1. S O N A M J A M B H U L K A R
R O L L N O . 8 7 4 , B B A L L B
N A T I O N A L L A W U N I V E R S I T Y , J O D H P U R
LEASE FINANCING IN
SINGAPORE

2. LEASE
 Meaning: Leasing allows you to pay a
rental for the use of an asset over a
period of time.
This eliminates the need to be concerned
about asset obsolescence and asset
disposal at the end of its useful life.

3. Leasing at Singapore: overview
 Beginning in 1970s.
 Lease is mainly provided to corporate
organizations.
 Lessors are specific companies which are in
business of leasing, eg. ORIX leasing Singapore ltd,
Hertz car rental, Gold bell corporation, Singapore
expacts.
 Leasee are usually corporate.
 Leasing is also done according to a particular
project.

4. Leasing in Singapore
 Financing of up to 100% of the asset value.
 Goods and Services Tax (GST) is charged on the
monthly rental payments.
 Title of the asset is retained by the Leasing
Company at all times.
 In general, more applicable to equipment with
minimal resale value such as copiers or fast
changing technological assets.
 As a newly industrialized country Singapore’s
leasing to total capital investment is relatively
low.

5. Leasing scenario in Singapore
0
5
10
15
20
25
30
35
United States Singapore United Kingdom
Leasing percentage
Leasing
percentage

6. Assets Financed
 Construction Equipment
 Residential leasing
 Vehicles
 Computer
 Office equipments
 Manufacturing equipments
 Medical equipments
 Project based Financing

7. Stamp duty on lease in Singapore
LEASE /TENANCY RATES
(a) Where annual rent does not exceed
$1,000
Exempted
(b) Where annual rent exceeds $1,000, Stamp Duty is based on the contractual
rent or market rent, whichever is higher
- For every $250 or part thereof of the
average annual rent for lease term:
-Up to 1 year $1.00
-More than 1 year and up to 3 years $2.00
-More than 3 years or for an indefinite
term
$4.00

8. Legal Provisions
 Leasing Association of Singapore
 Asia leasing association – headquarter
 Ministry of Finance, 1982
 Tax benefits is a reason for lease financing. But in
Singapore taxing statutes no reference is made on
leasing.

9. Problems in Leasing Environment
 Conventional ordinary lease: barest minimum tax
benefit
 Low value transaction: No benefit in taxation
 Short term leasing: No long economic development
due to short term transaction.
 Immaturity of long term debt market
 No set scale for establishing residual value

10.  Reluctance for foreign lease: Because of lack of
medium of confidence on foreign currency and no
medium for long term funds in local currency.
 No promotional activities: No promotion of correct
concept of leasing so that the correct potential of
leasing can be fully exploited.
 High tax rate- 40%: No encouragement for
leasing, need of liberal approach
 Lack of government incentives.

11. Prospects
 Conducive and positive regulatory framework
 Economic restructuring: high technology, increased
mechanism and automation
 Long term leasing incentives
 Government support
 Amendments in Statutes

12. CONCLUSION
 Uncertainty in leasing industry
 Present framework are unsatisfactory
 More development is needed in leasing market
 Wide range for leasing in International market
 Unstable market
 Less Taxing benefits