More Swiss banks may be looking to Singapore as a favourable place for expansion.
Numerous Swiss banks and European banks set up operations in Singapore in the last five years, due to a growing trend towards transparency in various jurisdictions, said Mr Edmund Leow, a principal at law firm Baker & McKenzie.Wong & Leow.
"This creates a lot of confidentiality issues, and therefore some EU citizens have been looking for alternative locations where they can park their cash. Singapore was seen as one of the alternative jurisdictions," added Mr Leow.
In general, if a citizen from an EU state opens a bank account in another EU state, there would be an automatic exchange of information, whereby the recipient country will automatically disclose that information to the taxpayer's home country.
Furthermore, the US has filed fraud and conspiracy charges against Switzerland's oldest bank, Wegelin & Co, alleging it helped wealthy Americans hide more than US$1.2 billion in secret accounts abroad.
Singapore has about 30 exchange of information agreements with tax authorities of various countries. Still, client confidentiality has to be maintained.
While it is in everyone's interest to prevent tax evaders from making use of Singapore, "we have our banking secrecy laws in place", said Ernst & Young financial services tax partner Chong Lee Siang.
It is important that any exchange of information does not become "fishing expeditions by the foreign tax authorities", Mrs Chong said. "They have to be justifiable cases. They have to be well-supported."
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