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Fiduciary Services

­The demand for fiduciary services in Singapore has been rising constantly over recent years as the region has undergone significant development and now offers an economically, legally and politically safe and stable environment.

fiduciary_services_singaporeMore and more business-minded individuals realise the importance of protecting their assets and keeping them safe and secure. In the majority of cases, to achieve this and hold the property, a trust relationship is formed between two parties. Many local and foreign high net worth individuals are already utilising many advantages of Singapore's trusts and use them as a preferred vehicle for managing and protecting their wealth and assets.

Reasons to set up a trust:

Wealth Protection

The major advantage of private trusts is Wealth Protection. As the trustee has only legal rights, while the beneficiary retains the right of the ownership of assets. This helps to protect accumulated wealth against creditors, bankruptcy, exchange controls, hostile governmental authorities and other risks.

Confidentiality

The possibility of establishing a trust in offshore zone or privately, grants discretion and confidentiality to the beneficiaries.

Tax Savings

Setting up a trust in a low tax jurisdiction helps to minimise taxes and increase tax savings e.g. in Singapore there is no capital gains tax or estate duty tax. Foreign trusts also grant various exemptions from income tax including exemptions on certain types of income and its distribution to the beneficiary.

Singapore is continued to be selected by many wealthy individuals, who wish to set up trusts for their families. The reputation of a progressive international financial centre, business oriented environment and stable economic growth in Singapore will ensure that wealth management and trust industry continues its growth in upcoming years.

The simplest and most common form of trust is the bare trust. A bare trust is formed between a beneficiary and a trustee, and is such a form of trust, where the beneficiary has a complete and ultimate equitable ownership of any assets, capital and income of the trust and can claim his/her ownership at any time. The trustee has only a legal title to the property, which allows only management, control and administration of trust's assets. Moreover, trusts in Singapore can be set up privately and do not require formal registration, which offers the benefit of discretion and confidentiality to the beneficiary.

Below are listed some of other benefits that a trust framework can offer in Singapore:

  • Banking secrecy laws and stringent confidentiality

  • Protection from hiership claims

  • The beneficiary is entitled to reserve any or all the powers of asset management functions

  • Beneficiaries can appoint a protector to oversee the conduct of the trustees

  • No estate duty and no inheritance tax

  • No capital gains tax

  • Income tax relief for foreign trusts

One of the main challenges to address while setting up the trust is selecting the trustee, since he/she is in charge and holds responsibility for all assets within the trust on behalf of the beneficiary.

It is therefore important to select a person, who will:

  • Carry out the expressed terms of the trust instrument
  • Defend the trust
  • Prudently invest trust assets
  • Be impartial among beneficiaries
  • Account for actions and keep beneficiaries informed
  • Be loyal
  • Not delegate
  • Not profit
  • Not be in a conflict of interest position
  • Administer in the best interest of the beneficiaries

In recent years, there has been a significant spike in demand for independent trustees due to the increased regulatory complexity, conflicts of interests, governance and compliance changes, and inefficient financial management. In the past, a trustee was often a family member or well meaning amateur. Today, the trustee role is becoming more professional and technically demanding, requiring high levels of knowledge in order to ensure that the trust is maintained and operated efficiently.

In Singapore, trustees are regulated by statutory duties under the Trustees Act and trust companies are licensed and closely regulated by the Monetary Authority of Singapore under the Trust Companies Act 2005.

At Wellstead we can assist you with sourcing a perfect independent individual trustee, who will effectively manage the trust on your behalf, possess the required knowledge and experience and be compliant and up-to date with all recent changes in trust laws and legal system. Thus, you will receive a quality and efficient service tailored to suit your requirements, which will also address and deal with any legal aspects and concerns.

We can also help you to arrange a corporate entity as trustee.

This will allow you to have benefits such as:

Experience

A corporate trustee will often possess a vast amount of experience in managing trusts efficiently.

Objectivity

A corporate trustee will give you an objective opinion, which will not be biased and is free from family considerations.

Continuity

By choosing a corporate trustee instead of an individual, you gain additional confidence and minimise the risk of age and illness related issues, which helps to ensure continuity of the trust for the full term.

Prudence

A corporate trustee will help you to prudently distribute your assets as well as guarantee your privacy and deal respectfully with any of your financial matters.

Whichever option you choose or if you have additional questions, requirements or bespoke needs, Wellstead Corporate Solutions can assist you in an effective and professional manner. For fiduciary services Singapore, please do not hesitate to contact us with your enquiries.