One of the developed countries is Singapore. It is an attractive country, and many foreigners are actively moving there. The main industry is finance, and many Singaporeans are increasing their money through asset management.

So, how should a Singaporean resident or expatriate invest when considering increasing their money through investment?

Since Singapore has a developed financial system, there are superior insurance products available. However, compared to other countries, there are fewer excellent financial products for the general public than you might think due to strict regulations. Although the investment environment is good for professional investors, it is not suitable for amateur investors.

You need to understand these facts before managing your assets. I will explain how Singapore residents and expatriates should invest.

Singapore, a Tax Haven with a Low Tax Rate

There are offshore tax havens in the world where there are almost no taxes. Singapore is one of these tax havens and has a low tax rate. The corporate tax rate is up to 17%, and with various preferential policies, the actual corporate tax rate drops to less than half.

Also, as is the case with all tax havens, there is no capital gains tax. In other words, you will not be taxed on the money you make from trading stocks or other investments.

Many wealthy people consider moving to Singapore because it is a tax haven with an excellent tax system. In fact, there are so many cases of rich Americans, Chinese, Japanese, and Europeans who have moved to Singapore.

Since there is no capital gains tax, finance inevitably develops there. In almost all tax havens, finance is the main industry. This is also true for Singapore.

Offshore Life Insurance and Stock Investments Are Available

Because it is a tax haven, asset management in Singapore is superior compared to other developed countries. Some of the most common investment options in Singapore, for example, are the following.

  • Life insurance
  • Stock investment

Many people use life insurance in offshore regions to manage their assets. By depositing money with an insurance company, your assets can grow many times over. Life insurance is one of the lowest-risk investment products, and you are assured that your money will grow. In the case of life insurance, your money will increase at an annual interest rate of 4% with almost no risk.

Only residents of Singapore can buy life insurance in Singapore. While non-residents are not allowed to buy, Singapore residents and expatriates can purchase life insurance in Singapore.

They can also invest in stocks. As a tax haven, there are countless opportunities to invest in stocks. By using a Singapore brokerage firm, you will be able to invest in any country.

Singapore Has Inferior Offshore Investments, Except for Insurance

Unfortunately, it is not true that financial products in Singapore are the best. It is an offshore region, and there are many financial products that are superior to those of other developed countries, as mentioned above. However, when compared among tax haven countries, financial products in Singapore are inferior.

Usually, tax havens sell financial products to many foreigners. Naturally, foreigners include non-residents of the country.

On the other hand, in Singapore, as mentioned above, only residents of Singapore are allowed to purchase investment products. You need to be a resident of Singapore to open a bank account, purchase insurance products, or open a securities account.

Therefore, even though the financial industry is advanced in Singapore, it is based solely on domestic demand. It does not sell financial products widely to non-resident foreigners as most offshore regions do.

Because the market is so small, there are few good offshore investment products. The only good product is life insurance. In other words, except for life insurance, investment products are inferior in Singapore.

Singapore, an Offshore Region but Highly Regulated

Singapore is known as one of the most highly regulated tax-havens. Unlike other offshore regions, it does not have a collection of financial products from around the world.

This is not surprising since the financial services are only available to residents and expatriates of Singapore. For funds that exist all over the world, there is no point in registering in Singapore since there are strict regulations, and they can only target a small population of Singapore residents.

Also, if you want to use private banking in Singapore, you need to deposit at least US$3 million. Moreover, even though it is private banking, there is no asset management, and you cannot purchase excellent investment products in the world.

Most people who live in Singapore perceive that Singapore is an excellent country with a developed financial system. This is true, but the products are far inferior to those in other tax havens.

In fact, as I mentioned above, there are no excellent financial products other than life insurance in Singapore. For example, it is impossible to invest low amounts in hedge funds and aim for 20-30% annual interest. It is possible in other tax havens, but such investment products do not exist in Singapore.

Don’t Invest in Singapore Stocks

Some of you may be thinking of buying stocks in Singapore. Not only residents of Singapore, but anyone can invest in stocks, no matter where you are in the world. Among them, if you are a resident of Singapore, you may think of buying shares of a Singaporean company.

However, you should not. The reason is simple: the stock market in Singapore is not growing at all. It is true that Singapore is a developed country and has grown at a high rate. However, in terms of stocks, there is a high probability of failure if you invest.

For your reference, below is a chart of the Singapore ST Index (Singapore’s leading stock index) for 10 years.

As you can see, the stock price has not increased at all in 10 years. With this fact in mind, you can understand why investing in Singapore stocks is likely to fail. There is no problem if you are a professional investor, but your investment will almost certainly fail if you are an amateur investor.

Instead of investing in Singapore stocks or REITs (real estate), you should invest in US stocks. Even in the same 10-year period, US stocks have more than tripled in value (in the case of the S&P 500). In any case, do not buy Singapore stocks.

Hedge Funds Exist, But Not Easy to Invest in

In terms of financial products, Singapore is not attractive to amateur investors. While life insurance is excellent, there are no other good financial products to invest in. Also, investing in stocks is possible in any country, not just in Singapore.

Of course, there are hedge funds in Singapore, a low-tax country.

It is difficult to invest in these hedge funds directly, and you usually have to open an offshore account to invest in the funds. However, in Singapore, it is impossible to open an offshore account for the general public to invest in hedge funds.

-If You Invest Outside Singapore, You Can Earn High Yields

On the other hand, investment products that are sold in other offshore regions can provide excellent yields.

For your reference, I have been investing in offshore funds through a Cayman Islands-based financial institution. The Cayman Islands is one of the most famous tax-havens. The following is my actual management screen.

Thus, I have diversified my investments into 10 funds, and the average annual yield over the past 5 years is 24.1%.

In Singapore, even though it is a tax haven, it is not possible to invest in excellent funds worldwide due to financial regulations. Therefore, it is almost impossible to generate this kind of yield. On the other hand, if you invest in other tax havens, it is possible.

Investing Abroad in Other Tax Havens Can Make You More Money

Residents and expatriates in Singapore need to think about investing overseas. It is true that there are many financial products that are superior to those in developed countries, such as Japan, Germany, and France. You can also send money overseas at any time.

However, even if there are excellent financial products, they are limited to life insurance. Also, life insurance generally has an annual interest rate of about 4%, so there are no investment products in Singapore that can provide excellent asset management with an annual interest rate of more than 10%. If you invest in stocks, it is possible to earn more than 10% per year, but only professional investors can achieve this.

Therefore, amateur investors need to consider investing abroad in other tax havens to manage their assets efficiently. In fact, the more knowledgeable Singaporeans are, the more they invest in other tax havens to increase their assets.

When thinking about asset management in Singapore, understand that there are no good financial products in Singapore other than life insurance. Especially if you want to earn more than 10% annual interest, you need to invest overseas in other tax havens.