Mr. Tan is the founder of a full-service Singaporean law firm with an international reach. The firm is particularly specialized in company registration, ICO advisory, licensing law and legal business concerning cryptocurrencies.
Mr. Tan, thank you for your time. I would like to begin with your start into the law business. How long you have been practicing law?
I passed the bar in the year 2000. In the following I was working on and off as a lawyer at practice, combined with working as an in-house counsel. For instance, I worked for Infineon for several years as in-house counsel. Besides that, I was a general counsel for several other companies as well.
Has anything changed in the law business since you started working as a lawyer?
Yes. A lot is digital because of the recent Corona situation. For example, we had online-Zoom hearings and didn’t go physically to court anymore.
Also, the speed of work has increased a lot in Singapore. Everything works faster. I was talking to a long-time experienced colleague last week. He was saying that 20 years ago, he could simply go to court and handle everything with no problem. As he continued, he told me that nowadays it was a challenge to keep up. He goes to the court room and he talks to the young registrars and the judges. And now, before he finishes his sentence, they have already everything done. Also, the digitalization has changed the way of work tremendously. In addition, it is an international – a global economy right now. I do practice quite a lot international law. Most of my clients are actually from abroad.
What are common questions or topics your clients need legal help for?
For example, we have just done four legal opinions for Singapore because a lot of clients are applying for licenses from the central bank of Singapore. Most recently we have also done several contentious matters where clients want to sue someone. Moreover, we have a few application requests for licensing with the central bank. In these cases, we help with e-money licenses or money changer remittance licenses. Singapore is now very focused on the digital payment token space. Cryptocurrencies like Bitcoin are now classified as payment tokens in Singapore. Therefore, a lot of companies are applying for the licenses now. That’s why we are currently very busy working in this area.
I read on your website that you are familiar with ICO. What is an ICO?
An ICO is an initial coin offering. Basically, it’s a disruption of the capital space, using digitalized tokens. If you have heard of Bitcoin before, that’s a digital cryptocurrency. Now, a new business project can design a kind of a token in order to raise money.
A simple example would be an airline startup: The airline miles program can easily be converted into a cryptocurrency in its ecosystem. What you can do now is to raise money for the startup and pre-sell the tokens. So, it’s like selling the airline miles. And when people buy the token, which is like your airline miles, they can then exchange it for flights or other things in the ecosystem. The interesting thing is they can trade it among each other. In other words, the whole ecosystem of this business can become liquid. You can exchange all these goods on a place changer of listed tokens; therefore, it has a life of its own.
Another example is Starbucks; Starbucks is everywhere in the world and is publishing its own token. Or hear this: Three years ago, Burger King issued its own token in Russia. If you go to Burger King, they give you a Burger King token. This whole mechanism is therefore a very interesting thing for startups. The ICO space is like a global crowdfunding. Crowdfunding is very popular in Europe. You can imagine crowdfunding usually rises around 50’000 to 1 or 2 million Euro. However, an ICO can raise anywhere from 5 million to 100 or 200 million Dollars. The biggest ICO – as far as I know – even raised 4.2 billion Dollars. That is amazing, right?
This indeed makes a difference. Is Singapore a good location to launch ICO?
Very good. For instance, we have one client from the Netherlands, who is trying to relocate to Singapore now. The reason is that European banks are very tight with the AML and CFT requirements. Now, let’s take this particular client of mine for example: To send money from his European (Dutch) bank account to Singapore, it took quite a little bit of effort. When he initiated to transfer Bitcoin, he went with a bank in Lichtenstein, where they call themselves “Crypto friendly”. But it actually took months to take the money out of set bank. Which is ironic, because the money was on his own bank account, but he couldn’t pick it up. The bank always put my client off with saying that they were still checking AML and CFT. It feels a little bit like putting money into the bank and hoping for it to come back someday.
This sounds all too familiar to me. It is indeed questionable but unfortunately typical for European banking.
I was just talking to someone from the UK over the weekend. We were talking about banking and he told me that the process in order to transfer something like 5’000 Pounds is almost mad. The banking system could have a big change with cryptocurrencies.
Compared with this, Singapore is much friendlier. Singapore has been under the top three or top five destinations for cryptocurrency projects for the last three to four years. In addition, we have now a new law. Before that it was an unregulated field of business in Singapore. It was not illegal though, just not officially regulated. Yet, now we also have a legal base for cryptocurrencies, especially when it comes to big money transfers, investments, and in general all the business that comes along with cryptocurrency.
Just to be clear, the new law doesn’t have any restrictions and only regulates, what the economy was doing all along?
Before the regulations a friend could ask you to buy or sell a coin and he would give you a provision with no further obstacles. Now you need a license to be a dealer. But the possibility and the simplicity of transferring money stayed the same. For instance, I had a client from abroad today who paid for a legal opinion. We didn’t know how high the bank fees will be for the money transfer. So, we agreed to round up the sum of legal fees and that I will even out the actual difference with Bitcoins. All this was done in a few minutes. I dread the formalities and the procedure if this were to be in Europe.
What would you say differs Singapore from other Asian countries?
Singapore is considered one of the main financial countries in the world. You have New York, London, Shanghai, Hong Kong, and Singapore; these are the top five. And Singapore is one of the few countries where East meets West. Singapore is the financial heart of the South-east region. Many headquarters are set up in Singapore. Also, Japanese set up their global head units in Singapore and then, have their home offices in Japan. Same goes for many Korean or Chinese companies who profit from a head unit located in Singapore and a domestic office in their home country. The reason is that it is much easier to do business here. We have a very open economy, an open floor of finance and an open floor of speaking languages. Furthermore, Singapore has one of the least corrupt business in the world.
How can I establish my own company in Singapore as a foreigner?
In fact, we have many clients from overseas who establish companies in Singapore. We can usually do it in one day. We just need to check your passport – do the KYC – and when we receive the money, we can do it in one day. For example, we have a client from abroad who came to us and wanted to trade metals. So, we provided the trading license that was needed and set up a single-family office in Singapore. We additionally registered a few companies thereto. He was so happy with the result that he recommended all his friends to join. Of course, also with him, we set up the company in one day.
Can you give me a quick overview of the tax system in Singapore?
The tax system in Singapore is very attractive to investors and high-net-worth people. We have a very progressive tax regime, in particular, zero capital gains-tax. For example, if you bring your money to Singapore and you invest in something you don’t get zero capital gains tax. On the other hand, you can do trading and if it’s not your main business activity, then it’s zero tax. For instance, you bring one million Dollars to Singapore and you buy stocks; let’s say you make 100’000 Dollars out of it, for these 100’000 Dollars you don’t need to pay taxes.
The Goods and Services Tax here is 7% and the corporate tax can go up to 17%. The personal tax can go up to 20%. For the lower income it is almost zero percent. The more you earn, the higher are the taxes (up to 20%).
How can I get permanent resident permit? What are the requirements?
This is also a very common topic. So typically, we get our clients an employment pass. After three years of employment pass in Singapore, and if spent half of the time in Singapore, we can apply for permanent residency in Singapore. The other possibility of course is an independent pass, for example if you marry a Singaporean.
We are moving to the last topic, the criminal law in Singapore. It is very well known, that Singapore has one of the lowest criminal rates. I would like to get the idea of the differences between the consequences in Singapore compared to Switzerland. For example: A fine is imposed on anyone who throws away small waste. In general, the fine amounts to a few hundred Dollars. What could be the consequences in Singapore for this misdemeanor?
Singapore we also call the fine-city, so, for everything you get a fine.
Mr. Tan is grinning.
To answer your question; we have a fine system as well and a shaping regime. To be concrete, if you get caught for littering you can get fined and you can be forced to do public service. For instance, you must go to the beach and pick up litter.
I see, so the criminal law also includes an educational effect.
Yes. I think also that the law is very well enforced here in Singapore. This is also the impression and opinion of people from abroad. This is part of the breakthrough with regard to the safety and order in Singapore. The only place in the world that is probably even safer is Japan. In Japan you can leave your car unlocked and nobody will steal your it. In Singapore I wouldn’t recommend doing that. Nevertheless, Singapore still has one of the lowest criminal rates in the world. And I hear people saying that they would get up in the middle of the night, walking through the streets at 3 a.m. and they wouldn’t feel any fear, because it’s really safe here.
Mr. Tan before we close the interview, I would like to know which talent you would like to possess?
The ability to travel in time. I would like to experience different periods of time. We know the presence, but we don’t know how it was in the (further) past or how it will be in the future – and I would like to know. So, time traveling.
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