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Why Entrepreneurs are choosing Singapore?

Singapore is strategically located along the corridors of east and west. It ranks high in terms of political and macroeconomic stability with top-notch infrastructure and very attractive tax system.


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Published by InCorp Global Pte Ltd
on 19 Apr 2018

Why Entrepreneurs are choosing Singapore?

On an average, more than 50,000 new businesses are formed in Singapore every year. This includes small sole proprietorships, small and medium sized private companies, subsidiaries of large local and foreign multinationals, and   start-ups. Even amidst the subdued global economic performance in the last decade, Singapore remained abuzz with new incorporations, mergers and acquisitions.  There are other cities in the region that are closely competing with Singapore and they are trying to close the gap in terms of competitive tax rates, incentive schemes, regulatory framework etc., yet Singapore’s position remains unconquerable. So why is Singapore the top choice among entrepreneurs?

Geographic Location

Singapore is strategically located along the corridors of east and west. It’s ideal location and role in the burgeoning Asian region makes it an ideal launch pad for companies pursuing the opportunities on both sides of the hemisphere. It has the best connectivity to the world’s fastest growing markets by both air and sea, not just for passengers but also for cargo. Singapore containers ports are one of the busiest in the world.

Stable Business Environment

Singapore ranks high in terms of political and macroeconomic stability. The parliamentary democracy and strong judicial system along with robust regulatory institutions to ensure corporate governance and a corruption-free bureaucracy, providing the much needed sense of stability to entrepreneurs and investors. The macroeconomic stability assured by the government’s monetary; trade and economic policies and measures and the sustained fiscal deficit generated by the government provide the businesses a predictable scenario to operate from.

Top-notch Infrastructure

Singapore boasts of top-notch infrastructure, besides the ports and transportation network, Singapore has ultra-high-speed broadband infrastructure connecting homes and offices. It has one of the highest mobile penetrations in the world and first among nations to deploy nationwide high-speed wireless network. Singapore’s bespoke e-Governance ensures seamless communication between government agencies that facilitates quick and efficient services including online registrations /termination of businesses, licenses and permits, documentation for international trade, work pass applications and immigration services.  

Competitive Tax System

Singapore’s tax system is very attractive to businesses. Singapore follows a territorial taxing policy with single-tier taxation. Tax is charged on only that portion of the profits earned or received in Singapore and dividends received by the shareholders are exempted from tax. The headline tax rate is 17% and the effective tax rate for chargeable profits of less than S$300,000 is only 8.5%.

Singapore’s personal income tax rate is very competitive. A progressive taxation policy is in place whereby the first S$20,000 chargeable income is exempted, with progressive rates for each slab and the rate is capped at 22% for income exceeding S$320,000.

More importantly there is no capital gains tax or inheritance tax, which is especially attractive to investors and trusts. Singapore’s has a Goods and Service Tax (GST) that is akin to Value Added Tax, charged at 7% on consumptions of all goods and services. The GST, a broad based consumption tax, is one of the lowest in the region.

Singapore has a wide network of Avoidance of Double Taxation Agreement (DTA) with more than 70 countries across the globe, thus mitigating the risks of tax disputes and eliminating double taxation of income. The DTAs also reduces or eliminates withholding tax rates, which are otherwise applicable. Singapore is an ideal jurisdiction for locating holding company operations.

You may try our tool to calculate your tax in Singapore

World Class City

Singapore’s urban planning is visionary and comprehensive to efficiently support the evolving needs of a city-state that has rapidly progressed from a fishing village to the most developed country in the region. The resource scarce nation is constantly reinventing in an environmentally sustainable manner to promote an idyllic environment to live, work and play. With ample green spaces, arts & entertainment hubs, sports venues, extensive shopping options, innumerable dining places the dynamic city-state has developed an enviable model which countries around the world try hard to emulate. The safe and secure low crime rate country stands out in the region and attracts foreign talents, investors and entrepreneurs alike.

Efficient Workforce

Singapore’s workforce is outstanding in terms of flexibility and efficiency. Singapore’s educational system and institutional framework is excellent in churning out talents that are relevant and adaptive to the dynamic business environment. The immigration policy of Singapore also favours meritorious foreign talent and international businesses are able to mobilize and deploy talent. Likewise, investors and entrepreneurs are able to relocate to Singapore in order to personally manage the growth of their business and investments. The largely English speaking population that is also multicultural facilitates the expansion of multinationals in the region by anchoring in Singapore. The government partners with industry players to groom the competency of local talent and promotes lifelong education and training through various schemes.

Financial Market Development

As an international financial centre, Singapore has a comprehensive network of international and regional banks offering trade finances and banking services. The insurance, asset and wealth management industry is also mature besides a well-regulated securities exchange where more than 40% of the companies listed are foreign. Singapore is the largest foreign exchange trading centre in the APAC region with daily volumes exceeding US$350 billion.  The venture capital market is also thriving in Singapore backed by government incentives and this has attracted international heavyweights such as Sequoia Capital and Softbank.

Business Sophistication and Innovation

Singapore’s enterprise ecosystem is well developed, with complementing industry clusters, enterprise technology, business networks and services. Large multi nationals collaborate with small local companies to generate competitive edge and create value through innovation. There is an overall shift towards productivity-based growth and innovation is identified as the key driver of productivity enhancement. Government schemes are in place to drive access to technology, capital and talent. Robust Intellectual Property Rights framework provides the much needed protection for innovation. Start-ups and innovation centres of multinationals are increasingly setting up in Singapore to capitalize on Singapore’s ecosystem that nurtures and protects innovation.

Accolades

  • BERI Report 2016 – No 1 Investment Destination in Asia
  • World Bank Doing Business Report 2015 – World’s Easiest Place to Do Business
  • Global Competitiveness Report 2016 World Economic Forum – Second Most Competitive City in the World
  • Global Innovation Index 2015 – Best Global Innovation in Asia pacific and the World
  • Global Competitiveness Report 2016 World Economic Forum – Asia’s Best IP Protection
  • IMD World Competitiveness Report 2015 – Sixth Least Corrupt Economy in the World
  • BERI Report 2014 – Best Score in the World for Labour Force Evaluation Measure

Pro-Business Incorporation Regulations

Singapore’s company regulations paves way for quick company incorporation, some key highlights are

  • A company can be wholly (100%) owned by a foreign individual or a foreign company.
  • Prior to registration the company name must be approved. The availability of the name and reservation of the same can be done online.
  • The incorporation process can be completed in one working day if all the documents are in order.
  • A company can be registered with a paid up capital of just S$1 only, the paid up capital can be subsequently increased post incorporation.
  • Foreigners seeking Entrepreneur Pass are required to have a minimum paid-up capital of S$50,000. Likewise, it is advisable for foreigners seeking Employment Pass to manage the affairs of the company they form to have a substantial paid capital – at least S$50,000.  
  • A company must appoint a locally resident individual as a company director. The sole shareholder can also act as company director. Foreigners, who are not locally resident, can apply for Employment Pass or may appoint a trustworthy local or opt for Nominee Local Director Service offered by Business Service Providers.
  • A physical address must be provided at the time of incorporation to meet the registered office address requirement. Alternatively, opting for Registered Address service offered by Business Service provider can also fulfil this requirement. Locals can use residential address for this purpose however prior approval from appropriate authority (HDB/URA) must be obtained.
  • A locally resident natural person must be appointed as Company Secretary. However sole-director cannot act as company secretary. The person thus appointed must be familiar with the companies Act and the obligations under the Act.

Last Modified Date: 19 Apr 2018



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