Relocating to Singapore

Investing / Brokers
1

Dear all,

I will be moving to Singapore from Vaud in the coming months. Currently, my investment strategy involves using IB (based in the UK) to buy mostly VT. I prefer keeping it simple. For my 3a, I have 100% equities spread across Viac/TW.

I have two main questions that I need your advice on:

  1. Should I withdraw my 2/3 pillar? This would allow me to move the money to IB and stop paying 0.5% fees (the total is about 250k). I would then pay the tax in Vaud, which is not too bad with the recent changes. I am little bit worried about having all my money in the same broker.

  2. Do I need to make any changes to my investment strategy? I was thinking of continuing to buy VT from Singapore. Can I keep my IB account in the UK? Any advice would be appreciated.

Just to clarify, I am a Swiss citizen. And I will probably move back in 5-10 years or so.

Thank you in advance for your help.

Best regards,

2

Hoping to do something similar in maybe 10 years, but with Malaysia. AFAIK SG has no capital gains nor wealth taxes. So you benefit withdrawing and handling your whole liquid networth.

Personally I’d withdraw, assuming the tax on it isn’t too high. Upon return to CH, and I’d love to be confirmed/corrected on this, you re-start at 0 and your buy-in will be far larger since your 2nd pillar is empty. Means you can offset a lot of income tax in CH, assuming you work at return, with big contributions to 2nd pillar in more advanced age.

No first hand experience with IB, but what I read it’s best to open a new account with IB SG and transfer positions. Easier than account modification. As for invest strategy, I don’t see a difference between now-then, unless close to retirement and desire for some part of portfolio be dividend/steady income to live off.

3

Better to ask directly to IB how it works when moving to a new country.

Singapore and the US have no tax treaty. VT dividends will be taxed at 30%. Moreover, local regulations may limit access to US ETF/fund.

Does your company offer tax services with a 3rd party the first year?

It may be interesting to discuss with one prior to your move. Singapore adopts a territorial and remittance basis of taxation. It may offer interesting opportunities if the portfolio is correctly built.

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4

About 2nd pillar, yes you can buy back but it is lock for 5 years if I remember well

5

No tax help there, in term of income and wealth it should be 0 for whatever is abroad from what I read so far. Any contact / company you can advise ?

About the dividend, yes it is lost money I think. However, dividends are not that high in VT, or maybe i shall consider low dividends ETF? Not sure if it exists

6

In Singapore having VWCE instead of VT is probably better.

You will most likely lose 30% witholding taxes on the dividends VT pays. Afaik Singapore has no tax treaty with the US, unlike CH.

So Ireland etfs are most likely better tax wise.

7

That would mean I lose 30 instead of 15 right? but the fund is 15 basis point more. So i guess both are somehow equivalent

8

You need to comapre it differently.

Yes you lose 30% instead of 15% of your dividends.

Dividend yield is about 2.1% that would mean 2.1% x 30% = 0.63% you lose, or 63 basis points.

With VWRL/VWCE you lose 2.1% x 15% = 0.315% or ~32 basis points. + 15 basis points TER = 47 basis points.

You are 16 basis points better off with VWCE and depending on your local tax law accumulating might be better as well.

Also VWCE ter is likely to go down a bit more with time.

Not a gigantic difference, but not meaningless.

2 Likes
9

Only about 60% of VWRL consists of US stocks, so you lose even less than that (and L1 withholding is likely not too different on average between VT and VWRL for the other 40%).

FWRA could be considered as VWRL alternative with a lower TER.

4 Likes
10

Oh you are totally right, forgot to include that.

You lose ~10-15% L1 on ex-US with VT and then another 30% on top in L2.

Yea, VWCE has major advantage here.

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11

About the opening, I checked with them. New account in Singapore, then transfer assets

12

Some poeple online recommended VWRA as it is accumulating, any opinion ?

13

It‘s the same. VWCE is also accumulating. One is trading in euro and one in usd.

Doenst matter in essence. But USD might be the easier currency, so VWRA.

1 Like
14

Thanks Tony, appreciate the help :slight_smile:

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15

Does anybody has some experience with that situation? I would be interested and continuously evaluating to do a short term (2-3 years) expat assignment or potentially a 1 year sabbatical leave to world travel with the family. It would be awesome tax wise to get all the pillar 2 money for my own custody (with close to 100% share) and once moving back, starting from 0 and huge potential for pillar 2 buy back afterwards. Is that possible and/or legal, assuming that I would go a country outside of the EU/EFTA?

16

Dear all,

To complete and post my answer here, it seems that the best two found for people living in Singapore would be the following for my research.

VWRA.L seems to be the way to go in my situation

17

This is legal from my research and what I check with my tax advisor. However if you buy back in the 2nd pillar, that part, you must wait for 2 years i think until you can take it (or 3, don’t remember by heart)
Also you will me impose when you withdraw your 2nd pillar → once you are out of the country, so depending on where your 2a is located, you will pay different tax