DPM Lee's Reply to Parliamentary Question on the Use of Singapore Dollars for Projects Outside Singapore
Issues Raised in Parliament
AANSWER TO PARLIAMENTARY QUESTION ON: the Use of Singapore Dollars for Projects Outside Singapore
For Parliament Sitting on 04 Sep 98
Question: To ask the Deputy Prime Minister whether the Monetary Authority of Singapore will allow Singapore based companies to use the Singapore Dollar for their projects outside Singapore.
1 The Finance Companies Act was revised in December 1994 to raise the minimum capital requirement for finance companies from $0.5m to $50m. The aim was to enable finance companies to have the resources to compete more effectively and increase public confidence in them. The finance companies have been given up to year 2003 to comply with the $50m minimum capital requirement.
1 Singapore residents may borrow S$ for use outside Singapore, without the need to consult MAS. Singapore-based companies which are not jointly-owned or majority-owned by Singapore citizens and hence are non-residents, have to consult MAS if they wish to borrow S$ for use overseas.
2 As a working guideline, the amount of S$ financing allowed for such projects will be more generous where the companies are under Singaporean management control or have Ministry of Trade and Industry (MTI)/Economic Development Board (EDB) sponsorship. Such companies will be allowed 100% of the project costs financed in S$ if the Singaporean shareholding is between 21% to 49%, or up to 50% of the project costs if the Singaporean shareholding is less than 21%. Overseas projects without Singaporean management control and MTI/EDB sponsorship will be allowed S$ financing up to the proportion of the Singaporean shareholding.
3 In all cases, the S$ proceeds from the credit facilities must be converted or swapped into foreign currency for use outside Singapore. This follows naturally as the S$ is not an international currency.