Partner, Raffles Family Office

Ms. Angela R Wong | Partner, James Chai & Partners

Ms. Kim Faulkner | CEO, Activiste Pte Ltd

Ms. Kee Lay Lian | Partner, Rajah & Tann Singapore LLP

Mr. Luke Lim | Executive Director, Phillip Securities Pte Ltd

Mr. Alfred Chia | Chief Executive Officer, SingCapital Pte Ltd, FPAS President

Mr. James Foo | Director and Consultant, Charles Monat Associates Pte Ltd

Ms. Lorna Tan | Head of Financial Planning Literacy, DBS Bank Ltd

En. Azhar Iskandar Hew | CEO, Rockwills Malaysia Sdn Bhd

Ms. Chee Pei Pei | Executive Director, Deloitte Tax Services Sdn Bhd, Malaysia.

Mr. Mike Grover | External Consultant, Labuan International Business and Financial Centre Inc Sdn Bhd

Mr. Ng Chee Yuan | Founder and CEO, Shenning Investments Pte Ltd

Mr. Petrus Huang | Co-Head,  Investment  Funds Director,  Corporate  & Finance,  Drew & Napier

Ibu Henrietta Kristanto | Managing Partner, PB Taxand Taxand Indonesia

Mr. Alan Wong | Principal Consultant, W3 Consultancy Pte Ltd

Mr. Leong Mun Kid | Resident Manager, Precepts Trustee Ltd

Ms. Lie Chin Chin [Moderator] | Managing Director, Characterist LLC

Mr. Sammy Hui (Hong Kong) | Regional Director, FWD Life Insurance Company Ltd

Mr. Martin Crawford | Co-founder & CEO, Acclime

Mr. Geoffrey Lee (Taiwan) | Founder & Principal Attorney, Legato Law, California

Ms. Esther Fung [Moderator] | HOD, Private Clients, PreceptsGroup International

Mr. Geoffrey Lee | US Attorney Founder & Principal Attorney, Legato Law, California

Mr. Michael Liu | Managing Director, CIL Group Ltd Trust and Estate Practitioner (TEP), Board Director of AOA (Asia  Offshore  Association),  Rep  of  Northwest  Trustee  in  Asia,  Founder  of  Threshing   Floor

Mr. James Zhang Jun |  CEO  and  Founder,  Beijing  Financial  Alliance  Technology (BFAT)

Ms. Kimmis Pun | Board of Director, Financial Planning Standard Board USA

Mr. Chong Yue-En | Managing Director, Bethel Chambers LLC

Ms. Jane Binks | Senior Director, Development, Yale-NUS College

Dr. Titus Yu | Chairman and CEO, Wizard Financial Group Ltd

Mr. Robert Kee | Executive Chairman, Operation Hope  Foundation

 

This article was first published on our newsletter, The Custodian Issue 16 on February, 2021. Click here to access our latest newsletter.

 

Categories
Business Latest Succession Planning Wealth Management

A Complete Guide to Incorporating a Company in Singapore

A Complete Guide to Incorporating a Company in Singapore

Ranked in the world as the second-best nation in the world to do business, Singapore is a land of lucrative opportunities for investment. Let Precepts Corporate Services guide you, step by step, on how to incorporate your own business in Singapore. 

Who can Incorporate in Singapore:

Provided you meet the required criteria, anyone can register a company in Singapore with relative ease. If you are a foreign investor, you will need to use a registered Singapore company incorporation, such as Precepts Corporate services to comply with the Singapore Accounting and Corporate Regulatory Authority (ACRA).

Incorporating a Company in Singapore as a Foreign Individual

A Foreign Individual requires a local Singapore resident as a director to comply with ACRA. However, after you have incorporated your business in Singapore, you can own 100% of the company shares, while being a foreign director.

In order to proceed, the due diligence documents required will be:

• Copy of your passport
• Residential proof of overseas address
• Business profile

Incorporating in Singapore as an Existing Foreign Corporation

A foreign company may also incorporate a company as a subsidiary, representative office, or bank office. The documents required to incorporate the company would be:

• Copy of Certificate of Incorporation of the Parent company
• Extract from Registrar of Company or Register of Members and Directors
• Memorandum and Articles of Association/ Constitution/By-Laws

What to Do After Your Company Has Been Registered in Singapore

If you have done everything correctly, you will be allowed to do business officially in Singapore straight away. There are however a few extra things you will want to do in the following days and weeks:

• Apply for any business licences you might need, e.g. medicine, law, etc.
• Open a corporate bank account.
• Register for Singapore Goods and Services Tax (GST).
• Register with Singapore Customs if you are an importer or exporter
• Put your ACRA registration number on all letterheads, invoices and other official collateral.
• Apply for any Singapore work visas needed by you or your foreign team members.
• Make sure you stay in compliance with ACRA. 

At Precepts Corporate Services, we can assist you in all the above, whether it be introducing you to a few bank managers, or taking care of your tax compliance. We have given you as much information as possible in this article. If you have any questions about incorporating your company in Singapore, contact us at +65 6221 8633 or [email protected].

This article was first published on our newsletter, The Custodian Issue 17 on April, 2021. Click here to access our latest newsletter.

Categories
Business Estate Planning Latest Legal

Tax Updates For Indonesian Citizens Living Abroad

Tax updates for Indonesian Citizens living abroad
Tax Updates For Indonesian Citizens Living Abroad

Determining Income Tax has become a major concern for Indonesian citizens living abroad. Their failure to understand cross- border taxes will have a detrimental effect on their family’s global financial plan. The 2008 Income Tax Law does not adequately explain the determination, whether they  are domestic tax subjects, foreign tax subjects or both.

The new Omnibus Law Tax Law No. 11/2020 was launched in November 2020 to replace the 2008 Income Tax Law. One of the important key changes is the Territorial System Approach to replace the Worldwide System.

For its derivative regulations, the Minister of Finance Regulation No.18/PMK.03/ 2021, which was launched in early March 2021, includes, among other things, requirements for individual Indonesian citizens who live outside of Indonesia for more than 183 days within a period of 12 months to obtain foreign tax subject status. 

For this purpose, they are required to get a “Certificate of Indonesian Citizens Who Meet the Requirements to Become Foreign Tax Subjects” issued by the Head of the Indonesian Tax Office.

The main requirement for processing the certificate is that the Indonesian citizen has been domiciled outside of Indonesia for more than 183 days within a period of 12 months and fulfills the following requirements:

  1. Residing permanently in a place outside of Indonesia that is not a transit domicile.
  2. Has a main activity center that shows personal, economic, and/ or social ties outside of Indonesia, which can be proven by husband/ wife/ child domiciled outside the jurisdiction of Indonesia, source of income from outside of Indonesia and is a member of religious, educational, social and/ or social organizations recognized by its government.
  3. Having a place to carry out daily habits or activities outside of Indonesia.

Requirements 1 to 3 are examined in stages. In the event that the Indonesian citizen meets the requirement for residence outside of Indonesia and no longer resides in Indonesia, it is not necessary to continue the fulfillment of the requirements in point 2 and 3. If the Indonesian citizen meets the requirements of residence outside of Indonesia and at the same time also resides in Indonesia, then proceed to the requirement in point 2.

If the Indonesian citizen meets the main activity center requirements outside of Indonesia and there is no main activity center in Indonesia, then there is no need to proceed to the requirement in point 3.

Other 2 requirements that must be met:

  1. The Indonesian citizens are tax subjects from other countries or jurisdictions proven by permanent resident documents such as Certificate of Domicile.
  2. The Indonesia citizens have completed taxation obligations on all income received or earned while the Indonesian Citizen is a domestic tax subject.

Indonesian citizens holding a “Certificate of Indonesian Citizens Who Meets the Requirements to Become Foreign Tax Subjects” do not receive or accrue income originating from Indonesia, are not subject to Indonesian income tax anymore. If they receive or accrue any income originating from Indonesia, that income is subject to income tax in accordance with the provisions of Indonesian regulations applicable to foreign tax subjects.

For more detail information, please contact your Tax Advisor.

This article was first published on our newsletter, The Custodian Issue 17 on April, 2021. Click here to access our latest newsletter.