SINGAPORE Law and Practice Contributed by: Dorothy Marie Ng, Monica Yip, Tay Peng Cheng and Tan Shao Tong, WongPartnership LLP
chasing “residential property” as defined under the Residential Property Act 1976, there is no restriction on foreign investment in REITs. Listed Singapore REITs may qualify for tax trans - parency treatment on specified income dis - tributed if they distribute at least 90% of their specified taxable income (which refers to income that could be accorded the transparency treat - ment under Section 43(2A) of the Income Tax Act 1947). The taxation of distributions received by unit holders from REITs will depend on the type of distribution that they receive from the REIT and the specific circumstance of the unit holder. For example, individuals receiving REIT distributions that are granted the tax transpar - ency treatment are generally exempt from Sin - gapore income tax unless the individual derives the distribution through a partnership in Singa - pore or from the carrying on of a trade, business or profession. Resident corporate unit holders will generally be subject to tax on such distri - butions at the corporate tax rate of 17%, while non-resident corporate unit holders will gener - ally be subject to a final withholding tax rate of 10%. Distributions made out of income taxed on the trustee, out of non-taxable income/receipts or out of non-income should generally not be taxable. 5.4 Minimum Capital Requirement There is no minimum capital required to set up a Singapore company. However, if a company intends to obtain a licence under the Housing Developers (Control and Licensing) Act 1965, it has to comply with the minimum paid-up capital requirements. 5.5 Applicable Governance Requirements A company will have a sole director or a board of directors. The company must have at least one
director who is ordinarily resident in Singapore. The business of the company must be man - aged by the directors, or under their direction or supervision, and the directors may exercise all the powers of a company, except any power that the Companies Act 1967 or the constitution of the company requires the company to exercise in a general meeting. 5.6 Annual Entity Maintenance and Accounting Compliance Compliance costs will depend on the service provider(s) appointed. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Other than ownership of real estate, arrange - ments for the occupation and use of real estate include leases and licences. The law also rec - ognises easements that grant limited rights (eg, right of way) and profit à prendre , which allows the right holder to take or use something on the land, such as the cutting down and removal of timber. 6.2 Types of Commercial Leases Commercial leases can generally be divided according to their use – eg, office, retail and industrial leases. 6.3 Regulation of Rents or Lease Terms The terms of a lease (including rent) are freely negotiable between the parties. However, a set of guidelines – namely the Code of Conduct for Leasing of Retail Premises – has been made mandatory under legislation for lease agree - ments of retail premises that are entered into on or after 1 February 2024. The Code of Con -
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