Page 12 - Building a Treasury Centre for Sustainable Growth

Legal & Regulatory

Environment in Singapore

Apart from attractive tax incentives, a conducive legal environment
for foreign exchange, payment systems, and setting up a business
entity play a part in attracting global corporations to set up their
regional treasury centres (RTCs) in a location. In addition, a robust
and well-regulated financial system that supports innovation and
offers a wide array of risk management options for investors are
elements of an ideal RTC location. Below is a brief description
of the legal and regulatory regimes in Singapore that help it to
establish itself as a popular RTC location in Asia.

Financial and Treasury Centre (FTC)
Incentive
The Singapore Economic Development
Board (EDB) has a RTC incentive scheme
(which is FTC) to encourage companies
to grow their treasury management
capabilities. An approved FTC company
enjoys reduced corporate tax rate of 8 per
cent on income derived from qualifying
FTC services to approved network
companies. To qualify for FTC incentives,
companies must establish substantive
activities in Singapore and perform strategic
functions. Substantive activities and
strategic functions include control over the
management of cash and liquidity positions,
provision of corporate finance advisory
services, management of interest rate,
foreign exchange, liquidity and credit risks,
as well as overall business planning, and
investment research and analysis.

10 Building a Treasury Centre for Sustainable Growth