KUALA LUMPUR: Singapore has put in place measures to make it more attractive to the international business community, including enacting a new law exempting international arbitrators from income tax.
“Since May 3, last year, Singapore is probably now the only country in the world with such a clear and specific provision in relation to tax on arbitrator's fees,” said the Singapore International Arbitration Centre's (Siac) executive director and registrar Ang Yong Tong yesterday.
Prior to this, foreign arbitrators were subject to withholding tax at the non-resident income tax rate of 24.5%.
He added that Siac had also issued a practice note on arbitrators' fees last July to enhance confidence and transparency in relation to arbitrator's fees and other financial aspects of any arbitration conducted there.
“There were some arbitrators who were issuing high bills but with little particulars. There is now a cap on fees.”
There are also now new scales of appointment fees – for cases that fall outside Siac's arbitration rules – based on the value of claim made and the number of arbitrators hearing the dispute.
Among others, the fee covers appointments, screening for possible conflicts and monitoring the progress of the case. In international disputes with one arbitrator, a S$2.5mil (RM5.4mil) claim will cost S$2,500 (RM5,400) while a claim above S$25mil will cost S$5,000 (RM10,800).
Ang said this when speaking on “Growth and Development of International Commercial Arbitration in the Asia Pacific Region” on the final day of the Chartered Institute of Arbitrators Malaysia branch inaugural International Conference on Arbitration here.
He said as of Sept 1, Siac had also cut its management fees by as much as 40% in international arbitrations and as much as 25% in domestic ones.
International claims have been classified into six groups and range from “up to S$250,000” (RM540,000) to anything above S$50mil (RM108mil) with a sliding scale management fees which range from the minimum S$2,750 (RM5,940) to a maximum of S$25,000 (RM54,000).
During the panel discussion, one foreign delegate suggested Malaysia look at doing the same or it would lose international arbitrations to Hong Kong and Singapore.
Karen Mills from Indonesia said that Singapore might want to look at capping the fees of counsel representing the parties in arbitrations as some of them could purposely draw out a hearing to increase their fees.