The decision of world-renowned British technology company Dyson to move its headquarters to Singapore will primarily benefit the firm itself due to the Republic’s comparatively low corporate tax rates, while local white-collar professionals will potentially face “tough competition from their foreign counterparts, opines retired Singaporean international banker and prominent socioeconomics commentator Chris Kuan.
Financial Times reported that Dyson, which already manufactures all of its products in the Asian continent, has been demonstrating “strong growth” particularly “in China, South Korea and India, where its high-end vacuum cleaners, hair dryers and air purifiers have found favour among middle-class consumers”.
Citing FT, Mr Kuan wrote in a Facebook post that “Singapore has lower disclosure requirement than the UK, which comes very handy with the huge investments” into building electric cars in the Republic, as it would indicate “Fewer regulatory eyeballs on the business”.
Mr Kuan also touched on the question of taxes, whereby he quoted a “tax expert” who “opined that the move makes very little difference to its UK tax bills if it is a HQ relocation and, as the company stated, that its R&D remain the UK”.
“However, James Dyson himself may gain from Singapore having no capital gain or inheritance tax.
“Moreover, the company may pay zero tax, depending on the incentives the EDB throws in, on top of the concessionary tax rates over up to 5 years,” he added.
In terms of employment, Mr Kuan wrote that while the HQ move would be a “great advertisement for Singapore”, he appeared to be doubtful as to “how many Singaporeans will want to work in a factory, even if it is a high tech one”.
He emphasised that “local attitudes towards what is meant by having a good career or having a skilled job” plays a great role into feeding that perception, hinting altogether at a Singaporean society that is deeply entrenched in classism.
“The HQ will provide a number of white collar professional jobs like marketing, supply chain management, corporate finance etc., but Singaporeans” will face “tough competition” in securing such jobs, as “Foreign Talents” tend to “have a lower wage threshold”.
Mr Kuan also noted that “Very few current UK based managers are relocating to Singapore”.
Additionally, he highlighted that Dyson “has no intention of moving its UK patents to Singapore, because it enjoys favourable treatment in the UK”.
On Wednesday (23 Jan), Mr Kuan wrote about the potential impact of the relocation:
“Lost in all this chest thumping about a famous brand relocating its HQ to Singapore – the design and engineering brainwork remain in the UK where the company is beefing up.
“Perspiration in Singapore, inspiration in the UK? Well. there will be taxes earned by the govie and Headquarters jobs available; just don’t bet all of them are going to Singaporeans,” wrote Mr Kuan.
He added a point regarding “tax arbitrage” in a comment under his post:
Netizens appear to concur with Mr Kuan’s predictions regarding the potential effects of the Dyson HQ’s move to Singapore:
Singapore has “one of the most business-friendly tax regimes in the world”: Bloomberg, based on audit firm KPMG findings
Bloomberg reported that Singapore has “one of the most business-friendly tax regimes in the world”, with “rates for corporate tax, at 17 percent, and personal income, at 22 percent”.
The aforementioned tax rates respectively “beat regional averages around the world, according to data compiled by tax and financial advisory firm KPMG LLP”.
Citing future hikes in goods-and-services (GST) and property taxes – as well as the introduction of a carbon tax – as announced by Finance Minister Heng Swee Keat last year, Bloomberg added that such measures are part of the Singapore government’s effort “to deal with long-term spending strains around an aging population”.
“At the same time, the government offered an extension of the corporate income tax rebate and more support for research and development projects,” wrote Bloomberg.