Why do foreigners choose to set up businesses in Singapore?
Once a mere fishing village, Singapore is now one of the busiest business hubs in the world with hustling financial activities centred around it. These astonishing results stem from how Singapore is strategically located, having competitive and strong labour, well-developed infrastructure and not to mention sound economic policies laid out by a stable and efficient government. Therefore, global businesses will find Singapore as an advantageous location to set up their headquarters here. If you are an investor or entrepreneur, you should consider registering a company in Singapore.
What’s more, strong trade and investment have made Singapore the most competitive country in Asia and one of the world’s easiest places to carry out business. As such, it makes perfect sense for major global banks, financial institutions, and multinational organizations to branch out in Singapore. Also, with the association “Lion City”, Singapore is backed with a strong currency which makes the place optimal to set up an overseas corporation. Here is a breakdown of why it is such a popular choice for businesses.
1. Globally ranked as the best place to start a business
Globally surveyed, Singapore has consistently topped the list as the ideal place for business. As compared to other business hubs, registering a company in Singapore simply requires a day to finish all the due processes once requirements and applications have been satisfied and duly submitted. Furthermore, you do not have to be Singaporean citizen to set up a business in Singapore, meaning foreigners are welcome to set up a company there. Application forms can also be submitted online, making the process swift and convenient.
2. A safe country, governed by strict laws
In terms of political stability, Singapore is one of the best-performing countries in Asia, and this lends a sense of security for investors, boosting their confidence if they decide to set up a business in Singapore. This is all due to a strong legal system with stringent anti-corruption laws. Not to mention, with such a low crime rate present in Singapore, if ever a border dispute takes place, businesses can rest assured with Singapore being recognized as a world-class arbitration facility.
3. Business-friendly Ecosystem
Singapore frequently appears on numerous international rankings, which include the likes of World Economic Forums, Global Competitiveness Report, and World Bank’s Doing Business Report, all of which represent Singapore’s strengths and infrastructure.
4. A strategic position with a strong network of trade agreements
Due to its strategic location, Singapore is situated in the centre of Southeast Asia, making the nearby emerging markets accessible. Not to mention, with a rich network of FTAs, Singapore has a friendly international bond with other countries in terms of industry and trade. These FTAs facilitates cross borders’ trading and business, hence making it affordable for firms in Singapore to expand its business internationally.
5. Substantial air connectivity
Singapore’s Changi Airport is the base of extensive air connectivity as it hosts more than 100 airlines, of which flies to over 400 cities worldwide. Statistics show that approximately 7200 flights land or take off from Changi in a week. The number of airport passengers also exceeds a mindblowing number of 62.2 million. As such, Singapore proves more than enough that it can facilitate trade successfully, through an efficient logistic infrastructure and supply chain system.
6. Offers in-depth Intellectual Property Protection
Singapore offers the best intellectual property (IP) protection as well as infrastructure and incentives as compared to the other countries in Asia.
7. Business hub with vibrant financial activities
Hustling with financial activities, Singapore boasts a large number of commercial banks, capital markets services license holders, and fund managers, making it a vibrant financial centre. Not only is it a business hub for weal management and Asia investments, but it also has the Singapore Exchange (SGX), which is one of the largest forex trading centres. Therefore, entrepreneurs have little to worry about if they need financial services to fund their business as there are both private and commercial banks offerings rates that go as low as 1% p.a.
8. Incentives loaded for a headquarter setup
The Economic Development Board has implemented incentives for the international headquarters (IHQ) and regional headquarters (RHQ). RHQ is entitled to a 15% concessionary tax rate, and IHQ allows for even more attractive tax rates that range from 0% to 10%.
9. Foreign income exemption
Another major benefit of setting up a business in Singapore is the foreign income exemption which allows businesses to send their foreign subsidiaries’ dividends directly to Singapore without being Singapore taxed.
10. Attractive tax system and rates (Personal and Corporate)
Singapore has a progressive personal tax system. Marginal rates vary within a range of 0 to 20 % and the structure enables residents to access multiple reliefs, which then helps to lower their effective payments. To add on, Singapore provides a scheme called the “Not Ordinarily Resident”, in short, the NOR scheme. This scheme grants a generous tax treatment lasting for five years for qualified working individuals based in Singapore. In a clearer definition, this group of individuals works for a Singapore registered company who earn minimally S$160,000 in a year and spend not less than 90 days per year outside Singapore for work-related reasons. As a result, IRAS will not implement a tax on the individual based on the income during the time spent outside the country for business.
At the same time, corporate tax is also attractively structured. Although there is a low marginal rate (17%), the effective tax rate is even lower. During the first three years of taxable income belonging to non-resident corporations, they are granted free of tax under a jurisdiction named “zero tax”. Additionally, an agreement called the “DTA”, which stands for Avoidance of Double Tax Agreements (DTAs) is also implemented by the government to ensure prosperity through financial success.
All in all, the above mentioned are the top 10 reasons convincing you why you should choose Singapore as a place to set a business in. Besides, with the fact that Singapore is a preferred choice by foreigners, it makes the outlook even clear. We hope that you are now more familiar with Singapore and are well convinced by our analysis. Finally, we wish you all the best with your future endeavours, good luck!
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