(Removes name of SOCAR spokesperson)
* Singapore will be “main booking entity” for trades
* CFO Lorinet to move from Switzerland this year
* Taxes in Singapore can be lower than Switzerland
* Gunvor says will seek to expand in Asia
By Emma Farge and Florence Tan
GENEVA/SINGAPORE, May 23 (Reuters) - Commodities trader Trafigura said on Wednesday that Singapore would become its main trading centre as it seeks to tap booming regional demand, dealing a blow to Switzerland as a commodities hub.
Asian economic growth led by China is causing a shift in the global demand centre from West to East, prompting a hiring spree among Singapore’s commodity houses.
Trafigura’s decision to rebase its trading centre will hit Swiss government hopes - and revenues - at a time when authorities are seeking to promote trading as a source of alternative income to banking, which has been hit by the financial crisis and inroads into the nation’s cherished tradition of secrecy.
“Trafigura Pte Ltd, the Group’s long established Singaporean entity, will... become the main booking entity for the group’s trading activities,” Trafigura said in a statement.
As part of the expansion, Trafigura’s chief financial officer Pierre Lorinet will move from Geneva to Singapore later this year and take on the additional role of Asia Pacific Managing Director, the firm added.
The move will not affect staff in other offices globally, Trafigura said. Previously, Trafigura’s main centre for trade flows was in Amsterdam, where the company is legally registered.
Trafigura, which says it is the world’s third biggest trader of raw materials, told Reuters earlier this month it was seeking further acquisitions in the region after buying a stake in Nagarjuna Oil Corp Ltd’s planned Indian refinery.
Geneva, with its low corporate taxes, proximity to major banks and reputation for secrecy, vies with London, Dubai and Singapore to be the world’s top commodities trading hub and is the base for major traders like Vitol and Mercuria.
Geneva is the top global centre for grain trading and the number 1 alongside London for physical oil trading, according to the Geneva Trading and Shipping Association (GTSA).
Typically trading companies in Geneva are categorised as “auxiliary companies” and pay around 12 percent corporate tax, and the revenues form about a tenth of cantonal GDP.
But taxes can be even more favourable in Singapore, which allows commodity firms with qualifying income under ‘The Global Trader Programme’ to benefit from a concessionary tax rate of 10 percent, according to a government website.
The Alpine country’s reputation for secrecy and discretion has also begun to change partly due to a long-running tax dispute with the United States.
Proximity to China is also a major string to Singapore’s bow.
“People want to be close to their clients, and they want Mandarin-speaking traders,” said a Swiss-based oil broker.
Rival Swiss-based trading house Gunvor said it planned to expand its activities further in Singapore.
“There are no current plans to move the headquarters to Singapore, but Gunvor is increasing its emphasis on Asia constantly, and it is its fastest growing operation,” said Gunvor spokesman Stuart Leasor.
But SOCAR Trading, the trading unit of Azerbaijan’s state-run firm, which has been headquartered in Geneva since 2007, said it would continue to hire staff in Switzerland.
“SOCAR Trading is not planning any move to Singapore. The company ... has constantly increased its workforce and network in the region, something it will continue doing in the years to come,” said a spokesperson by email.
The firm also has a trading office in Singapore. (Reporting by Emma Farge in Geneva, Florence Tan and Saeed Hasan in Singapore; Editing by Will Waterman)