Singapore was ranked the world’s second-best, and Asia’s best expat destination in a survey conducted by HSBC in October, 2014.

Singapore is a great destination for expats for a variety of reasons. Stunning dining options that suit all palates, a vibrant nightlife, easy accessibility to the rest of South East Asia for quick getaways, great investment avenues, wonderful growth opportunities for working professionals in a thriving economy, and the lowest tax rates for any developed economy are just some of them.

Let’s take a look at an expat’s life in Singapore from the perspective of entrepreneurship, investment, and personal taxation.

Expat earnings and tax

Expats in Singapore earn US$257,000 per year on average, according to an ECA International survey released earlier this year. In Singapore dollar terms, that is approximately S$325,000.

What is the personal tax then paid by the average expat in Singapore? Only S$42,000, as per the personal tax calculator released by IRAS, and after taking into account some common tax reliefs like premiums paid on life insurance policies.

That gives an effective personal tax rate of 13% for an average expat. Do note that tax residency in Singapore is guided by the number of days’ actual stay in Singapore on an approved pass.

At least some of us have heard of the Angel Investors Tax Deduction Scheme, which offers a 50% tax deduction on investments made in local start-ups. So if an investment of S$50,000 is made in 2014, and a further S$50,000 in 2015 (there’s a minimum S$100,000 investment requirement in a 12-month period), that would knock S$5,000, or 12%, off the average expat’s tax bills for 2014 and 2015. This is one great tax incentive.

For those earning well above the average package, this scheme starts to look even better as up to S$500,000 in investment is allowed each year. But tick-tock – hurry! This scheme ends in March 2015.

Immigration and the expat

Perhaps you are ready for more and want to take the entrepreneurial plunge! Many expats are reluctant to look at these avenues as they are EP (Employment Passes) or PEP (Personalised Employment Passes) holders. There are some options you can consider, however.

• You could invest in a Singapore-incorporated private limited company.
• You could act as a non-executive director for a Singapore-private limited company. This means you are not actively employed or draw a salary from this role. This also requires prior approval from both the Ministry of Manpower and your employer.
• Your spouse could start a company and be employed as the local director by extending his/her Dependant Pass into a full working visa via a Letter of Consent.
• Though PEP holders cannot start their own companies, the spouses of PEP holders have ownership avenues open to them. They are not restricted as they have their own work passes.
• Think about converting your EP or PEP into a PR (Permanent Residence) status. You are not required to give up your citizenship to be granted permanent residency. PR holders can own shares and act as local directors for Singapore-incorporated companies, and have more flexibility in owning properties in Singapore.

Expats buying property in Singapore

As Singapore is a highly sought-after investment destination, many expats are interested in owning properties here.

Expats are allowed to invest in private housing properties in Singapore; condominiums, for example. There are myriad international banks in Singapore as well as large local banks that offer housing mortgages to the expat investor. For most expats, a mortgage line of between 60-80% is available at low interest rates for periods up to 25 years.

Options abound, and Singapore rightly takes the spot as Asia’s best country for expat living.

Having the right partner in your decision-making is often critical if you are looking to start a company in Singapore or get the right work visa.