Nathan Tinkler and the billionaire Singapore sprint

Coal baron Nathan Tinkler is not a man content to stay still for long.

Just two months after merging his former coal company Aston Resources and the larger Whitehaven Coal, Tinkler this week launched a surprise bid to take Whitehaven private.

Never mind that the ink is barely dry on the merger paper, which delivered Tinkler a 21.4% stake in Whitehaven. Never mind that Tinkler will need as much as $4.5 billion to pull off the deal, and his personal worth is around $1 billion at the moment.

Tinkler is determined to make something happen; be that an actual takeover or perhaps the flushing out of a rival bid. And quickly.

But that wasn’t the only bit of news to come out of the Tinkler camp this week. Some nifty work by The Sydney Morning Herald revealed that Tinkler has taken up residence in Singapore.

According to his PR man, Tim Allerton of City Public Relations, the city state is “an essential part of Asia … and he’s got some financiers and investors in Singapore – he just feels it’s more comfortable, he enjoys the city and wants to base himself there.”

Tinkler isn’t the only young billionaire in the news right now doing the Singapore sprint. Facebook founder Eduardo Saverin caused a storm when it was revealed days before the company’s disastrous float that he too had shifted to Singapore, thereby renouncing his US citizenship.

Saverin’s spokesman said his move was driven by the fact Singapore is “an attractive place to live and a convenient travel hub for doing business in Asia.

“US citizens are severely restricted as to what they can invest in and where they can maintain accounts. Many foreign funds and banks won’t accept Americans.”

Comfort, convenience and proximity to Asia are all good reasons for moving. But, as many commentators have argued, the key reason is a little more practical – tax.

Consider the following facts about the Singaporean taxation system:

• Income tax: A progressive system starting at 0% and capped at 20% for those earning income about $250,000. Compare that to Australia’s top marginal tax rate of 45% and you’ve got a pretty compelling starting point.
• Corporate tax: The corporate tax rate is capped at 17%, compared with Australia’s rate of 30% ­– which looks increasingly unlikely to fall anytime soon.
• Capital gains tax: There is none. End of story.
• Estate/death/inheritance taxes: Nope.
• Angel investment tax incentives: Approved angel investors who invest at least $79,000 in an eligible company can get a generous tax deduction (capped at $250,000) providing they hold their investment for at least two years.

Not hard to see the attraction, is it? And it’s no surprise that Singapore has become an undisputed centre of global wealth. According to the Boston Consulting Group’s recent world wealth report, Singapore has the most millionaire households per capita, with 188,000 households – or 17% of all resident households – holding disposable private wealth of over US$1 million, excluding property, businesses and luxury goods.