Singapore earned its reputation as Asia’s pivotal leader in global trade and investments. With solid economic growth, pro-business environment and infrastructure, the city state is often a favorite choice for global entrepreneurs who are searching for headquarters for their company. Let’s take a look at why Singapore remains one of the ideal places in the world to set up a business.
With a robust infrastructure and support network established to promote business growth, Singapore offers an excellent environment for corporations and startups. Its vibrant business culture and economic stability has helped attract more foreign investments, and even World Bank agrees with this when it ranked Singapore on the top of its list (out of the 189 economies ranked) as the easiest place to run a business. In the recent 2014-2015 Global Competitiveness Index Report, Singapore secured the second spot based on national competitiveness of the 144 countries assessed worldwide. These recognition has propelled Singapore as the top choice for multinational companies (MNCs) to have their office headquarters in Asia.
Vibrant financial hub
The Singapore Exchange is the world’s fourth largest foreign exchange center, making Singapore a world-class financial hub for foreign investments and wealth management. Entrepreneurs can afford access to funding from more than 120 private and commercial banking services to help in the expansion of their businesses.
Excellent Location and Logistics System
With reports showing Asia Pacific as the fastest growing global economic region, many companies are exploiting every opportunities this region has to bring. Singapore is at the heart of a strategic international shipping route, making this small city state one of the busiest and largest hub for air and sea logistics in the world.
The Singapore Changi Airport serves more than 80 international flights on a daily basis. It’s emphasis on delivering excellent airport service and security has earned them various accolades and awards since they started their operation. In fact, Changi Airport was voted “Best Airport” in 2013 at the World Airport Awards held in Geneva, Switzerland.
Cost-effective Tax System
Singapore offers one of the lowest personal and corporate tax rates making it an ideal place to start a business. Personal income tax follows a progressive tax system which starts at 0% up to 20% for income above S$320,000. Individuals are only taxed for income earned while in Singapore while income earned overseas but received in Singapore are tax exempted.
Corporate tax rates for private limited companies in Singapore is 8.5% rate for profits below S$300,000 and capped at 17% flat rate for profits earned over S$300,000. There are no inheritance tax or capital gains tax.
According to the 2013 Corruption Perceptions Index report, Singapore was ranked 5th least corrupt country in the world. This is primarily due to Singapore’s stringent laws and legislation on business transactions and and their transparency in fighting graft and corruption. Salaries of civil servants and politicians in Singapore are higher in order to prevent them from engaging in corrupt activities in the government.
Exhaustive Protection for Intellectual Property Assets
As important hub for commercial and technical innovations, Singapore’s Intellectual Property laws plays a crucial role when conducting professional and business dealings for individuals and organizations. Copyright laws in Singapore are strongly enforced and any forms of copyright infringement is considered a criminal offense.
Companies who seek simultaneous trademark protection in several countries may do so by filing their application in Singapore under the treaty known as, the Madrid Protocol, where Singapore is also a member.
Singapore is widely known for its productive and highly-skilled workforce. Its manpower is recognized for their high professional qualifications, technical competency, strong productivity and smart career culture. It’s workforce are highly educated and sophisticated, which attracts top talents around the world.
Quality Standards of Living
Singapore provides all its residents, including locals and expatriates, a superb quality of life. Residents can expect world-class healthcare, convenient and affordable public and private transportation, outstanding schools and educational institutions, strong support system for businesses and entrepreneurs and a slew of other social and cultural opportunities that makes Singapore a great place to live with your family.
Crime rate in this country is very low, thanks mainly to a strong public support in curbing crimes, increased education and awareness about crimes and violence.
It also home to a diverse races, religion and culture that allows them access to different knowledge, skills and talent to help every entrepreneurs better understand the Asian market. Its open immigration policies has helped tremendously in promoting a robust pro-talent and pro-business culture.
The Singapore Economy – Brief Summary
Sixteen years ago when the financial crisis hit in 2001, Singapore was the only country that didn’t suffer greatly from the effects. In 2008 when there was yet another financial crisis, Singapore came out of the crisis on top, and was one of the fastest growing economies in the world. While the US and Europe were struggling to recover, Singapore was thriving, despite the fact that it has very little land and virtually no natural resources. Singapore’s economy is driven by tourism, electronics, and has the busiest seaport in the world.
Manufacturing businesses in Singapore contribute 20-30 percent annually to the economy. The industries that contribute the most are electronics, pharmaceutical, chemicals, construction and ship-building. The manufacturing of pharmaceutical and bio-medical supplies has been booming since 2011. Even though Singapore has seen a decline in the export of electronics, tourism and the selling of wholesale and retail products is growing at a rapid pace.
Singapore’s financial industry is also very robust because the country has political stability and is also very business-friendly. There are of course some other up-and-coming industries that are contributing to Singapore’s economy. These industries are health-care, education, and gambling.
The entire country of Singapore is no bigger than that of New York City, and Singapore has no natural resources. Interestingly, Singapore does run the third largest oil refinery in the world, but the raw oil is shipped in from Saudi Arabia and other countries.
Most people say that the country’s natural resources are its people. As the country’s economy grows, both foreign and domestic companies have more access to a better educated workforce, along with a booming customer market.
Singapore’s infrastructure is very well developed, as the government has been improving infrastructure ever since the colonial era. They have greatly improved all areas including transportation, communication, and the housing system in Singapore.
Gross Domestic Product (GDP)
In 2011, the country’s economy grew by 4.9 percent. Inflation in Singapore is supposed to average about 2-3.5 percent, due to the higher cost of living.
For the past eighteen years, the county’s government has been able to maintain zero debt.
Revenue Sources and Surplus
The government’s revenue is about S$54.9 billion. The major source of revenue comes from taxes, which makes up 91 percent of their operating revenue. The estimated budget is about S$2.3 billion. Singapore has been rated as the third richest country in the world and is expected to continue to grow.
Why do Companies Want to Relocate to Singapore?
Companies are looking for countries that have a larger amount of growth potential to satisfy the demands of the companies’ shareholders. For the most part, companies are looking to countries in Asia for the reason of Asia having a large and prosperous market. Southeast Asia is in fact the current favorite for companies; this is because of the booming infrastructure and large populations.
Singapore the Gateway to Asia
Singapore is the preferred place for companies of any size to set up their headquarters in Asia. This article will explain some of the most important reasons for why Singapore is such a success for pulling in foreign companies. There is also many companies who obtain CE marking in Singapore so they can export their products to the European markets across the world to stabilize their business.
About the Double Tax Treaty
Singapore has many double tax agreements with over 70 countries. The benefits of having this tax agreement are that your company can avoid having to pay the same taxes twice. You can also have lower withholding taxes. All of these things will go a long way in lowering taxes for companies. All of these things help with making Singapore a very lucrative spot to run a business.
Having an Attractive Tax Regimen
Most say that Singapore’s tax system is “simple and investor friendly.” The highest tax that a company will pay is 17 percent. The tax that a company will pay for any gain or dividend is zero percent. When it comes to foreign income it will be tax exempt as long as it’s taxed in a country of at least 15 percent. With all of these tax breaks it gives foreign companies a level playing field.
Singapore’s great location with excellent connectivity
Singapore is situated between the main trading and shipping routes in the world. Since 1989 Singapore has won the award for the best seaport in Asia. The country also has the Changi Airport which is also award winning. They also have award winning telecommunications. They ranked in the top ten of over 142 countries worldwide.
A High Availability of both High Skilled and Multilingual Working People
The people of Singapore are ambitious and skilled workers from all over the country. These people make up a very good working environment. The people in Singapore are multiracial and diverse, but they make up a very cohesive whole.
A Great Place for Management to Live with Their Families
Singapore has a very stable government with convenient transportation, and a very cosmopolitan atmosphere. They have some of the best schools and they have a very high view on the quality of life.
IP Protection/Legal System
Singapore encourages creativity and the growth of companies. They have a strong IP protection plan that is backed up by a renowned legal society. Singapore’s legal system came from the British originally and the system is still growing and changing to accommodate the growth of the country. You won’t have to worry about a lot of red tape when setting up your business, as the government makes this a very easy process.
Foreign Companies Looking to Seek Entry in Singapore
As a foreign company you have a few options open to you when deciding to have a business in Singapore. These options are:
- Subsidiary company- this is the method that most small companies will use
- Branch office-this will be considered an extension of the mother company
- Representative office- this is something to set up if you’re just looking to set up a company.
Singapore continues to pull in foreign businesses despite the dip of the global economy. With all the advantages that Singapore offers, it has continued to be the center for businesses of the modern world.
Businesses Moving Abroad
Jim Rogers was born and raised in New York and was also known as one of the greatest men on Wall Street. In 2007 he decided to move to Singapore. He found that Singapore is one of the top countries to live in right now. They have some of the best global businesses and they offer amazing living accommodations to the people that live in the area. People that live in this great place have been heard to say things like, “diverse,” “safe living,” “I love the low taxes,” and “cutting edge in the business world.”
Not only does Singapore offer a great lifestyle, but it also has a lot to offer the business world as well. If you’re looking to make a change in your lifestyle and branch out in a business endeavor, then here is a list of reasons why Singapore is the place to be.
- If you’re looking for a place that’s easy to do business, then Singapore is it.
- It was rated number one by the World Bank.
- Singapore is the third richest nation.
- Singapore has one of the best globalized economies in the world.
- Politically speaking, Singapore is number one in Asia for stability.
- If you’re looking for someplace that values quality of life then Singapore is the place to be.
- Tax rates are some of the lowest in the world.
One of the reasons Singapore is such a good place for businessmen is because of its location. Singapore is located in the middle of Southeast Asia, an area with a population of over 2.8 billion people. Its own population stands at around 4.5 million people, and Singapore is known for its high level of education and competence of its working class citizens.
Singapore has a very open immigration policy. If you’re looking to start a new business and have to relocate to Singapore, then it has become increasingly easier to do so in the past years. They have the appropriate visas readily accessible, and strong intellectual property (IP) protection policies that help protect your business assets.
Most people when they relocate bring their families with them. So, of course, one of the concerns for people is the quality of life. This shouldn’t be a concern for you or your family. Singapore has amazing health care and some of the top ranked schools, both public and private. Singapore also has both public and private transportation systems in place. Singapore is definitely in the lead when it comes to choosing a country to start and run a business, as well as having a high quality of life.
Singapore attracts investments and people looking to start a new business from all over the world. If you want someplace that makes it easier than ever to start a business then Singapore is the place to be.