The Asian debt market is expected
to grow sharply in the next decade to meet the huge
financing needs of Asian economies. The attractiveness
of Asian debt papers to international investors would
be enhanced if such papers are rated by international
credit rating agencies. Singapore can play a pivotal
role by attracting internationally reputable credit
agencies to conduct such operations here. This would
also complement our efforts to develop Singapore into
a regional capital market.
To encourage the setting up of reputable
credit rating agencies in Singapore, I have decided
to grant a concessionary tax of 10 per cent on the income
earned from providing credit rating services with respect
to the issue of foreign currency denominated securities
in Singapore. The incentive will be for an initial period
of 5 years, and will take effect from Year of Assessment
1998.
To qualify for the incentive, the credit
rating agency must:
-
have a track record in international
credit rating of at least 10 years;
-
employ at least 2 qualified
credit analysts in Singapore; and
-
incur annual business spending
of at least S$500,000 in Singapore.
