Singapore is a city-state on the Malay Peninsula’s southern tip and Asia’s second smallest country. The country underwent fast industrialization and maintained an extremely high development rate over the three decades between the 1960s and 1990s, earning it the title of one of Asia’s Four Little Dragons.
Singapore has positioned itself as a worldwide financial center. Many multinationals and international entrepreneurs want to start business in Singapore because of the country’s well-developed infrastructure, stable political climate, healthy economy, and talented workforce.
This essay analyzes the key reasons why international firms and entrepreneurs should select Singapore as their base of operations.
#1 Excellent connection and a strategic position
Singapore’s central location in Southeast Asia allows it to reach a population of over three billion people in just a few hours of flying time. Singapore Changi Airport serves more than 100 airlines operating to 380 destinations in more than 100 countries and territories across the world as a regional transportation hub. More than 65.6 million people are expected to transit through the airport in 2019. Many major logistic companies, such as UPS and FedEx, have their headquarters here. Skytrax has rated Singapore Changi Airport the World’s Best Airport for the eighth year in a row in 2020.
Singapore is recognized as a top International Maritime Centre since it is a worldwide hub port and one of the world’s busiest ports. Singapore’s port is linked to 600 ports in over 120 countries via 200 shipping lines, processing almost 15% of the world’s total container transshipment flow.
Singapore has an internet penetration rate of 82 percent in terms of communications connection. The country scored fourth in the Global Connectivity Index 2019 because of its outstanding digital infrastructure and early adoption of corporate cloud services.
#2 The ease with which one may do business
Singapore’s regulatory structure is one of the most efficient and devoid of bureaucracy in the world. According to The Heritage Foundation’s Index of Economic Freedom, Singapore has surpassed Hong Kong as the world’s freest economy in 2020. According to the World Economic Forum’s Global Competitiveness Report 2019, Singapore is the world’s most competitive economy.
To start business in Singapore has regularly been recognized as the easiest country to start and manage a business during the last decade. Singapore is rated second among 190 economies in terms of ease of doing business in the World Bank’s Doing Business Report 2020.
In contrast to many other emerging nations in the area, the prerequisites to start business in Singapore are extremely simple. To set up company in Singapore takes around 2 to 3 days because of its simple set-up procedures. The Singapore government also provides an internet platform (BizFile) via which anybody may immediately set up company in Singapore.
#3 Asia’s most important financial center
Singapore is not just the region’s major financial hub, but also one of the world’s largest financial centers. The foreign reserve of the country is rated tenth in the world. Singapore is the world’s fifth-ranked financial hub in terms of competitiveness, according to the Global Financial Centres Index (GFCI) issued in March 2020.
Over 100 commercial banks, 29 merchant banks, and 40 foreign bank representative offices are located in the nation. Financial, foreign currency, bonds, stocks, derivatives, asset management, and insurance are among the services and products offered by its robust and healthy banking industry.
Singapore is well-known for being a center of innovation. It creates an atmosphere that encourages companies and financial institutions to use innovative technologies such as cryptocurrency and blockchain. The GFCI classified the country as one of the top ten FinTech-friendly countries in the world.
With approximately 640 mainboard listings and 215 catalyst listings, the Singapore Market (SGX) is the largest stock exchange in Southeast Asia. With an average trading volume of S$870 billion, it is also the world’s third-largest currency center. SGX is known as the largest international REIT platform in the area, as well as the largest listing venue for foreign bonds.
#4 Affordable taxation
Singapore has a well-structured tax system that is one of the most straightforward in the world. Individuals and businesses in Singapore are solely taxed on income earned within the nation. The government operates a territory-based taxation system with no tax on income earned outside.
Furthermore, the Singapore government has signed Double Taxation Agreements with over 80 countries, ensuring that no Singapore tax resident firm is required to pay twice for the same taxable revenue in two separate jurisdictions.
Capital gains are not taxed in Singapore, and dividends paid to shareholders are likewise tax-free. On the company’s chargeable income, the corporation tax rate is set at a fixed rate of 17%. The tax cut is given when you set up company in Singapore for the first time, with an effective tax rate of 6.22 percent for the first S$200,000 in income for the first three years following formation.
In 1994, the Singapore government implemented the Goods and Services Tax (GST). This is still one of the lowest in the world at 7%.
Singapore has a two-tiered personal income tax system, with rates starting at 0% and rising to 22 percent for income above S$320,000. Non-residents, on the other hand, are subject to a flat tax rate of 22%.
#5 Trade agreements that include a wide range of topics
In 1993, Singapore signed the first Free Trade Agreement (FTA) within the ASEAN Free Trade Area. The intention is to liberalize trade among ASEAN countries by eliminating tariffs and non-tariff obstacles. The scope of FTAs has grown to cover additional areas of interest like e-commerce, intellectual property rights, competition, and more. The country’s FTA network now includes 14 bilateral agreements and 11 regional agreements.
#6 A welcoming business climate for new businesses
Singapore is known as a startup hotspot in the area. The Singapore government has established several initiatives and programs to build a dynamic startup ecosystem. This is for both local and foreign entrepreneurs, in addition to providing grants, loans, and tax advantages to companies.
In 2017, the Singapore government launched Startup SG, a major program. It serves as a one-stop shop for businesses seeking loans, grants, capital, and competence development. Startup Singapore is built on seven pillars:
- First-time entrepreneurs with unique company ideas can apply for mentorship and a S$30,000 starting capital award through Startup SG Founder.
- SG Tech is a startup that invests in the commercialization of proprietary technologies at an early stage.
- Startup SG Accelerator supports incubators and accelerators in key growth industries with finance and non-financial assistance.
- The goal of Startup SG Equity is to encourage additional investments in Singapore-based. Usually deep-tech businesses by partnering with a third-party investor.
- Startup SG Loans are government-backed loans that help startups accelerate their growth.
- Startup SG Talent has a number of programs to assist startups in attracting talent. This includes EntrePass, T-Up, Global Ready Talent Program, and Tech@SG Program.
- The Startup SG Infrastructure offers the venues that entrepreneurs require to develop, explore, and thrive.
Start your own business today
WLP Group provides the most popular services for you to start business in Singapore. Contact us as soon as possible for you to set up company in Singapore.
