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Singapore announces new tax incentives for Islamic finance

Date: 03 Feb 2006

Citywealth

Prime Minister and Minister for Finance Lee Hsien Loong announced several new tax incentives in his budget speech including measures to build up the depth and breadth of capital markets and to attract more Islamic Finance into Singapore.

Measures have been introduced to further encourage REITs listed in Singapore to help grow their pool of foreign assets. The REITs market in Singapore has seen steady growth in the last year. As at December 2005, there were seven listed REITs worth almost S$12 billion.

Singapore has developed

into a key regional hub in Asia for corporate HQ’s. To encourage more companies to review Singapore as a base, the Finance and Treasury Centres Incentive will be expanded to include derivative products.

In addition the government has improved the tax concession for captive insurance companies writing offshore risks.

Islamic financial products in Singapore.

They’ve also aligned the tax treatment of a wider range of Islamic Finance products with equivalent conventional financing contracts.

These changes, they say, will broaden the range of instruments available to regional and international investors.

These measures are effective immediately.

Exact details will be released by end of May 2006.

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