Singapore Becomes New Source of Investment

Kegler Brown Global Business News

As of June, Singapore is the top city-state for foreign direct investment (FDI) into India, replacing Mauritius. It now accounts for approximately 25 percent of inflows, according to the Times of India.

Singapore attracted $5.98 billion into India during the last year alone and experts believe the Double Taxation Avoidance Agreement (DTAA) that incorporates a clause, Limit-of-Benefit (LoB), has provided more relief and security for foreign investors.

Traits foreign investors look for in an offshore jurisdiction are certainty, predictability and acceptability by law. Singapore has all those to offer for investments. The tax treaty between the two countries provides clear guidelines with respect to what would be considered as "substance" for a company in Singapore to avail tax treaty benefits with respect to repatriation of its income from India. The Singapore-India treaty is a good example of how offshore investments can be successful within the ambit of law.