Why Singapore is a good place to start a business

There are many benefits when setting  up your business in Singapore.

1) You will enjoy the benefits of excellent connectivity and a strategic location

Singapore is home to the world’s top companies across all industries, in part, due to its location in the heart of South-east Asia and close proximity to emerging markets of India and China. It’s Changi International Airport serves over 80 international airlines with connections to more than 330 cities, along with hosting many leading logistics firms such as UPS and FedEx.

There is little wonder then, that in the Logistics Performance Index, a worldwide survey of global freight forwarders and express carriers and a benchmarking tool developed by the World Bank, Singapore was rated top in Asia for logistics performance.

Additionally, Singapore’s seaport infrastructure has been ranked the best in Asia for the past two decades. The container ports here are the busiest in the world, offering 200 shipping lines with links to some 600 ports in 123 countries.

In telecommunication and information technology, the country’s broadband network reaches 99 percent of the population, with international and regional connectivity measuring 27.6 Tbps to more than 100 countries at last count.

2) You will be a part of the start-up nurturing and business-friendly ecosystem

Singapore consistently tops World Bank’s Ease of Doing Business report due to its hassle-free business set-up processes and was also rated as offering the best IP protection, infrastructure, and incentives in Asia by World Economic Forum’s Global Competitiveness Report 2015-16.

The Economist Intelligence Unit, Country Forecasts Report in 2014, ranked Singapore as the most attractive investment location, both regionally and globally.

The Global Innovation Index (GII) 2015 ranked Singapore as the best-performing Asian country in terms of innovation performance.

Besides providing easy access to capital to budding and successful entrepreneurs, Singapore continues to be well-regarded as a triple-A rated economy and a stable location for business expansion as well as for investments. The country hosts over 128 commercial banks, with many head-quartered here to service all their regional activities.

There are also 31 merchant banks and 604 capital markets services license holders in Singapore.

It is also the hub for wealth management and investments in Asia. The city-state has the world’s third largest forex trading center, Singapore Exchange (SGX).

The Singapore Government has played its part too in propelling the nation towards a thriving start-up ecosystem. One of its initiatives is called Startup SG, which is essentially a launch pad for entrepreneurs by providing them with a platform to access local support initiatives as well as connect to the global entrepreneurial network.

The platform of Startup SG is categorised under six different pillars.  Start SG Founder – for providing valuable mentoring to first-time entrepreneurs; Start SG Tech – for providing early-stage funding for commercialising a tech idea; Startup SG Equity – which catalyses equity investment for start-ups; Startup SG Accelerator – aimed at enhancing capabilities of accelerators or incubators; Startup SG Talent – which guides entrepreneurs on how to attract and retain promising global talent as part of their team; and Startup SG Loan, which connects start-ups to much needed financing.

3) You company can take advantage of attractive tax frameworks and extensive trade agreements

The Singapore government has signed over 21 free trade agreements (FTAs) with 27 economies and 76 comprehensive avoidance of double tax agreements (DTAs). These agreements facilitate business and trading across borders and are aimed at minimising tax barriers to the flows of trade, investment, technical know-how and expertise. This, along with absence of capital gains and dividends tax, as well as lower withholding taxes, make Singapore the desired destination to incorporate a company.

Singapore also offers one of the most attractive corporate tax structures in the world with the highest corporate tax rate on taxable income being 17 percent. Even though its marginal rate is the third lowest in the world, the effective rate, taking into account the various schemes, is even lower.

Overall, Singapore has a progressive tax framework, which is based on territorial policy. This means that individuals and companies are taxed on incomes generated in the city-state, and on foreign sourced income remitted into the country.

Since 2003, in a bid to increase the country’s attractiveness as a wealth management hub, the government has progressively relaxed the taxation policy on qualifying foreign sourced remitted income. Singapore-based holding companies or headquarters can repatriate dividends from their directly-held foreign subsidiaries to Singapore free of Singapore tax. Those whose foreign subsidiaries are engaged in substantive economic activities but are unable to meet the qualifying conditions for this tax exemption may apply for a specific exemption.

Also, to encourage multinational companies to relocate their headquarters to Singapore, the Economic Development Board offers regional headquarters (RHQ) and international headquarters (IHQ) incentives.

Most importantly, the Singapore personal tax structure is progressive. Marginal rates range from zero to 22 percent and the framework allows residents to tap various reliefs, thereby lowering their effective payments.

4) You will enjoy high degree of personal safety and benefit from a strong legal system

Singapore has the most stable political environment in South-east Asia, offering entrepreneurs and investors a strong sense of security and comfort. The rich variety of dining and entertainment options, world-class education systems, and quality health-care providers in Asia provide an ideal location to raise a family. Moreover, in the event of cross-border disputes, businesses can rely on Singapore’s reputation as a world-class arbitration facility.

Additionally, in its Global Competitiveness Report 2015 – 2016, the World Economic Forum ranked Singapore as having the best IP protection in Asia. The same report recognises Singapore as a country with sound political infrastructure and policy-making procedures; leading to its ranking as the most transparent country in Asia that enjoys a stable business environment.

It is also the least corrupt country in the Asia region, where transparency is valued highly. This is according to the IMD World Competitiveness Report 2015.

5) You have access to a highly skilled local talent pool

Based on the Business Environment Risk Intelligence (BERI) Report 2014, Singapore enjoys the highest ranking for labour force in terms of workers’ productivity and general overall attitude. The workforce is highly motivated due to effective company policies, a generally conducive working environment and attractive living conditions in the country.

The availability of the most skilled labour pools in the region is also due to sound education policies, on-going training programmes, and attractive immigration policies.

To add on, in terms of employer-employee relations, Singapore enjoys better working conditions and higher rates of productivity due to more open communication channels and camaraderie between employee and employer. This is according to the Global Competitiveness Report 2015 – 2016.

Conclusion

In the above discussion, we have thrown some light on the quality of life, economics, trade, commerce, and investment scenarios in Singapore. In addition, the leisure and sporting scene is also thriving and growing here. The city is a big gastronomic draw, with a lively dining and entertainment scene that offers some of the best cuisine in Asia along with unique street food. Its warm weather also makes all-year-round water and outdoor sports possible. There are a wide variety of well-tended green spaces and exercise facilities such as the East Coast Park and Botanical Gardens.

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