Singapore is cutting its top personal income tax to 20 per cent by 2007 in its effort to attract skilled foreigners, particularly in the fin...

Singapore is cutting its top personal income tax to 20 per cent by 2007 in its effort to attract skilled foreigners, particularly in the financial services sector. Further tax incentives will be offered to promote wealth management activities, Islamic financial services and the listing of real estate investment trusts. Corporate tax remains unchanged at 20 per cent, which compares with Hong Kong’s rate of 17.5 per cent. Hong Kong’s personal tax rate—at 18 per cent—is also lower than Singapore’s. The two financial centres compete fiercely to attract foreign investment, particularly in the financial services sector. In terms of wealth management, both cities have attracted considerable amount of investment from the top financial firms. Credit Suisse and UBS have major wealth management businesses in Singapore. The likes of Citigroup Private Bank and HSBC Private Bank have a bigger presence in Hong Kong.