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Advantages of setting up a business in Singapores
Singapore scores high on these factors, making it a popular destination for business setup. It is a platform where East meets West and it provides an excellent gateway to nearly all of the major Asian markets. It offers global connectivity due to its strategic location, a pro business environment, attractive tax regime, liberal immigration policies, skilled and talented labour force, world-class infrastructure, an efficient legal system, high quality of living and a responsive government.
This article describes some of the key benefits of setting up a business in Singapore. In other words, if you are a business person asking the question "Why Singapore?", this guide will provide you the answers.
One of the major advantages of doing business in Singapore is its location. Singapore is strategically located at the heart of the ASEAN (Association of South East Asian Nations). It's extensive air and sea linkages enables your business to access 2.8 billion people within a seven hour flight radius. This makes it a critical hub for professional exchange as well as inter-regional and intra-regional trade. Singapore's port is one of the busiest in the world and the country is classified as a premier International Maritime Centre.
Singapore's Changi Airport has 80 airlines that connect you to over 180 cities in 50 countries and serves over 15 million passengers annually. It has also received several accolades and awards consistently. Its liberal air policy to open up to the rest of the world, emphasis on competitiveness, efficiency and service has made it the 'Best Airport in the World' for 20 consecutive years (1998-2007). Thus Singapore provides your business with easy geographic access to all major Asian markets including China, India, Australia, Taiwan, Malaysia, etc.
Singapore is known for its pro-business environment which attracts sizable foreign investments and business entrepreneurs. It provides you with an environment where you can turn your ideas into businesses with ease and profitably. It only takes about 1-2 days to incorporate a business in Singapore. There is assistance provided by several government bodies at every step of the way. Setting up a business couldn't get easier anywhere else in the world.
Singapore is ranked 1st in the following :
Attractive Tax Regime
Taxes are on top of the agenda for any entrepreneur and one of the key considerations for setting up a business in a given jurisdiction. One of the Singapore's unique advantages is its low effective personal and corporate tax rates. Personal income tax has a tier system that starts from just 3.5% and goes up to 20% for income above SGD 320,000.
Similarily, effective coporate tax rate for Singapore private limited companies for profits up to SGD 300,000 is below 9% and capped at 18% for profits above SGD 300,000. Furthermore, there is no capital gains tax. Singapore follows a single-tier tax policy which means once the income has been taxed at the corporate level, dividends can be distributed to shareholders tax free. Singapore government has also introduced many industry-specific tax incentives to encourage foreign investment and growth of the targetted industries in Singapore.
In an effort to move away from direct taxes and towards indirect taxes and to make the economy more competitive, the government has adopted a more broad-based consumption tax called Goods and Services Tax (GST). Although the GST has gone up to 7% from 5%, Singapore still has one of the lowest GST rates - below the global average VAT/GST rate of 16.4%, and the Asia-Pacific average of 10.5%.
A number of programmes have been established by Singapore government and the private sector to help your company in Singpore improve efficiency, strengthen capabilities and exploit new opportunities in every aspect of your business. Some cater to the needs of business start-ups and local enterprises, while others are designed for large global companies that want, for example, to base their regional headquarters in Singapore. You can avail of loans, grants, tax incentives and equity financing. For more information on government assisted funding for Singapore businesses, please click here.
Liberal Immigration Policies
Singapore's open Immigration policy facilitates the relocation of foreigners who wish to setup business here. If you are a business entrepreneur who needs to relocate to Singapore to run your business or if you need to hire foreign professionals - the government has anticipated your needs and appropriate Singapore work permit provisions have been made to cater to such needs.
This liberal immigration policy is an incentive to woo valuable human resource, vital to nation's continued economic growth. Singapore aims at transforming itself into the "talent capital' of the global economy. As an aid to achieving this goal, it has liberalised its immigration policy, making it easier for foreign professionals to gain Singapore Permanent Residence (PR) status.
Intellectual Property Protection
IP Protection is taken very seriously in Singapore, which has become the one-stop center for businesses to manage their IP assets. The World Economic Forum (WEF), the Institute for Management Development (IMD) and the Political Economic Risk Consultancy (PERC) have all ranked Singapore top in Asia for IP protection for 3 years in a row (from 2002 - 2004).
Singapore businesses can not only register trademark in Singapore but also file for global trademark registration from Singapore as the country is a signatory to major IP conventions and treaties, such as the Patent Cooperation Treaty, Paris Convention, Berne Convention, Madrid Protocol, Budapest Treaty, Agreement on Trade-related aspects of IP rights, and World Intellectual Property Organisation.
The Intellectual Property Office of Singapore provides abundant expertise to ensure that your business has all the services you need for new patents, copyrights and trademarks - IP litigation, technology intelligence, and IP valuation.
According to Hong Kong based Political and Economic Risk Consultancy (PERC), Singapore retained its ranking as the overall least risky country in Asia in the year 2007. In 2008, it is ranked as the second best judicial system in Asia after Hong Kong. Singapore has an extremely transparent, sound and efficient legal system which is much appreciated by investors who want to set up business here. There are clear cut rules and regulations pertaining to commerce, manpower and other business-related areas. There are clear-cut laws regarding working hours, minimum wages, industrial production and taxation making it an attractive place to setup and operate a business.
Developments in Singapore law reflect an acute awareness of the need to recognize and accommodate current international business and commercial practices. There are a number of Dispute Resolution channels available, to help businesses settle disputes in a speedy, cost-effective and minimum-loss manner. As a result majority of the business disputes are settled through an out of court system through Mediation and Arbitration procedures.
Responsive and Clean Governance
Businesses do not exist in a vacuum - they need a supportive political infrastructure to grow and thrive. Singapore's political system is one that enacts laws, decides priorities and sets regulations using a rational, pro-business approach. Singapore has a stable and orderly government, whose vision is to take this nation to the front of the industrialized nations.
The government is pragmatic, rational and forward-looking. It emphasizes efficiency and excellence in every walk of life. It is very transparent and run with a high level of integrity. Hence, your Singapore business can be setup and operated in an efficient manner without red-tape, bureaucratic delays or the need to pay corrupt officials. In the wake of economic crises the government responds rapidly and decisively. It reviews its policies and programs and takes measures to restore stability as quickly as possible. Even with non-economic crises, protective and preventive measures are swiftly taken. The Singapore government realises the benefits of adopting technology to bring about more efficiency and has created an e-services and information portal - ecitizen. This portal helps you access information on government agencies and perform online transactions with them.
The government also fosters a Pro Enterprise Movement. Through this initiative the government seeks feedback from individuals and companies on how government rules and regulations can be made more relevant for business.
In the World Bank's Report, Governance Matters 2007: Worldwide Governance Indicators 1996-2006, Singapore was rated very strongly for government effectiveness (quality of policy formulation and implementation), regulatory quality (reflected in sound, market-friendly policies) and control of corruption.
Singapore has built an attractive, world-class, and productive work-force - a key ingredient for the success of any business. Since the country is a knowledge based economy, its manpower force is educated and professionally qualified. Singapore's work-force is recognized for its high level of education, high productivity, technical proficiency, work-hard and work-smart culture. The Singapore work-force is cosmopolitan, with professionals from all over the world, who bring with them their extensive knowledge, professional expertise and vast experience.
According to BERI's 2007 Labour Force Evaluation Measure (LFEM) report, Singapore has the Best Labour Force in the world. Singapore has invested in a globally competitive work-force, evident from its rankings below.
Singapore is one of the very few cities in Asia to offer world class physical and research infrastructure. With parallel growth in various industrial sectors, Singapore has been relentlessly upgrading its infrastructure to not only accommodate, but also stay ahead of business demands. Singapore's physical and research infrastructure can help you quickly and easily set up your business operations along with ensuring long term growth.
Singapore is ranked Asia's top convention city and has also hosted some of the world's most prestigious business events like: The World Economic Forum 2005, the 117th International Olympic Committee Session held in 2005 and the 2006 Board of Governors Annual Meeting of the IMF and World Bank.
Depending on the size and nature of your Singapore business, you can choose from setting up operations in an industrial/business park, build your own establishment on industrial land or move into readily available commercial office space or ready built standard factories.
Singapore is a technology savvy country which tries to use technology to build efficiency. It is interesting to note that 99% of the population has access to broadband network and the country is often described as a 'plug and play' nation.
Extensive Trade Agreements
FTA's or Free Trade Agreements are superhighways that connect Singapore to major economies and new markets. The benefits that your business gets to enjoy are: tariff concessions, preferential access to certain sectors, faster entry into markets and Intellectual Property (IP) protection. Singapore currently has FTA's in force with world's leading trading partners to help reduce the tax burden on your Singapore business. Agreements have been signed with key economies such as USA, Japan, Australia, New Zealand, China, India, South Korea, Panama, Chile, Jordan, Switzerland, Iceland, Norway, and many more.
Singapore has also signed 35 Investment Guarantee Agreements (IGA), which help to protect business investments made by Singapore-based companies in other countries against non-commercial risks. For more information on FTA's please visit Singapore's official FTA website . Singapore is also part of Schemes of Preferences designed to help reduce trade barriers. They are formed among nations who agree to give preferential trade tariffs to participating nations.
High Quality of Life
Most foreign professionals and entrepreneurs who setup business and re-locate to Singapore do so with their family. A possible concern for most people is the quality of life in Singapore - the social environment, cost of living, accommodation, education etc. On this front too Singapore scores high. 95% of Singapore residents appreciate the clean, safe and efficient society. Singapore has instant appeal for those wishing to move here start their career and bring along with them their family.
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