Singapore is one of the best places in the world to set up a company. It has a very business-friendly environment with a government that is extremely accommodating to local and foreign-owned companies. In fact, Singapore with a land area of about 728.6 square meters is home to more than 37,000 international companies and 7,000 multinational corporations. This begs the question. Why is Singapore such a popular place to do business?
Here are some of the factors:
- The political stability in Singapore
Singapore has a very stable political environment with a transparent legal system. The People’s Action Party (PAP) has been the government even before Singapore attained independence. While opposition parties have been making inroads and winning more seats in the Singapore parliament, the PAP is not expected to lose the majority it needs to form the government in the foreseeable future. This stable political environment has led to the government being able to formulate policies that will last beyond the current term of government. This current government is well known for its commitment to maintaining law and order. This provides a very secure environment for businesses to operate. The government is also very pro-business. Companies looking to set up their offices or headquarters in Singapore are able to plan for the long term as it is unlikely that there will be an abrupt u-turn of the current policies as the government is unlikely to change.
- Business-friendly regulations
The Singapore government has put in place a wide range of business-friendly policies and regulations. While the flat corporate tax rate is 17%, there are a wide array of tax incentives, especially for new start-ups, that can lower the effective tax rate to low single digits. A Singapore company can be wholly foreign-owned. With valid work passes it can be fully foreign-managed as well. There is very minimal bureaucratic red tape and there is a very strong emphasis on protecting intellectual property. Singapore consistently ranks very highly on various indexes that measure the ease of doing business. The Singapore government is also very big on dishing out business grants to help businesses grow and thrive. This is especially prevalent in the adoption of technology.
- A highly favourable tax system
Corporate taxes are in some cases, lower than personal income taxes. There are corporate structures where if certain requirements are met, are effectively tax-free (variable capital companies). New, smaller companies are taxed at a very low and attractive rate. Personal income taxes are still one of the lowest in the world. Additionally, there are no capital gains and dividend taxes. This low tax regime makes Singapore a very appealing destination for investors and entrepreneurs.
- Intellectual property protection
Singapore has very strict intellectual property laws with very strong penalties as a deterrent for those who do not respect such laws. This provides a very high level of protection for patents, trademarks and copyrights. This is crucial for businesses that rely on intellectual property assets. They can operate safely in Singapore’s environment knowing that their intellectual assets will be respected and protected.
- English is the main mode of communication
English is the primary language of communication and is taught as a first language in all of Singapore’s schools. Singapore’s laws are in English. All documents and communications are also in English. This breaks down all communication barriers with the rest of the world as English is perhaps the most widely used language in the world. Despite Singapore having many races and cultures, the main language of communication between the various races is English. This is also one of the reasons why there is little friction between the various races in Singapore.
- Strategic location
Singapore is strategically located in Southeast Asia. Historically it used to be a port for the British en route to China and India and it remains as a midpoint for many connecting flights. This is one of the main reasons why its main airport, Changi International Airport, is one of the busiest in the world. Singapore is often used as a gateway to the Asia-Pacific region and provides very easy access to a vast consumer market.
- World-class infrastructure
Singapore boasts a very modern and efficient infrastructure. Its ports, airports, rail network, telecommunications and transportation network are very extensive and are usually one of the best in the world. The extensiveness of its rail network makes it possible to get around the island with great ease. This is also a very attractive point for foreigners who want to not only want to work but to live in Singapore. It is very easy to live in any part of the island and make your way to the Central Business District of Singapore.
- A highly skilled workforce
Singapore workers are very highly educated and skilled. Singapore’s education system is one of the best in the world with its students consistently coming up tops in international examinations. The excellent education system is also one huge draw for foreigners with families with school-going children. Due to the high emphasis the Singapore government places on education and training, businesses operating in Singapore will have access to this highly skilled workforce. In fact, the Singapore government places a lot of emphasis on reskilling. It gives out very generous grants and incentives to individuals looking to reeducate and reskill themselves. This is also one of the reasons why even older workers in Singapore are very productive in this highly digitalized economy.
- Strong financial sector
Singapore has a very robust financial services industry, including banking, insurance and asset management. This makes it extremely easy for businesses to access capital, manage finances, and conduct international transactions.
- A very high quality of life
Singapore is one of the best places to live. Singapore was recently named as the 6th Blue Zone in the world. What this means is that Singapore is regarded as one of the cities with the highest life expectancy in the world. Singapore has one of the best healthcare systems in the world. It is now also home to many international entertainment events. It hosts major concerts and sporting events like the Formula 1 race. While Singapore is very serious when it comes to business, it is also a very fun place to live.
If you are looking to set up a business, i.e., set up a company in Singapore, you will need a registered filing agent like Raffles Corporate Services Pte Ltd.
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