One of Singapore’s biggest semiconductor companies with a US$100 billion (S$136 billion) net worth is relocating back to US, according to US President Donald Trump. The communication chips manufacturer will relocate to Delaware in US, bringing about US$20 billion in revenue and creating more jobs in US.
According to the Singapore Economic Development Board (EDB) website, there were 300 researchers based in Singapore for Broadcom in 2013. The EDB has been giving lucrative tax breaks to Broadcom for their presence in Singapore.
More notably, the tax incentives helped reduce Broadcom’s Singapore taxes by a massive US$423 million in 2013 and by US$399 million in 2012. The savings were considerable given that the net earnings of Broadcom were US$424 million in 2013 and US$719 million in 2012. Without the EDB’s tax incentives, Broadcom would not have made any profits last year.
Broadcom said that they are moving out of Singapore as a tax incentive is ending in 2021, four years earlier than expected.
Singapore is one of the world’s notorious tax havens, alongside Cayman Islands and the British Virgin Islands. The country has one of the worst income gap in the world with a gini coefficient of 0.463 due to the number of rich foreigners entering the country to dodge taxes in their home countries.