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Would there be any tax or stamp duties implication for a Singapore incorporated entity acquiring an equity interest in an unquoted US corporation? The purchase is structured first as a convertible option and upon certain criteria materlizing, the option is convert into equity in a future date.

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Wray Rives CPA CGMA
There would not be any tax implications of a foreign entity acquiring a US corporation nor would there typically be any impact upon the debt converting to equity. There would be interest income on the debt, which would be taxable income and if the entity later paid dividends to the equity holders those dividends would be taxable. Taxation of any capital gain upon disposition of the investment would depend on a number of factors and would require an additional discussion at the time of disposition.
Leave a Comment 425 weeks ago

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Question Owner
Thanks Wray. Comments is much appreciated.
Reply 424 weeks ago
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Connie Kwok
Just to add a point. Generally, dividends and interest paid by US corporation to non-US entities would be subject to a 30% US withholding tax.
Leave a Comment 425 weeks ago

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Question Owner
Thanks Connie. Comments is much appreciated. Indeed this WHT will applies as Singapore and US has no treaty in place.
Reply 424 weeks ago

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