How Billionaire Inventor James Dyson Saved $500m in 2 Years from Singapore’s Low Tax Regime
James Dyson is one of the UK’s most successful entrepreneurs. He has a multi-billion dollar fortune made from his ownership of Dyson, a manufacturer of vacuums and other household products. Dyson made a move to Singapore in 2019. He moved himself and his business headquarters to Singapore. He stated publicly that he wanted to be closer to the rapidly growing Asian markets.
There may have been other factors in Dyson’s thinking in his move to Singapore.
No Tax on Dividends
Singapore is not a traditional zero-tax haven. If you work and earn in Singapore, you’ll pay tax there. However, Singapore is a territorial tax country. Most types of income earned outside Singapore will be tax-free in Singapore. This will be important for James Dyson. His company has paid out some of the biggest dividends in British corporate history. The largest of those dividends were paid out after his move to Singapore. In 2020 his Singapore-based holding company Weybridge was paid a dividend of £400m ($460m). In 2021 a dividend of £1bn ($1.15bn) was paid to Dyson’s family holding company. These dividends would have been tax-free in Singapore.
The dividends Dyson received in Singapore would have been taxed at 39.35% had he stayed in the UK. His move to Singapore saved him over $500m in only two years.
Singapore has No Inheritance Tax
Dyson has a fortune of $12.3bn, according to Bloomberg. For such massive wealth, estate planning is important. Singapore abolished all inheritance taxes in 2008. Therefore his wealth can be easily transferred to the next generation. Of course, other methods exist for avoiding inheritance taxes, even without moving your residence. But moving to a top-class jurisdiction that doesn’t have inheritance taxes is the best way to protect your family’s fortune.
Many Corporate Tax Exemptions
There are many places with lower corporate taxes than Singapore’s 17%. This was likely not a huge consideration for Dyson. The main source of income for his Singapore holding company is likely to be dividends from overseas companies. These dividends are tax-free. Singapore also has many other exemptions and deductions for research and development and tech companies. My guess would be that Dyson’s tax rate in Singapore is in the low single figures.
Fast Second Citizenship
James Dyson is exactly the kind of entrepreneur that the Singapore authorities want to attract. He is operating businesses, he’s super rich and successful, and he’ll be viewed as a welcome addition to the community after a move to Singapore. He’ll have no trouble getting a second citizenship in Singapore. A second passport in Singapore can be possible in as little as two years. It would be unusual for most people to obtain Singapore citizenship so quickly. But for someone like Dyson, it’s likely to be waved through rapidly.
Easier Access to Explosive Growth Markets in Asia
When Dyson made his move to Singapore, the reason he gave publicly was that he wanted to be closer to the booming Asian marketplace to develop his business. There’s no doubt that money is moving from west to east. It makes sense in certain businesses to be close to the action. A base in Asia brings you closer t supply chains and potential new markets in Asia.
Safer than the UK
According to Numbeo, Singapore has much less crime than the UK. The crime index for Singapore is a low 27. Compared to 47 in the UK. The safety scale in Singapore is 72, compared to 53 in the UK. Big cities in the UK and US will fare even worse. Singapore is considered one of the safest cities in the world. Residents have little fear of crime. This was probably not a huge consideration for Dyson with his move to Singapore. But as countries like the UK and US become less safe every year, well-run Asian countries like Singapore become more attractive.
Avoid Future UK Exchange Controls and Global Tax
Dyson may have seen the writing on the wall for the UK. Like other Western countries, it has borrowed too much money. The size of the state has grown significantly in the last 20 years and is now out of control. The UK is at its limits in terms of how much it can borrow. The state already spends around 50% of GDP. Interest rates have started to rise substantially.
The only way the UK government will be able to survive is by taxing the rich. They’re likely to introduce a wealth tax in the near future. It’s also likely that some kind of exchange controls will be introduced to stop people from ditching the pound. They may even try to implement citizenship-based taxation like the US to discourage high-net-worth taxpayers from escaping.
Dyson doesn’t have to worry about any of these things. He and his multi-billion dollar fortune are safely in Singapore. He has a backup first-rate citizenship that will protect him against any future citizenship-based taxes.
Anyone, even with moderate wealth, can follow the same strategies as Dyson. It doesn’t have to be Singapore, either. There are many low-tax options globally. It’s important to act while you still can. As things become more difficult for Western governments, they’ll make it more difficult for you and your money to escape.
Liberty Mundo help high net worth clients protect their wealth and diversify their citizenships. If you need help with protecting your wealth, reducing your taxes or relocating overseas, get in touch with us today.