Friday, June 11, 2021

[Video] Singapore vs Overseas Investing

Dr. Wealth staff took a long time to edit and launch this video because initially, we thought that the material was too abstract for retail investors. Nevertheless the material is out and I hope that you guys enjoyed it.

If I met Alvin Chow in a Woodlands kopitiam to discuss the business and latest portfolio moves, the discussion would be similar in nature anyway and nothing here has been scripted.

I will be doing another video next week with another Dr Wealth trainer. Hope that you guys will continue to support me.

1 comment:

  1. For US inheritance tax, non-social security number holders will be taxed up to 40% on any cash or assets above $60K. If you have SSN, then the threshold is US$4M (I think, they adjust upwards once a while).

    Even americans themselves have not been keen on their dividend stocks like Reits, MLPs, and dividend aristocrats/achievers becoz (1) they have to pay income tax on their dividends, and (2) these stocks are value stocks or cyclical plays whose share prices have been lousy-to-average over the past 5 years. But now doing better post-covid.

    Rich foreigners will structure their US investments with hedge funds incorporated in jurisdictions that have tax treaties with US such as Bahamas, BVI & Ireland to avoid inheritance tax & also reduce dividend tax. Scammier ones will try to structure their payouts not as dividends, but as interest payments, and then try to do a claim back on "qualified interest income".

    But if you can do all this, you wouldn't be reading this blog or any other retail blogs lol.

    Not many people know this, but Ireland is the go-to place for pro-biz & tax-friendly angmoh environment. Their corporate tax rate is 12.5% (way lower than HK's 16.5%). This is how ALL the big US tech MNCs escape the higher US taxes in the last 30+ years. The Irish has been making noise about the G7's 15% tax floor.

    Liechtenstein is also 12.5%, but the ecosystem is not as well developed for ongoing biz operations, more as haven for keeping money & assets.

    Ultimately developed countries like S'pore, HK (ok developed city), Ireland et al will abide by the 15% in letter of the law, but shovel a ton of grants, subsidies, incentives etc etc to "strategic" sectors & companies. Pretty much how things are done today, and have been done over the last 50 years. EDB anyone???

    China's corporate tax is 25% & yet it's expected to apply for exemption to the G7 15%. Why? Coz of the tons of shovelling it does to strategic sectors like tech, auto, pharma, military etc that brings the effective tax rates to way below 15%. And it will argue that it's still a developing country.

    Regarding China politics, as long as Xi & his ilk & style of cult personality maintains power, Chinese corporates will be hamstrung & unable to maximise their potential valuations while being forced to operate under fiat & the Sword of Damocles. Foreigners will keep on demanding a fat risk premium, while locals will be quick to do their usual pump-and-dump boom-and-bust that's so endemic of their stock market.

    When, not if, Singapore adopts this G7 push, I think the initial knee jerk will be a boost for Reits, MLPs, biz trusts & other tax-advantaged entities. Like I said, govts & companies around the world will evolve to minimise & even take advantage of this "woke" paradigm. And it doesn't even need geniuses or multi-million dollar salaries to do it.