Overview

Singapore is a financial hub with a reputation for attracting international business as a result of a highly-regarded and transparent regulatory regime, tax incentive schemes, and innovative investment structures such as the business trust. This briefing by Norton Rose examines the business trust.

The business trust structure is designed to give investors direct exposure to cash flow generating assets through the purchase of units which are tradable on the Singapore Stock Exchange (SGX).

Benefits of this structure include the ability to declare distributions out of operating cash flows and the lack of restrictions on gearing. When this structure is used in conjunction with the various tax incentive schemes available to participants in the shipping and infrastructure sectors, the tax savings (both for investors and for sponsors of business trusts) can be significant, especially when compared to the structures and tax regimes available in Northern Europe and the US.

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