Singapore is one of the most attractive marketplaces in the world for investors and business owners wishing to expand their brand globally.
The city-state offers a regulatory climate that is conducive to business, a local workforce that is highly skilled, and the enforcement of intellectual property rights. Singapore’s GDP growth has been among the highest in the world, averaging 7.7 percent, thanks to these and many other factors.
Singapore has earned a reputation as one of the “Four Little Dragons of Asia” due to its strong economy, appealing tax structure, and simplicity of incorporation and operation:
The numerous advantages Singapore provides to both new and established enterprises are described in this guide. Here are some benefits of forming a business in Singapore.
1. Strategic location
Singapore is tucked away in the center of South-East Asia, adjacent to rising markets like Indonesia as well as economic titans like China and Japan.
The Changi International Airport, located in Changi, the capital of the city-state, connects to more than 330 destinations worldwide and services more than 80 international airlines. Travelers may quickly and conveniently access the majority of Asia-Pacific countries in a matter of hours. The airline industry serves about 20 million passengers annually.
In addition to having a significant number of domestic flights, Changi International Airport is home to many of the top logistics companies in the world, including FedEx and UPS. It’s also important to note that Singapore was ranked as Asia’s top location for logistics performance in the World Bank’s Logistics Performance Index, which is a global assessment of express carriers and international freight forwarders.
Additionally, Singapore’s maritime infrastructure has more than 200 shipping lines that connect to 600 ports in 123 different countries. The Port of Singapore, one of the biggest container ports in the world, sees 1.15 billion gross tonnes, or 20% of global transshipment trade, travel through its docks annually.
2. Established infrastructure
Anyone who has been to Singapore can attest to the infrastructure’s astounding quality. This applies to all of its public parks, commercial structures, internet infrastructure, airport, highway systems, and airport.
Additionally, Singapore has seen notable improvements in its business agility and technical infrastructure. In addition, it has steadily improved in terms of financial accessibility and support for regulatory frameworks that foster technology advancement as a regional digital hub.
Singapore is Asia’s top destination for infrastructure, according to data from Mercer Human Resources’ 2012 Quality of Living Survey. Singapore is ranked as the second-most digitally competitive economy in the world according to the IMD: World Digital Competitiveness Ranking 2019.
Since most of Singapore’s infrastructure was built over the past ten years, it has a contemporary design that can accommodate the expanding needs of enterprises. It offers cutting-edge port infrastructure, the second busiest port in the world, and first-rate aviation connection to international locations, particularly the developing Asia-Pacific markets.
3. Robust economy
Trade, industry, and finance all contribute to Singapore’s well-established free-market economy. Singapore’s city-state has a very low unemployment rate and low inflation since services make up about 80% of its GDP.
Singapore is regarded as having one of the most stable economies in the world, despite having a limited domestic market. Singapore has a high government revenue, no foreign debt, and an ongoing positive surplus mainly due to exports of the manufacturing of machinery and electronics as well as financial services.
Singapore now boasts the most open economy in the world, according to the World Economic Forum. With exports of over S$500 billion annually, Singapore’s trade to GDP ratio is among the highest in the world. The country’s gross national savings are close to 50% of its GDP. Singapore has developed into a hub for innovation, entrepreneurship, and wealth management as a result of these reasons.
4. Favorable tax system
The highest corporate tax rate on taxable revenue in Singapore is 17 percent, making it one of the countries with the most competitive tax systems worldwide. Singapore also has one of the lowest rates of value-added tax in the entire globe.
Capital gains are exempt from taxation, and income derived locally is subject to income tax. These firms’ foreign subsidies’ income is tax-free as well, which draws many organizations looking to establish holding corporations.
All Singapore resident corporations are qualified for partial tax exemption under the tier-based tax system for personal and company taxes. On taxable income up to S$300,000 per year, this amounts to an average tax rate of 8.5 percent.
In addition, Singapore has a vast network of investment protection agreements with the majority of nations in the world as well as Avoidance of Double Taxation Agreements (DTAs) with 62 other nations. DTAs guarantee that double taxation won’t be applied to commercial transactions between Singapore and a treaty country.
5. Support for startups
For both domestic and foreign entrepreneurs, the Singaporean government offers a wide range of grants, funding, and subsidies. These encompass programs like Startup SG Tech, the Enterprise Development Grant, and EDB Singapore’s Innovation, R&D, and Capability Development — which aid in reducing labor costs and expanding the reach of commercial operations.
The Global Trader Programme (GTP), International Headquarters Programme (IHP), and Regional Headquarters Programme (RHP) are just a few of the business development-promoting initiatives that Singapore has put in place.
Singapore’s corporate infrastructure is cutting edge and startup-friendly, and there is a burgeoning culture of entrepreneurship there. Additionally, the nation ranks second in Asia for startup investments, and its internationally renowned tech scene rivals Silicon Valley in terms of startup talent.
6. Easy to conduct business
Singapore is renowned as a triple-A rated economy and a reliable site for global expansion, consistently ranking first in the World Bank’s Ease of Doing Business Report. International trade, investor protection, issuance of building licenses, and insolvency resolution are four areas where this is particularly clear.
With 128 commercial banks, 31 merchant banks, and more than 600 capital market service license holders nationwide, investors and business owners can easily access capital.
Equal chances are provided to both domestic and foreign businesses, and clear economic and regulatory policies are supported by a pro-business administration.
Due to its low regulatory burden, openness to foreign capital and technology, encouragement of free-market competition, and investment-friendly policies, Singapore has experienced steady prosperity. These elements not only contribute to Singapore’s status as a global commercial hub but also to its vibrant modern and multicultural society.
7. Fast & simple incorporation
In Singapore, one of the marketplaces with the least amount of red tape, a company can be established with just one shareholder, one director, one local company secretary, a local address, and $1 in share capital.
Singapore’s Accounting and Corporate Regulatory Authority, which is fully automated, typically takes less than three days to incorporate a business (subject to compliance approval) (ACRA).
Choosing a business entity, establishing a company (which involves a Company Constitution and signed Consent to Act as Director and Consent to Act as Company Secretary), and creating a bank account are the three procedures necessary to incorporate a new business in Singapore.
Although there are several possibilities, due to its marketability, “private limited companies” are the most common type of new business that registers with ACRA. Shareholders are then not responsible for losses or debts above their share capital and the corporation is recognized as a taxable entity.
ACRA offers business profiles to newly incorporated Singaporean enterprises. This computerized report, which is necessary to create a corporate bank account and apply for permits and licenses, includes information including a business’ registration number and registration date.
Summary
Singapore draws thousands of investors and businesspeople to its shores every year as a center for financial and technology innovation worldwide.
It makes sense that many are opting to incorporate their businesses in Singapore given its advantageous geographic position, robust economy, and extensive assistance for startups, including generous tax advantages.
For companies of all sizes and in all industry sectors, we offer international financial services. This covers business accounts with non-banks, accounts in the currency of the country in question, and forex services, including spot and forward contracts.